NIGERIAN BANKING LAW REPORTS · 2. hon. justice isa ayo salami, (ofr) 3. hon. justice james ogenyi...

NIGERIAN BANKING

LAW REPORTS [1999]

VOLUME 9

To be cited as: [1999] 9 N.B.L.R.

Nigeria Deposit Insurance Corporation

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EDITORIAL BOARD

1. Professor J.O. Anifalaje Chairman Faculty of Law, University of Ibadan

2. Alheri Bulus Nyako Editor-in-Chief Board Secretary/Director,

Legal Department

NDIC

3. Michael Olufemi Olaitan Member Legal Practitioner

4. Ahmed Almustapha Member Registrar-General Corporate Affairs Commission

5. Gabriel Olukayode Kembi Member Legal Practitioner

6. Adekunle Oladapo Omowole Member Legal Practitioner Corporate Affairs Commission

7. Nasiru Tijani Member Legal Practitioner Senior Lecturer, Nigerian Law

School

8. Belema A. Taribo Member Legal Practitioner NDIC

9. Moses Ter-llumun Adaguusu Member Legal Practitioner Corporate Affairs Commission

10. Dan Ike Agwu Secretary Legal Practitioner NDIC

iv

LIST OF JUSTICES OF THE SUPREME COURT OF NIGERIA AS AT NOVEMBER 30TH, 2007

1. HON. JUSTICE IDRIS LEGBO KUTIGI, CON (Chief Justice of Nigeria)

2. HON. JUSTICE SYLVESTER UMARU ONU 3. HON. JUSTICE ALOYSIUS IYORGYER

KATSINA ALU 4. HON. JUSTICE NIKI TOBI 5. HON. JUSTICE DAHIRU MUSDAPHER 6. HON. JUSTICE GEORGE ADESOLA

OGUNTADE 7. HON. JUSTICE SUNDAY AKINOLA

AKINTAN 8. HON. JUSTICE ALOMA MARIAM MUKHTAR 9. HON. JUSTICE MAHMUD MOHAMMED 10. HON. JUSTICE WALTER SAMUEL NKANU

ONNOGHEN 11. HON. JUSTICE IKECHI FRANCIS OGBUAGU 12. HON. JUSTICE FRANCIS FEDODE TABAI 13. HON. JUSTICE IBRAHIM TANKO

MUHAMMAD 14. HON. JUSTICE PIUS OLAYIWOLA ADEREMI 15. HON. JUSTICE CHRISTOPHER MITCHELL

CHUKWUMA-ENEH

v

SENIORITY LIST OF JUSTICES OF THE COURT OF APPEAL AS AT NOVEMBER 30TH, 2007

1. HON. JUSTICE UMARU ABDULLAHI, CON (President)

2. HON. JUSTICE ISA AYO SALAMI, (OFR) 3. HON. JUSTICE JAMES OGENYI OGEBE, (OFR) 4. HON. JUSTICE RABIU DANLAMI MUHAMMAD,

(OFR) 5. HON. JUSTICE RAPHAEL OLUFEMI ROWLAND,

(OFR) 6. HON. JUSTICE MUHAMMAD S. MUNTAKA

COOMASSIE 7. HON. JUSTICE DALHATU ADAMU, (OFR) 8. HON. JUSTICE BABA ALKALI BA’ABA 9. HON. JUSTICE SAKA ADEYEMI IBIYEYE 10. HON. JUSTICE ZAINAB ADAMU

BULKACHUWA 11. HON. JUSTICE SULEIMAN GALADIMA 12. HON. JUSTICE VICTOR AIMEPOMO O. OMAGE 13. HON. JUSTICE JOHN AFOLABI FABIYI 14. HON. JUSTICE KUMAI BAYANG AKAAHS 15. HON. JUSTICE OLUFUNLOLA OYEOLA

ADEKEYE 16. HON. JUSTICE M. DATTIJO MUHAMMAD 17. HON. JUSTICE AMIRU SANUSI 18. HON. JUSTICE CLARA BATA OGUNBIYI 19. HON. JUSTICE ISTIFANUS THOMAS 20. HON. JUSTICE JAFARU MIKA’ILU 21. HON. JUSTICE AMINAT ADAMU AUGIE 22. HON. JUSTICE ABUBAKAR ABDULKADIR JEGA 23. HON. JUSTICE STANLEY SHENKO ALAGOA 24. HON. JUSTICE MONICA DONGBAN-MENSEM 25. HON. JUSTICE NWALE SYLVESTER NGWUTA

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Nigerian Banking Law Reports

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26. HON. JUSTICE MOHAMMED LAWAL GARBA

27. HON. JUSTICE JEAN OMOKRI 28. HON. JUSTICE TIJANI ABDULLAHI 29. HON. JUSTICE UWANI M. ABBA AJI 30. HON. JUSTICE MARY PETER ODILI 31. HON. JUSTICE KUDIRAT M.O. KEKERE-

EKUN 32. HON. JUSTICE MOHAMMED LADAN

TSAMIYA 33. HON. JUSTICE RAPHAEL CHIKWE AGBO 34. HON. JUSTICE BODE RHODES VIVOUR 35. HON. JUSTICE SOTONYE DENTON-WEST 36. HON. JUSTICE PAUL A. GALINJE 37. HON. JUSTICE JIMI OLUKAYODE BADA 38. HON. JUSTICE OLUKAYODE ARIWOOLA 39. HON. JUSTICE O. GEORGE SHOREMI 40. HON. JUSTICE HELEN M. OGUNWUMIJU 41. HON. JUSTICE OYEBISI FOLAYEMI

OMOLEYE 42. HON. JUSTICE ADZIRA GANA MSHELIA 43. HON. JUSTICE ABDU ABOKI 44. HON. JUSTICE AHMAD O. BELGORE 45. HON. JUSTICE ALFRED P.E. AWALA 46. HON. JUSTICE JUMMAI HANATU SANKEY 47. HON. JUSTICE IBRAHIM MOH’D M.

SAULAWA 48. HON. JUSTICE ALI A.B. GUMEL 49. HON. JUSTICE HUSSEIN MUKHTAR 50. HON. JUSTICE MOJEED A. OWOADE 51. HON. JUSTICE UZO I. NDUKWE-ANYANWU 52. HON. JUSTICE JOHN I. OKORO 53. HON. JUSTICE CHIDI NWAOMA UWA 54. HON. JUSTICE IGNATIUS IGWE AGUBE

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SENIORITY LIST OF JUSTICES OF THE FEDERAL HIGH COURT OF NIGERIA AS AT

NOVEMBER 30TH, 2007 1. HON. JUSTICE R.N. UKEJE (Chief Judge) 2. HON. JUSTICE A. MUSTAPHA 3. HON. JUSTICE D.D. ABUTU 4. HON. JUSTICE I.N. AUTA 5. HON. JUSTICE M.A. EDET 6. HON. JUSTICE A.A. ABDU-KAFARATI 7. HON. JUSTICE SOBA 8. HON. JUSTICE O.J. OKEKE 9. HON. JUSTICE S. YAHAYA 10. HON. JUSTICE A. BELLO 11. HON. JUSTICE A.O. AJAKAIYE 12. HON. JUSTICE F.F. OLAYIWOLA 13. HON. JUSTICE ADAMU HOBON 14. HON. JUSTICE J.T. TSOHO 15. HON. JUSTICE S.J. ADAH 16. HON. JUSTICE CHUKWURA NNAMANI 17. HON. JUSTICE R.O. NWODO 18. HON. JUSTICE G.C. OKEKE 19. HON. JUSTICE G.K. OLOTU 20. HON. JUSTICE J.E. SHAKARHO 21. HON. JUSTICE L. AKANBI 22. HON. JUSTICE C.M. OLATOREGUN 23. HON. JUSTICE BINTA F.M. NYAKO 24. HON. JUSTICE A. LIMAN 25. HON. JUSTICE S. YAHUZA 26. HON. JUSTICE C. ARCHIBONG 27. HON. JUSTICE I. EJIOFOR 28. HON. JUSTICE A.I. CHIKERE 29. HON. JUSTICE M.L. SHUAIBU 30. HON. JUSTICE SALIU SAIDU

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31. HON. JUSTICE G.O. KOLAWOLE 32. HON. JUSTICE A.O. FAJI 33. HON. JUSTICE B. BELLO ALIYU 34. HON. JUSTICE B.I. MOLOKWU 35. HON. JUSTICE A.F. ADETOKUNBO-

ADEMOLA 36. HON. JUSTICE CHUDI NWOKORIE 37. HON. JUSTICE M.I. AWOKULEHIN 38. HON. JUSTICE R.N. OFILI-AJUMOGOBIA 39. HON. JUSTICE L. ALLAGOA 40. HON. JUSTICE A.O. OGIE 41. HON. JUSTICE BABS KUEWUMI 42. HON. JUSTICE UMAR M. GARBA 43. HON. JUSTICE NYAURE BABA 44. HON. JUSTICE A.R. MOHAMMED 45. HON. JUSTICE T. ABUBAKAR

ix

THE NIGERIAN BANKING SYSTEM

1. The Development of Banking in Nigeria The historical development of the financial system in Nige-ria dates back to 1892 when modern banking business com-menced and a formal and institutional channel of saving mobilization was introduced into the economy with the es-tablishment of the African Banking Corporation (ABC). The operation of ABC was later taken over in 1894 by the British Bank of West Africa (which later became Standard Bank) and subsequently, First Bank of Nigeria. Owing to the colo-nial heritage, the pioneer commercial banks in Nigeria were of foreign origin and their operations favoured finance of foreign trade and commerce.

Thereafter, several other foreign and a host of indigenous banks were established. The establishment of indigenous banks was initially propelled largely by nationalistic con-sciousness rather than the existence of relevant resources, including basic skilled manpower, for running such institu-tions. Consequently most of the early indigenous banks col-lapsed in rapid succession. Banks that failed during the early stage of the evolution of the Nigerian financial system were largely those with problems of inadequate capital, poor management, and fraudulent practices, among other factors.

An important feature of the Nigerian financial system, es-pecially before the establishment of the Central Bank of Ni-geria (CBN), was small scope of operations of participating foreign institutions and the complete absence of any form of institutional regulatory framework which would provide the necessary guide for both the operations and orderly devel-opment of the system. These were some of the reasons be-hind the slow development of the financial system during the pre-CBN era.

The situation however changed from 1958 when the CBN was established. Since then, series of efforts have been made by the CBN and other relevant authorities to promote the growth and development of the Nigerian financial system.

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For example, the need to develop the system and create an avenue for investment of short term funds informed the issue by the CBN in 1960 of Treasury Bills as a supplement to Commercial Papers that were already in the market. Other money market instruments after the establishment of the CBN but prior to the introduction of the Structural Adjust-ment Programme (SAP) in 1986 included Treasury Certifi-cates in 1968, Certificates of Deposit in 1975 and the Bank-ers’ Unit Fund as well as Stabilization Securities in 1976. The establishment of the CBN also aided the development of the capital market. This was achieved by ensuring the emer-gence of the securities markets and instruments (primary and secondary) and by promoting the establishment of develop-ment banks.

Following the adoption of the SAP in 1986, and the subse-quent deregulation of the financial system, the banking sys-tem witnessed radical changes. Apart from the introduction of measures and instruments to deregulate the financial ser-vices industry, the techniques and the range of products of-fered by the industry changed significantly. The major ob-jective of the deregulation was to enhance economic effi-ciency and effective resource allocation through service-driven competition and improvement in quality and spread of financial services delivery.

On July 6th, 2004 the Governor of CBN announced a banking reform programme aimed at strengthening and con-solidating the banking system. The reform is expected to ad-dress the safety of depositor’s funds, enable the banking sec-tor to play an active developmental role in the economy and transform Nigerian banks into competitive players in the Af-rican and Global financial system.

2. The Nigeria Deposit Insurance Corporation One of the key measures introduced during the era of de-regulation of the banking sector was the establishment of the Nigeria Deposit Insurance Corporation (NDIC), with the promulgation of Decree No. 22 of 1988 now Cap 301 Laws of the Federation 1990, (as amended). The NDIC was

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The Nigerian Banking System

xi

established to insure all the deposit liabilities of licenced banks, promote banking stability and a sound financial sys-tem. Although the NDIC enabling Act was promulgated in 1988, the Corporation only commenced operations in March, 1989. The Nigeria Deposit Insurance Corporation scheme was introduced to provide a further layer of protec-tion to depositors and complement the role of prudent bank management as well as the Central Bank of Nigeria’s (CBN) supervisory activities in ensuring a safe and sound banking system. It was also considered as an additional framework to serve as a vehicle for addressing some of the challenges that followed the deregulation of the financial system under the SAP. Prior to the establishment of the NDIC, the Govern-ment had played the role of what in industry parlance is re-ferred to as an implicit insurer, by bailing out troubled banks in its bid to protect depositors. With deregulation, an explicit Deposit Insurance Scheme (DIS) became imperative. The establishment of NDIC was also informed by the change in government bank-support policy, the bitter experiences of prior bank failures in Nigeria and the lessons of other coun-tries with bank deposit insurance schemes. The scheme aims at increasing the competitive efficiency of the banking sys-tem as well as reducing the system’s vulnerability to de-structive runs, panic-induced shocks by reinforcing deposi-tors’ confidence in the nation’s financial system.

The mission of the Corporation is to protect depositors through effective supervision of insured institutions, provi-sion of financial and technical assistance to eligible insured institutions, prompt payment of guaranteed sums and the or-derly resolution of failed financial institutions.

The Corporation currently acts as the Liquidator of thirty four (34) banks out of a total of thirty six (36) banks whose operating licenses were revoked by the Governor of the CBN. All depositors of the banks in liquidation who have come forward to file their claims have been paid their in-sured deposits while liquidation dividends making up 100% of total uninsured deposits have been declared and paid to depositors of ten (10) banks in Liquidation.

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In September 1997, the Corporation commenced publica-tion of the Failed Banks Tribunals Law Reports (FBTLR) which contained only reported decisions of the Tribunal es-tablished under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 1994 and decisions of the Special Appeal Tribunal established under the Recovery of Public Property (Special Military Tribunal) Decree, 1984. In 1999, with the return to civil rule, the Corporation re-structured the publication into a compendium of decisions of all banking matters given by our superior courts of record from 1933 to date. This gave rise to the birth of the Nigerian Banking Law Reports (N.B.L.R.).

Nigeria Deposit Insurance Corporation November, 2005

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FOREWORD

Banking is the most important sub-sector of the economy of any nation. Banks facilitate economic transactions between various national and international economic units and by so doing encourage trade, commerce and industry. It is widely acknowledged that a sound and efficient finance industry, of which banks constitute the major segment, would promote growth of the real sector while the opposite is the case if the financial sector is repressed and inefficient. Therefore the Law of Banking assumes a position of pre-eminence in eco-nomic development and this underscores the importance of a Law Report on the subject.

The efforts of the Nigeria Deposit Insurance Corporation in the development of the Law of Banking through the pub-lication of a banking law report started over 8 years ago. It would be recalled that in September, 1997, the Corporation launched the Failed Banks Tribunal Law Reports (FBTLR) at the International Conference Centre, Abuja. Although the Failed Banks Law Reports were short-lived following the advent of civil rule in 1999, they nonetheless served as a veritable reference material for judges, legal practitioners, jurists, bankers, students and the general public.

It is for the foregoing reason that when the Corporation de-cided to expand the scope of the publication by including the decisions of the Supreme Court and the Court of Appeal on banking matters and re-named it the Nigerian Banking Law Reports (N.B.L.R.), I did not hesitate in giving my consent.

The N.B.L.R. is a compendium of case law on Nigerian banking from 1933 to date. The first batch of the compen-dium contains cases decided between 1933–2002 which I understand would continue to 2004. Thereafter, the reports would be published regularly. This initiative will prove in-valuable to users who would not have to wade through dif-ferent law reports when conducting research on Nigerian banking case law.

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The publication of the N.B.L.R. is one reliable means of disseminating information and knowledge of banking law and practices to depositors and other members of the public as part of the Corporation’s contribution to safe and sound banking practices. Hence, it is well known that the Corpora-tion did not embark upon publication of the N.B.L.R. in or-der to make profit.

Specialized law reports are very rare mainly because of the tedium, great expenses, time and labour required to produce them. However, when available, such reports generate con-siderable public interest. I am therefore pleased that the presentation of the Nigerian Banking Law Reports has be-come a reality. The laudable decision of the Management of the NDIC to shoulder this onerous burden for the Nigerian Banking industry is a practical example of the social as well as corporate responsibilities expected of modern Corpora-tions.

I have no doubt in my mind that the publication will en-dure and I am therefore pleased to recommend the Nigerian Banking Law Reports, which is a worthy and befitting leg-acy for posterity, especially the world of learning, to all and sundry.

Hon. Justice Mohammed Lawal Uwais, GCON Chief Justice of Nigeria November, 2005

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PREFACE TO THE NIGERIAN BANKING LAW REPORTS

The decision of the Nigeria Deposit Insurance Corporation to publish the Nigerian Banking Law Reports has its origin from its involvement in the implementation of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 1994. The Law was promulgated by the then Military Government with the combined objectives of re-covering the debts owed to failed banks and prosecuting di-rectors, officers and customers of banks who were suspected to have committed banking malpractices, which led to the collapse of most of the failed banks.

Furthermore, in 1994, when the Corporation was appointed as the Liquidator to carry out the liquidation of some failed banks, it was observed that there were hardly any records relating to the winding up of banks that had failed in the past. There was also no sufficient data on the causes of the past bank failures. The Corporation therefore took the initia-tive, in September, 1997 to report and publish decisions of the Failed Banks Tribunal established under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 1994. This effort culminated into the publication of the Failed Banks Tribunal Law Reports (FBTLR). Thus, the Corporation was motivated by the need to place on per-manent record the lessons from the new wave of bank fail-ures/distress, particularly with regard to the causes of such failures/distress and efforts made to resolve such failures.

Hitherto, the absence of proper documentation relating to the bank failures experiences in the early fifties had made it exceedingly difficult for practitioners and researchers to make references to such failures. The decision to publish the FBTLR was to ensure that the mistakes of the past were not repeated, through elaborate documentation of the recent failures, the essence of which were captured in the decisions of the Failed Banks Tribunal.

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However, with the return to democratic rule in May, 1999, the Failed Banks Act was amended by the Tribunals (Certain Consequential Amendment, etc) No. 62 of 1999, which ab-rogated the Tribunal. The civil and criminal jurisdictions of the Tribunal were accordingly transferred to the Federal High Court. Consequently, the title of the Publication was changed to Nigerian Banking Law Reports.

Furthermore, in response to the new democratic dispensa-tion, the Corporation decided to expand the scope of the publication into a compendium containing decisions of the Supreme Court, Court of Appeal as well as Federal and State High Courts on banking matters from 1933 to date in order to provide a comprehensive database for all banking related cases decided by the superior courts of record. Also in order not to miss the tremendous achievements recorded by the Failed Banks Tribunal during their relatively short tenure, their decisions have been included in the compendium thereby making the N.B.L.R. very comprehensive. In addi-tion, there is an index for the compendium up to 2002, which would soon be updated to 2004, and thereafter it would be published on a regular basis.

It is therefore my hope that legal practitioners, my Lords the honourable justices and judges, distinguished scholars and law professors, bankers, students and the general public would find this initiative useful.

I would like to express my profound appreciation to the Editorial Board of the Nigerian Banking Law Reports under the distinguished chairmanship of Prof. Anifalaje, an erudite professor of law and the Dean of the Faculty of Law, Uni-versity of Ibadan, ably assisted by seasoned legal practitio-ners and staff of the Legal Department of the Corporation, for their patriotic commitment, diligence and ingenuity for details, that went into the production of the N.B.L.R. They left no stone unturned in bringing the Corporation’s dream of making this worthy contribution to legal knowledge and

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research a reality. Their commitment in ensuring the com-pletion of the project is highly commendable.

Management will on its part do everything possible to en-sure that publication of the Nigerian Banking Law Reports (N.B.L.R.) is sustained.

G.A. Ogunleye, OFR Managing Director/Chief Executive November, 2005

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TABLE OF CONTENTS

Index of Table of Cases Reported ....................... xxiIndex of Subject Matter ...................................... xxiiiIndex of Nigerian Cases referred to .................... xlviiIndex of Foreign Cases referred to ..................... lixIndex of Nigerian Statutes referred to ................ lxiiiIndex of Nigerian Rules of Court referred to ......... lxxiIndex of Books referred to ................................. lxxiii

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TABLE OF CASES REPORTED

Page 1. Abule v. FRN ....................................................... 12. African Pulp and Paper Mills Ltd v. NDIC .......... 4003. Ali v. FRN ........................................................... 3134. Allied Bank of Nigeria Plc v. A.G. Mijinyawa

and Co Nigeria Ltd ........................................... 4575. Alpha Allied Nigeria Ltd v. NDIC ........................ 4406. BON Ltd v. Akintoye ............................................ 5437. BON Ltd v. Idirisu ............................................... 8738. BON Ltd v. Saleh ................................................. 5689. Bendel Feed and Flour Mills Ltd v. NIMB Ltd ..... 83010. Bulletin Construction Co Ltd v. NDIC ................. 11111. Chami v. Trade Bank Plc ..................................... 68512. Commercial Bank of Africa Ltd v. Lati Alagbada

and Sons Ltd ..................................................... 7213. Comptroller, NPS v. Adekanye ............................ 59314. Co-operative and Commerce Bank v. O’Silvawax

Int Ltd .............................................................. 39315. D. Stephens Ind Ltd v. Bank of Credit and Com-

merce Int (Nigeria) Ltd ..................................... 69416. Effiom v. Director of Prisons, NPS ...................... 61817. Ejiogu v. NDIC .................................................... 44918. Eka Ltd v. NDIC .................................................. 67419. Ekeolere v. UBN Plc ............................................ 79620. Ekwunife v. FRN ................................................. 9021. FMBN v. NDIC ................................................... 18022. FRN v. Agboola .................................................. 24023. FRN v. Akinnigbagbe ......................................... 4124. FRN v. Ebong ..................................................... 20025. FRN v. Effiom ..................................................... 71626. FRN v. Folarin ................................................... 33927. FRN v. Mohammed ............................................. 77628. FRN v. Onakoya ................................................. 12529. FRN v. Pepple .................................................... 164

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30. FRN v. Savannah and Chemical Ind Ltd ............. 28431. FRN v. Uzoahia .................................................. 76632. Garba v. Attorney-General and Min. of Justice,

FRN ................................................................. 46533. Gyang v. CBN, Kaduna ....................................... 23134. Inegbedion v. NDIC ............................................. 38035. Isoka v. Attorney-General of the Federation ........ 89436. Moyosore Ent Nigeria Ltd v. NDIC ..................... 33537. NDIC v. NIDB Ltd ............................................... 7938. NDIC v. Alpha Sofitel Hotels Plc ......................... 11839. NDIC v. Nyamatai Ent Ltd (No. 1) ...................... 49640. NDIC v. Nyamatai Ent Ltd (No. 2) ...................... 53241. NUB Ltd v. Suleiman ........................................... 92342. Odaro v. FRN ...................................................... 1943. Odutola v. Afribank Nigeria Ltd .......................... 31944. Owena Bank (Nigeria) Plc v. Punjab National

Bank Ltd ........................................................... 90745. S.M. Okeke and Sons Nigeria Ltd v. NDIC .......... 36446. Saeby Jernstoberi Maskin Fabric A/S v. Olaogun

Ent Ltd ............................................................. 85347. Savannah Bank of Nigeria Plc v. Opanubi ........... 51648. Savannah Bank of Nigeria Plc v. Prime Man-

agement System Ltd .......................................... 56149. Societe Generale Bank Nigeria Ltd v. Afekoro ..... 62750. Star Paints Industries Ltd v. Ogunlela ................. 78551. Trade Bank Plc v. Rims Merchant Bank Ltd ........ 72852. UBA Ltd v. Ademuyiwa ....................................... 47353. UBA Plc v. Daniel Holdings Ltd .......................... 81654. UBA Plc v. Daniel ............................................... 70555. UBA Plc v. Ekene Dili Chukwu (Nigeria) Ltd ...... 65256. UBN Ltd v. Oki .................................................... 50357. Unibiz Nigeria Ltd v. Equity Bank Ltd ................. 689

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INDEX OF SUBJECT MATTER

ACTION Parties to an action – Joinder of – Guiding principles

Alpha Allied Nigeria Ltd v. NDIC [1999] 9 N.B.L.R. 440

APPEAL Failed Banks Tribunal – Section 5 Failed Banks Decree

No. 18 of 1994 (as amended) – Whether governs ap-peal from Failed Banks Tribunal to Special Appeal Tribunal and not the 1979 Constitution relating to ap-peal from High Court to Court of Appeal Odaro v. FRN [1999] 9 N.B.L.R. 19

Special Appeal Tribunal – Whether can entertain Appeal by interested person – Section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) – Scope thereof NDIC v. Alpha Sofitel Hotel Plc [1999] 9 N.B.L.R. 118

BANKING Account – Account in credit – When bank may close –

Duty of bank before closing Ekeolere v. UBN Plc [1999] 9 N.B.L.R. 796

Account – Closing of – Principles governing Ekeolere v. UBN Plc [1999] 9 N.B.L.R. 796

Account – Closure of same by customer – Notice to be given thereto – How made – Closure by banker – No-tice required – Consequences of closure D. Stephens Ind Ltd v. Bank of Credit and Commerce Int (Nige-ria) Ltd [1999] 9 N.B.L.R. 694

Account – Oral instruction to close – Whether customer can give – Relevant considerations Ekeolere v. UBN Plc [1999] 9 N.B.L.R. 796

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Accounts – Customers having two accounts – How treated BON Ltd v. Akintoye [1999] 9 N.B.L.R. 543

Bank – Meaning of – Federal Mortgage Bank – Whether falls within the meaning of “Bank” as envisaged by Banks and Other Financial Institutions Decree (BOFID) No. 25 of 1991 FMBN v. NDIC [1999] 9 N.B.L.R. 180

Bank – Revocation of banking licence – Effect of – Whether amounts to death of the Company Co-operative and Commerce Bank v. O’Silvawax Int Ltd [1999] 9 N.B.L.R. 393

Bank – Revocation of licence – Whether a bank whose li-cence has been revoked can sue or be sued or prose-cute an appeal Co-operative and Commerce Bank v. O’Silvawax Int Ltd [1999] 9 N.B.L.R. 393

Bank draft crossed “Not negotiable, Account payee only” – Duty on a banker thereof – Liability of the Bank UBA Plc v. Ekene Dili Chukwu (Nigeria) Ltd [1999] 9 N.B.L.R. 652

Bank loan/advances – Repayment of – When due – Whether can be implied – Need for either notice or demand to issue – Applicable principles UBN Ltd v. Oki [1999] 9 N.B.L.R. 503

Banker and customer relationship – Dishonour of company’s cheques because of conflicting instruc-tions from the Directors – Whether dishonour of cus-tomer’s cheque wrongful Savannah Bank of Nigeria Plc v. Prime Management System Ltd [1999] 9 N.B.L.R. 561

Banker and customer relationship – How determined Ekeolere v. UBN Plc [1999] 9 N.B.L.R. 796

Banker and customer relationship – Nature of African Pulp and Paper Mills Ltd v. NDIC [1999] 9 N.B.L.R. 400

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Banker and customer relationship – Nature of – Customer suing bank – Alleging malpractices against bank’s staff – Whether staff to be made a party to the action BON Ltd v. Saleh [1999] 9 N.B.L.R. 568

Banker and customer relationship – Right of action for payment of overdraft – When arises – Under- lying considerations UBN Ltd v. Oki [1999] 9 N.B.L.R. 503

Banker and customer relationship – When exists Gyang v. CBN, Kaduna [1999] 9 N.B.L.R. 231

Banker and customer relationship – Whether within juris-diction of Federal High Court – Section 230(1)(d) of 1979 Constitution as amended by Decree No. 107 of 1993 Allied Bank of Nigeria Plc v. A.G. Mijinyawa and Co Nigeria Ltd [1999] 9 N.B.L.R. 457

Bearer’s cheque – Purport of section 7(3) Bills of Ex-change Act Cap 35 Laws of the Federation of Nigeria, 1990 UBA Plc v. Ekene Dili Chukwu (Nigeria) Ltd [1999] 9 N.B.L.R. 652

Cash versus bank guarantee – Whether synonymous – Star Paints Industries Ltd v. Ogunlela [1999] 9 N.B.L.R. 785

Central Bank of Nigeria – Whether a proper party to this suit Gyang v. CBN, Kaduna [1999] 9 N.B.L.R. 231

Cheque – Bearing “pay cash” presented by bearer – Long delay by bank in honouring cheque – Customer ask-ing for return of cheque in consequence thereof – Bank obliging – Whether return of cheque to bearer constitutes a wrongful dishonour Odutola v. Afribank Nigeria Ltd [1999] 9 N.B.L.R. 319

Cheque – Wrongful dishonour – Damages – Where cus-tomer a businessman – Measure of Odutola v. Afri-bank Nigeria Ltd [1999] 9 N.B.L.R. 319

[1999] 9 N.B.L.R.


xxvi

Cheque – Wrongful dishonour – Principles applicable Odutola v. Afribank Nigeria Ltd [1999] 9 N.B.L.R. 319

Cheque – Wrongful dishonour of – Breach of contract – Damages – Measure of UBA Ltd v. Ademuyiwa [1999] 9 N.B.L.R. 473

Cheque bearing “pay cash” wrongfully dishonoured – Whether constitutes libel Odutola v. Afribank Nige-ria Ltd [1999] 9 N.B.L.R. 319

Debt – When does cause of action arise in a banker/customer relationship – When repayable Commercial Bank of Africa Ltd v. Lati Alagbada and Sons Ltd [1999] 9 N.B.L.R. 72

Demand of money from bank – Whether to be made be-fore issue of writ Ekeolere v. UBN Plc [1999] 9 N.B.L.R. 796

Deposit account – Implication of Ekeolere v. UBN Plc [1999] 9 N.B.L.R. 796

Deposit of money into bank – On whom lies the onus – Whether onus of proof is static UBA Plc v. Daniel Holdings Ltd [1999] 9 N.B.L.R. 816

Deposit of money into bank account – Receipt of – How proved – Whether the stamping and initials on the pay-in-slips constitutes evidence of receipt UBA Plc v. Daniel Holdings Ltd [1999] 9 N.B.L.R. 816

Disputes between two banks – Action to recover money placed on short term deposit by one bank with another – Whether the State High Court or Federal High Court can entertain in view of section 230(1)(d) of the Con-stitution of Federal Republic of Nigeria, 1979 (as amended) FMBN v. NDIC [1999] 9 N.B.L.R. 180

Duties of bank to customers Ekeolere v. UBN Plc [1999] 9 N.B.L.R. 796

[1999] 9 N.B.L.R.


xxvii

Equipment leasing – Rental dues thereon – Whether a debt owed to bank under the Decree African Pulp and Paper Mills Ltd v. NDIC [1999] 9 N.B.L.R. 400

Facility – Bank recalling facility – Whether automatically means that customer paid back the facility Unibiz Ni-geria Ltd v. Equity Bank Ltd [1999] 9 N.B.L.R. 689

Failed Banks Tribunal – Interest on judgment debt – Whether has power to award interest on judgment debt in civil trials – Rate thereof – Whether a Failed Bank can still charge interest African Pulp and Paper Mills Ltd v. NDIC [1999] 9 N.B.L.R. 400

Failed Banks Tribunal – Jurisdiction of over matters “arising in the ordinary course of business” – Mean-ing of – Section 3(1)(a) Failed Banks Decree No. 18 of 1994 (as amended) considered African Pulp and Paper Mills Ltd v. NDIC [1999] 9 N.B.L.R. 400

Failed Banks Tribunal – Recovery of debt – Liability of director of company – How established – What appli-cant must prove to succeed in an application for re-covery of debt NDIC v. Nyamatai Ent Ltd (No. 2) [1999] 9 N.B.L.R. 532

Failed Banks Tribunal – Whether bound to accept docu-mentary evidence in civil trial – Where uncontro-verted African Pulp and Paper Mills Ltd v. NDIC [1999] 9 N.B.L.R. 400

Funds in a bank account – Transfer of from one account to the other – Whether police competent to effect transfer Societe Generale Bank Nigeria Ltd v. Afe-koro [1999] 9 N.B.L.R. 627

Interest – Claim for – How stated Saeby Jernstoberi Maskin Fabric A/S v. Olaogun Ent Ltd [1999] 9 N.B.L.R. 853

[1999] 9 N.B.L.R.


xxviii

Interest on loan – Power of bank to charge – Section 15 Banking Act Cap 28 Laws of the Federation of Nige-ria, 1990 UBA Plc v. Daniel [1999] 9 N.B.L.R. 705

Interest rate – Bank can unilaterally vary interest rate charged on a loan based on terms of mortgage agree-ment BON Ltd v. Idirisu [1999] 9 N.B.L.R. 873

Interest rate – Failure to sufficiently plead that plaintiff is entitled to an interest rate agreed by both parties – Plaintiff cannot obtain judgment on it Bendel Feed and Flour Mills Ltd v. NIMB Ltd [1999] 9 N.B.L.R. 830

Investment in commercial papers – Investment guaran-teed by credit guarantee bond – Issue of implied guar-antee by a party – Relevance of Trade Bank Plc v. Rims Merchant Bank Ltd [1999] 9 N.B.L.R. 728

Investment in commercial paper – Section 7(1) Securities and Exchange Commission Act Cap 406 Laws of the Federation of Nigeria, 1990 – In relation thereto Trade Bank Plc v. Rims Merchant Bank Ltd [1999] 9 N.B.L.R. 728

Jurisdiction – Federal High Court in relation to banking matters – Scope – Section 230(1)(d) Constitution of Federal Republic of Nigeria, 1979 (as amended) Gy-ang v. CBN, Kaduna [1999] 9 N.B.L.R. 231

Loan – Overdraft – Distinction FRN v. Onakoya [1999] 9 N.B.L.R. 125

Manager extending financial accommodation or credit fa-cility contrary to the bank’s rules and regulations – Section 19(1) Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) – What prosecution must prove FRN v. Savannah and Chemical Ind Ltd [1999] 9 N.B.L.R. 284

Money deposited in the bank – Right of customer to re-cover same – When crystallises – What customer

[1999] 9 N.B.L.R.


xxix

must do – When he can sue UBN Ltd v. Oki [1999] 9 N.B.L.R. 503

Money had and received – Action against a bank – Whether negligence of a bank is an essential element of liability UBA Plc v. Daniel Holdings Ltd [1999] 9 N.B.L.R. 816

Offences – Approving the grant of facility – Amount approved unauthorised – Amount approved not yet disbursed – Whether officer can be convicted under section 19(1) Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) FRN v. Onakoya [1999] 9 N.B.L.R. 125

Offences – Bail – Accused arraigned pursuant to the pro-visions of Failed Banks Decree No. 18 of 1994 (as amended) – Conditions for bail in section 26(1)(a) and (b) of the said Decree – Whether unconstitutional FRN v. Effiom [1999] 9 N.B.L.R. 716

Offences – Bank manager – Failure to take necessary step to secure compliance with Banks Rules and Regulations – Punishment thereunder – Section 46(a) Banks and Other Financial Institutions Decree No. 25 of 1991 considered FRN v. Ebong [1999] 9 N.B.L.R. 200

Offences – Director of company charged under section 18(1)(b) Banks and Other Financial Institutions De-cree No. 25 of 1991 – Company not charged – Whether charge vitiated FRN v. Akinnigbagbe [1999] 9 N.B.L.R. 41

Offences – Falsifying records of books, documents or accounts of bank – Section 435(2)(a) and (b) Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 – Accused forwarding incomplete record from branch to Head office – Whether sufficient

[1999] 9 N.B.L.R.


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evidence of falsification FRN v. Folarin [1999] 9 N.B.L.R. 339

Offences – Grant of unauthorised loan – Section 18(1)(b) Banks and Other Financial Institutions Decree No. 25 of 1991 – Ingredients of offence FRN v. Akinnig-bagbe [1999] 9 N.B.L.R. 41

Offences – Granting of unauthorised loans by Bank Man-ager – Letter of commendation by banking authority – Whether renders transactions legal – Section 20(1)(a) Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Decree No. 18 of 1994 (as amended) FRN v. Folarin [1999] 9 N.B.L.R. 339

Offences – Manager granting credit facilities not in ac-cordance with rules and regulations of the bank – Sec-tion 18(1)(b) and (2) Banks and Other Financial Insti-tutions Decree No. 25 of 1991 – Ingredients of of-fence FRN v. Agboola [1999] 9 N.B.L.R. 240

Offences – Manager of bank charged with granting unau-thorised credit of a certain sum of money – Bank ear-lier on had sued in the State High Court the holder of account for the sum of money stated in the charge stating that the credit was mutually agreed upon – Whether charge not vitiated FRN v. Agboola [1999] 9 N.B.L.R. 240

Offences – Under sections 3(1)(c), 19(1)(c) of the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended) FRN v. Pepple [1999] 9 N.B.L.R. 164

Offences – Under section 18(1)(b) Banks and Other Fi-nancial Institutions Decree No. 25 of 1991 – Deposit of security after grant of facilities – Not meeting re-quirements of section 18 FRN v. Akinnigbagbe [1999] 9 N.B.L.R. 41

Offences pursuant to section 18(3) Banks and Other Fi-nancial Institutions Decree No. 25 of 1991 – Accused holding more than 5% share in company receiving

[1999] 9 N.B.L.R.


xxxi

loan, advance or credit facility – Evidence of share-holding simpliciter by accused – Whether justifies conclusion that he has “personal interest” in any ad-vance, loan or credit facility granted Abule v. FRN [1999] 9 N.B.L.R. 1

Offences pursuant to section 18(3) Banks and Other Fi-nancial Institutions Decree No. 25 of 1991 – What prosecution must prove – What qualifies as “personal interest” therein – Duty of prosecution – Conduct of the accused and surrounding circumstances – Rele-vance of Abule v. FRN [1999] 9 N.B.L.R. 1

Overdraft – Customer admitting receiving – Onus on him to prove repayment – How done BON Ltd v. Saleh [1999] 9 N.B.L.R. 568

Part-heard criminal matter pending before Failed Banks Tribunal coming to the Federal High Court on the dis-solution of Tribunal – Trial de novo – Whether the processes of re-arrest, reading of charge, etc. have to be begun afresh – Section 3(1) Tribunals (Certain Consequential Amendments) Decree No. 62 of 1999 FRN v. Uzoahia [1999] 9 N.B.L.R. 766

Saving account – Passbook – Phrase “this document is valuable and personal to you . . .” on passbook – Whether prevents a third party from holding the pass-book – Relevant considerations Ekeolere v. UBN Plc [1999] 9 N.B.L.R. 796

Statement of account rejected in evidence – When bank can still succeed in its claim UBA Plc v. Daniel [1999] 9 N.B.L.R. 705

“To call in” facility – Meaning of Unibiz Nigeria Ltd v. Equity Bank Ltd [1999] 9 N.B.L.R. 590

BILLS OF EXCHANGE Cheque as – Wrongful dishonour of – Damages to be re-

garded as liquidated – Section 57 Bills of Exchange

[1999] 9 N.B.L.R.


xxxii

Act Cap 35 Laws of the Federation of Nigeria, 1990 – When not applicable UBA Ltd v. Ademuyiwa [1999] 9 N.B.L.R. 473

Rule as to limitation of action – Section 71(1) Bills of Exchange Act Cap 35 Laws of the Federation of Ni-geria, 1990 Saeby Jernstoberi Maskin Fabric A/S v. Olaogun Ent Ltd [1999] 9 N.B.L.R. 853

CENTRAL BANK OF NIGERIA Powers of – Manner of exercising its statutory powers –

How established – Whether a matter of judicial notice of evidence Savannah Bank of Nigeria Plc v. Opanubi [1999] 9 N.B.L.R. 516

COMPANY LAW Enforcement of a statutory right – How action to be

brought Eka Ltd v. NDIC [1999] 9 N.B.L.R. 674 Legal personality of companies – When it ceases Co-

operative and Commerce Bank v. O’Silvawax Int Ltd [1999] 9 N.B.L.R. 393

CONSTITUTIONAL LAW Bail – Conditions for bail in section 26(1)(a) and (b)

Failed Banks Decree No. 18 of 1994 (as amended) – Declared null and void for inconsistency with sections 35(4)(a), (b) and 36(5) of 1999 Constitution FRN v. Effiom [1999] 9 N.B.L.R. 716

Conditions for bail for an accused person, section 35(4) of 1999 Constitution – Nature of FRN v. Effiom [1999] 9 N.B.L.R. 716

Presumption of innocence, section 36(5) of 1999 Consti-tution – Implication of – Conditions for bail in section 26(1)(a) and (b) Failed Banks Decree No. 18 of 1994 (as amended) – Whether guarantees presumption of innocence in favour of accused FRN v. Effiom [1999] 9 N.B.L.R. 716

[1999] 9 N.B.L.R.


xxxiii

Sections 2 and 3 of Tribunals (Certain Consequential Amendment, etc.) Decree No. 62 of 1999 conferring jurisdiction on Federal High Court in respect of Failed Bank Matters, which involved bank and customer re-lationship – Section 251(1)(d) of the Constitution of Federal Republic of Nigeria, 1999 ousting jurisdiction of Federal High Court in respect of bank and cus-tomer relationship – Whether inconsistency between the Decree and the Constitution NUB Ltd v. Suleiman [1999] 9 N.B.L.R. 923

CONTRACT Terms of a contract – Extraneous matters not to be em-

ployed to construe clear and unambiguous terms of a contract BON Ltd v. Idirisu [1999] 9 N.B.L.R. 873

COURT Federal High Court – Jurisdiction of – Whether covers

bank and customer relationship – Section 230(1)(d) of 1979 Constitution as amended by Decree No. 107 of 1993 Allied Bank of Nigeria Plc v. A.G. Mijinyawa and Co Nigeria Ltd [1999] 9 N.B.L.R. 457

CRIMINAL LAW AND PROCEDURE Bail – Conditions for bail in section 26(1)(a) and (b)

Failed Banks Decree No. 18 of 1994 (as amended) – Implication of – Whether unconstitutional FRN v. Ef-fiom [1999] 9 N.B.L.R. 716

Bail – Conditions for bail under section 26 of Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended) – Whether in conflict with section 7(1)(b) African Char-ter on Human and Peoples’ Rights (Ratification and Enforcement) Act Cap 10 Laws of the Federation of Nigeria, 1990 Comptroller, NPS v. Adekanye [1999] 9 N.B.L.R. 593

[1999] 9 N.B.L.R.


xxxiv

Bail – Object of Confession – Principles applicable FRN v. Pepple [1999] 9 N.B.L.R. 164

Conspiracy – How established FRN v. Savannah and Chemical Ind Ltd [1999] 9 N.B.L.R. 284

Conspiracy – How proved FRN v. Akinnigbagbe [1999] 9 N.B.L.R. 41

Conspiracy – Principles applicable FRN v. Agboola [1999] 9 N.B.L.R. 240

Criminal charge predicated on contravention of section 20(2) Banks and Other Financial Institutions Decree No. 25 of 1991 – Complaint against prosecution of one single director/minority shareholder under section 46(a) Banks and Other Financial Institutions Decree No. 25 of 1991 – Relevant consideration thereof – Bank not a party – Propriety of proceedings consti-tuted thereof Abule v. FRN [1999] 9 N.B.L.R. 1

Onus on prosecution – Failure to discharge – Effect FRN v. Pepple [1999] 9 N.B.L.R. 164

Person using statutory person or an insane person to commit a crime – Liability of FRN v. Akinnigbagbe [1999] 9 N.B.L.R. 41

Plea bargain – Attitude of court FRN v. Ebong [1999] 9 N.B.L.R. 200

Presumption of innocence of accused guaranteed by Arti-cle 7(1)(b) African Charter on Human and Peoples’ Rights (Ratification and Enforcement) Act Cap 10 Laws of the Federation of Nigeria, 1990 – Whether breached by conditions for bail in section 26(1)(a) and (b) Failed Banks Decree No. 18 of 1994 (as amended) FRN v. Effiom [1999] 9 N.B.L.R. 716

Sentence of imprisonment – When it takes effect – How computed – Sections 381, 395 Criminal Procedure Act Cap 80 Laws of the Federation of Nigeria, 1990 Odaro v. FRN [1999] 9 N.B.L.R. 19

[1999] 9 N.B.L.R.


xxxv

DAMAGES Wrongful dishonour of cheque – Award of damages –

When an Appellate Court will interfere therewith Sa-vannah Bank of Nigeria Plc v. Prime Management System Ltd [1999] 9 N.B.L.R. 561

Wrongful dishonour of cheque of customer by bank – Customer a businessman – Measure of damages Odutola v. Afribank Nigeria Ltd [1999] 9 N.B.L.R. 319

DEFAMATION Non-payment of debt – Advertisement of mortgaged

property for sale – Whether amounts to defamation BON Ltd v. Akintoye [1999] 9 N.B.L.R. 543

DISHONOURED CHEQUES Dishonoured Cheques (Offences) Act Cap 102 Laws of

the Federation of Nigeria, 1990, sections 1(1)(b) and 2 – Applicable principles FRN v. Folarin [1999] 9 N.B.L.R. 339

Obtaining credit by means of cheque when funds insuffi-cient in account Section 1(1) and (2) of the Dishon-ored Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990 FRN v. Savannah and Chemical Ind Ltd [1999] 9 N.B.L.R. 284

Section 1(1)(b) Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990 – No evidence that withdrawal was made from account into which cheque was paid – Whether charge established FRN v. Agboola [1999] 9 N.B.L.R. 240

EVIDENCE Admission – Of official of corporate body – Whether

should be of his personal knowledge to be admissible BON Ltd v. Saleh [1999] 9 N.B.L.R. 568

[1999] 9 N.B.L.R.


xxxvi

Admission – Upon which to base judgment – To be spe-cific UBA Plc v. Daniel [1999] 9 N.B.L.R. 705

Affidavits – Failure to file counter-affidavit – Effect thereof Ekwunife v. FRN [1999] 9 N.B.L.R. 90

Expert evidence – Attitude of court FRN v. Savannah and Chemical Ind Ltd [1999] 9 N.B.L.R. 284

Not challenged or contradicted – Deemed to have been admitted Commercial Bank of Africa Ltd v. Lati Alagbada and Sons Ltd [1999] 9 N.B.L.R. 72

FAILED BANK Jurisdiction of Federal High Court in respect of – Section

2(1), (3) and 3(2) Tribunal (Certain Consequential Amendments, etc.) Decree 1999 NUB Ltd v. Suleiman [1999] 9 N.B.L.R. 923

Leave of court sought to commence action against Nige-ria Deposit Insurance Corporation – Whether grant-able – Section 417 Companies and Allied Matters Act – Section 23(D)(1) Nigeria Deposit Insurance Corpo-ration (Amendment) Decree No. 5 of 1997 Moyosore Ent Nigeria Ltd v. NDIC [1999] 9 N.B.L.R. 335

Meaning of, section 29 Failed Banks Decree No. 18 of 1994 (as amended) NDIC v. NIDB Ltd [1999] 9 N.B.L.R. 79

NDIC acting on behalf of a bank that is not a failed bank – Whether permissible NDIC v. NIDB Ltd [1999] 9 N.B.L.R. 79

FAILED BANKS TRIBUNAL Appeal against interlocutory decision thereof – Whether

Special Appeal Tribunal can entertain – Interlocutory decision of Failed Banks Tribunal – Whether is a judgment as envisaged in section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) Bulletin Con-struction Co Ltd v. NDIC [1999] 9 N.B.L.R. 111

[1999] 9 N.B.L.R.


xxxvii

Bail – Whether section 26 Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) dealing with conditions for bail conflicts with section 7(1)(b) African Charter on Human and Peoples’ Rights (Ratification and En-forcement) Act Cap 10 Laws of the Federation of Ni-geria, 1990 Comptroller, NPS v. Adekanye [1999] 9 N.B.L.R. 593

Composition of – When duly constituted Inegbedion v. NDIC [1999] 9 N.B.L.R. 380

Conclusion of trial within 21 days – Failure to conclude trial within 21 days – Whether renders decision a nul-lity – Section 4(1) and (2) Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) Garba v. Attorney-General and Min. of Justice, FRN [1999] 9 N.B.L.R. 465

Criminal appeal to Special Appeal Tribunal under the Failed Banks Act – Notice of appeal signed by Coun-sel – Whether notice vitiated FRN v. Mohammed [1999] 9 N.B.L.R. 776

Criminal jurisdiction of – Offences under section 3(1)(b), (c) and (d) Failed Banks Decree No. 18 of 1994 ( as amended) – Which of them qualify as “offences” un-der the Decree for the purpose of section 23(3) of the Failed Banks Decree No. 18 of 1994 (as amended) Odaro v. FRN [1999] 9 N.B.L.R. 19

Criminal trial – Death of accused person – Effect Isoka v. Attorney-General of the Federation [1999] 9 N.B.L.R. 894

Criminal trials before the Failed Banks Tribunal – Whether the High Court has supervisory jurisdiction over – Sections 1(5) and (6) and 3(2) and (3) Failed Banks Decree No. 18 of 1994 (as amended) Effiom v. Director of Prisons, NPS [1999] 9 N.B.L.R. 618

[1999] 9 N.B.L.R.


xxxviii

Criminal trials thereat – Order of remand by Failed Banks Tribunal made without taking of plea – Whether High Court has supervisory jurisdiction over Tribunal – Sections 1(5) and (6) and 3(2) and (3) Failed Banks Decree No. 18 of 1994 (as amended) Effiom v. Direc-tor of Prisons, NPS [1999] 9 N.B.L.R. 618

Criminal trials therein – Accused charged for one offence under section 3(1)(d), Failed Banks Decree No. 18 of 1994 (as amended) – When to invoke section 23(3) of the Failed Banks Decree No. 18 of 1994 (as amended) in such circumstance – Options open to the prosecu-tion Odaro v. FRN [1999] 9 N.B.L.R. 19

Criminal trials therein – Accused tried and convicted for an offence by virtue of section 3(1)(d) Failed Banks Decree No. 18 of 1994 (as amended) – Propriety or otherwise of confiscation order under section 20(2) Failed Banks Decree No. 18 of 1994 (as amended) Odaro v. FRN [1999] 9 N.B.L.R. 19

Criminal trials therein – Accused tried and convicted for an offence under a repealed statute – Act constituting offence committed before repeal of statute – Whether trial unconstitutional pursuant to section 33(12), 1979 Constitution – Whether section 6(1)(d), (e) of Inter-pretation Act conflict with provisions of 1979 Consti-tution Odaro v. FRN [1999] 9 N.B.L.R. 19

Criminal trials therein – Sentence – Effective date thereof – Need for warrant of commitment to show when sen-tence will commence – Whether trial Chairman need state when sentence will commence Ali v. FRN (No. 2) [1999] 9 N.B.L.R. 313

Criminal trials – Trial within 21 (twenty one) days as re-quired by section 4(1) Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) – Whether non-compliance renders decision of the Tribunal

[1999] 9 N.B.L.R.


xxxix

void Comptroller, NPS v. Adekanye [1999] 9 N.B.L.R. 593

Forfeiture of property – Whether applicable to a person who died before the end of trial, section 20 Failed Banks Decree No. 18 of 1994 (as amended) Isoka v. Attorney-General of the Federation [1999] 9 N.B.L.R. 894

Forfeiture of property of accused – Valuation thereof – Whether Special Appeal Tribunal can interfere with the order made by the Lower Tribunal thereto Ali v. FRN (No. 2) [1999] 9 N.B.L.R. 313

Judgment and Order – Setting aside thereof – Applicable principles – “Slip Rule” – Applicability thereof to amendment Ekwunife v. FRN [1999] 9 N.B.L.R. 90

Money deposited as security for bail – Money thereof lodged by the Tribunal in the Central Bank of Nigeria – Whether accused entitled to interest thereon having been discharged and acquitted Ekwunife v. FRN [1999] 9 N.B.L.R. 90

Notice of Appeal against judgment thereof – Where to file same – Section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) and section 18(1), (2) Recovery of Public Property (Special Military Tribunals) Act Cap 389 Laws of the Federation of Nigeria, 1990 Ejiogu v. NDIC [1999] 9 N.B.L.R. 449

Part-heard criminal matter pending before Failed Banks Tribunal coming to the Federal High Court on the dis-solution of Tribunal – Trial de novo – Whether the processes of re-arrest, reading of charge etc have to be begun afresh – Section 3(1) Tribunals (Certain Con-sequential Amendments) Decree No. 62 of 1999 FRN v. Uzoahia [1999] 9 N.B.L.R. 766

Recovery of debt against companies – Joinder of directors – Whether proper – Liability of directors therefor – Section 15(7) Failed Banks Decree No. 18 of 1994 (as

[1999] 9 N.B.L.R.


xl

amended) – Section 290 Companies and Allied Mat-ters Act Cap 59 Laws of the Federation of Nigeria, 1990 Alpha Allied Nigeria Ltd v. NDIC [1999] 9 N.B.L.R. 440

Service of process – How effected under the Failed Banks Tribunal – Effect of – Non-compliance thereof – Schedule 1 paragraphs 5(1)(a), (b), (c), 6(1), (2), (3), 8, 25(3) and 27 S.M. Okeke and Sons Nigeria Ltd v. NDIC [1999] 9 N.B.L.R. 364

Supervisory jurisdiction or power of judicial review of High Court – When exercisable – When not exercis-able – Section 1(5) and (6) Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) Inegbedion v. NDIC [1999] 9 N.B.L.R. 380

Whether has jurisdiction to direct that money deposited as bail be released to the accused in criminal trials when accused discharged and acquitted Ekwunife v. FRN [1999] 9 N.B.L.R. 90

Whether High Court has supervisory jurisdiction – Sec-tion 1(5) and (6) of Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) Comptroller, NPS v. Adekanye [1999] 9 N.B.L.R. 593

FAIR HEARING

Right of fair hearing – When not violated NDIC v. Nya-matai Ent Ltd (No. 1) [1999] 9 N.B.L.R. 496

FUNDAMENTAL RIGHTS

Threatened breach – Right to apply for enforcement Chami v. Trade Bank Plc [1999] 9 N.B.L.R. 685

[1999] 9 N.B.L.R.


xli

GUARANTEE Default by principal to liquidate facility – Arrest of guar-

antor by police – Propriety of Chami v. Trade Bank Plc [1999] 9 N.B.L.R. 685

INTERPRETATION OF STATUTES Sections 417 and 425(1) Companies and Allied Matters

Act Cap 59 Laws of the Federation of Nigeria, 1990 Eka Ltd v. NDIC [1999] 9 N.B.L.R. 674

JUDGMENT AND ORDERS Arrest of – What applicant must show NDIC v. Nyamatai

Ent Ltd (No. 1) [1999] 9 N.B.L.R. 496 Foreign Currency – Judgment in – Whether Nigerian

courts can make Saeby Jernstoberi Maskin Fabric A/S v. Olaogun Ent Ltd [1999] 9 N.B.L.R. 853

In default of appearance – When given Commercial Bank of Africa Ltd v. Lati Alagbada and Sons Ltd [1999] 9 N.B.L.R. 72

Judgments of court – Amendment of – Principles guiding Ali v. FRN (No. 2) [1999] 9 N.B.L.R. 313

JURISDICTION Action for money had and received between two bankers

– Whether State High Court can try Owena Bank Ni-geria Plc v. Punjab National Bank Ltd [1999] 9 N.B.L.R. 907

Federal High Court – Jurisdiction of over matters pertain-ing to Federal Government agency – When Federal High Court can exercise jurisdiction – Section 251(1)(r) Constitution of Federal Republic of Nigeria, 1999 NUB Ltd v. Suleiman [1999] 9 N.B.L.R. 923

Federal High Court – Jurisdiction of over transactions be-tween bank and customer relationship – Whether the word “individual” in proviso of section 230(1)(d) of

[1999] 9 N.B.L.R.


xlii

1979 Constitution as amended by Decree No. 107 of 1993 applies to human being as opposed to corporate body Allied Bank of Nigeria Plc v. A.G. Mijinyawa and Co Nigeria Ltd [1999] 9 N.B.L.R. 457

Federal High Court – Jurisdiction of over transactions be-tween bank and customer relationship – Whether within jurisdiction of Federal High Court – Section 230(1)(d) of 1979 Constitution as amended by Decree No. 107 of 1993 Allied Bank of Nigeria Plc v. A.G. Mijinyawa and Co Nigeria Ltd [1999] 9 N.B.L.R. 457

Inherent jurisdiction – Meaning thereof – When exercis-able – Whether confers jurisdiction which is not statu-tory NDIC v. Alpha Sofitel Hotel Plc [1999] 9 N.B.L.R. 118

Of Court – Federal High Court – Application for bail pending appeal to Court of Appeal under Failed Banks Act – Whether court can entertain FRN v. Mo-hammed [1999] 9 N.B.L.R. 776

LIMITATION OF ACTION

Action between bank and customer – When does time be-gin to run for purposes of Limitation Law BON Ltd v. Saleh [1999] 9 N.B.L.R. 568

Bill of Exchange – Rule applicable to – Section 71(1) Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 Saeby Jernstoberi Maskin Fabric A/S v. Olaogun Ent Ltd [1999] 9 N.B.L.R. 853

LOCUS STANDI NDIC acting on behalf of a bank that is not a failed bank –

Whether permissive – Sections 4(h), 5(1)(a), 15(1)(a) and (c) Nigeria Deposit Insurance Corporation Act Cap 301 Laws of the Federation of Nigeria, 1990 NDIC v. NIDB Ltd [1999] 9 N.B.L.R. 79

[1999] 9 N.B.L.R.


xliii

MORTGAGE

Essential nature thereto – Mortgagee’s power of sale where it arises and when exercisable – Whether af-fected by dispute in loan agreement – Stoppage of mortgagee’s power of sale – How effected BON Ltd v. Akintoye [1999] 9 N.B.L.R. 543

Mortgagee’s power of sale – Whether allegation of sale at under value vitiates NDIC v. Nyamatai Ent Ltd (No. 2) [1999] 9 N.B.L.R. 532

NDIC

Acting on behalf of a bank that has not failed – Whether permissible – Sections 4(h), 5(1)(a), (b) and (c) Nige-ria Deposit Insurance Corporation Act Cap 301 Laws of the Federation of Nigeria, 1990 NDIC v. NIDB Ltd [1999] 9 N.B.L.R. 79

NOTABLE PRONOUNCEMENT

Treatment of a dead person Isoka v. Attorney-General of the Federation [1999] 9 N.B.L.R. 894

POLICE

Civil transaction between banker and customer – Use of police to arrest and harass customer – Propriety of Chami v. Trade Bank Plc [1999] 9 N.B.L.R. 685

Funds in a bank account – Transfer of from one account to the other – Competence of police to order Societe Generale Bank Nigeria Ltd v. Afekoro [1999] 9 N.B.L.R. 627

Power of investigation and arrest – Whether extends to civil cases Chami v. Trade Bank Plc [1999] 9 N.B.L.R. 685

[1999] 9 N.B.L.R.


xliv

PRACTICE AND PROCEDURE Adjournment – Application for adjournment – Principles

governing grant or refusal of NDIC v. Nyamatai Ent Ltd (No. 1) [1999] 9 N.B.L.R. 496

Cause of action – What consists Eka Ltd v. NDIC [1999] 9 N.B.L.R. 674

Cause of action – Whether any – How determined Eka Ltd v. NDIC [1999] 9 N.B.L.R. 674

High Court – Whether has supervisory jurisdiction over the Failed Banks Tribunal – Sections 1 and 3 of the Failed Banks Decree No. 18 of 1994 (as amended) construed Effiom v. Director of Prisons, NPS [1999] 9 N.B.L.R. 618

Judgment – Amendment thereof – “Slip Rule” – Principle applicable Ali v. FRN (No. 2) [1999] 9 N.B.L.R. 313

Parties to an action – Joinder of – Principles guiding Alpha Allied Nigeria Ltd v. NDIC [1999] 9 N.B.L.R. 440

Service of process – Failure thereof on a party – Effect Alpha Allied Nigeria Ltd v. NDIC [1999] 9 N.B.L.R. 440

Service of process – Modes of – Direct and substituted service – What constitutes – Principles guiding ser-vice of process S.M. Okeke and Sons Nigeria Ltd v. NDIC [1999] 9 N.B.L.R. 364

Stay of execution – Application of stay of execution pending appeal – Guiding principles Ejiogu v. NDIC [1999] 9 N.B.L.R. 449

SPECIAL APPEAL TRIBUNAL Forfeiture of property of accused – Lower Tribunal mak-

ing order – Whether Special Appeal Tribunal can in-terfere Ali v. FRN (No. 2) [1999] 9 N.B.L.R. 313

[1999] 9 N.B.L.R.


xlv

Judgment of – Amendment of – Principle of “Slip Rule” – Applicability Ali v. FRN (No. 2) [1999] 9 N.B.L.R. 313

STATUTE Interpretation of statutes – Two conflicting Decrees –

How interpreted – Which prevails Inegbedion v. NDIC [1999] 9 N.B.L.R. 380

Section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) – Whether inconsistent with section 222(a) 1979 Constitution – Where a provision of the Decree is inconsistent with the Constitution – Which one pre-vails – Section 8 Failed Banks Decree No. 18 of 1994 (as amended) considered NDIC v. Alpha Sofitel Ho-tel Plc [1999] 9 N.B.L.R. 118

WORDS AND PHRASES Failed bank – Definition of – Section 29 Failed Banks

(Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 as amended by section 7 of Failed Banks (Recovery of Debts) and Financial Malpractices in Banks (Amendment) Decree No. 18 of 1995 NDIC v. NIDB Ltd [1999] 9 N.B.L.R. 79

Loan, advances, credit FRN v. Agboola [1999] 9 N.B.L.R. 240

“Person aggrieved” for the purposes of appealing – Who qualifies Societe Generale Bank Nigeria Ltd v. Afe-koro [1999] 9 N.B.L.R. 627

Trial de novo FRN v. Uzoahia [1999] 9 N.B.L.R. 766

xlvii

INDEX OF NIGERIAN CASES REFERRED TO

A ACB Ltd v Attorney-General of Northern Ni-

geria (1967) All NLR 76 652ACB v Apugo (1995) 6 NWLR (Part 339) 65 561Abadom v The State (1997) 1 NWLR (Part

479) 1 125Abekhe v NDIC (1995) 7 NWLR (Part 406)

228 335Abimbola v Bank of America Ltd (1968) 2

C.CHC.J. 547 652Adegbite v Ogunfaolu (1990) 4 NWLR (Part

146) 578 532Adeigbe v Kusimo (1965) NMLR 284 440Adelumola v The State (1988) 1 NWLR (Part

73) 683 125Adepetu v The State (1996) 6 NWLR (Part

452) 90 125Adesokan v Adetunji (1994) 5 NWLR (Part

346) 540 716Adeyemo v Arokopo (1988) 2 NWLR (Part

79) 703 873Adimora v Ajufo (1988) 3 NWLR (Part 80) 1 503Adio v Attorney-General of Oyo State (1990)

7 NWLR (Part 163) 448 180Aeroflot Soviet Airlines v UBA (1986) 3

NWLR (Part 27) 188 816Agage v Malami (1992) 9 NWLR (Part 264)

242 796Agu v Ikwibe (1991) 3 NWLR (Part 180) 385 231Agunbiade v Okunoga and Co (1961) 1 All

NLR 110 90Agwuna v Attorney-General of the Federation

(1995) 5 NWLR (Part 396) 418 380, 593, 618Ajao v Alao (1986) 5 NWLR (Part 45) 802 830

[1999] 9 N.B.L.R.


xlviii

Ajayi v Moregbe (1993) 6 NWLR (Part 301)512 627

Akande v General Electric Co (1979) 3 LRN 187 627

Akilluli v Ayo-Odugbesan (1992) 8 NWLR (Part 288) 177 72

Alaka v Adekunle (1959) LLR 76 90Allied Bank of Nigeria Ltd v Akubueze (1997)

6 NWLR (Part 509) 374 319, 568Anabaronye v Nwakaihe (1997) 1 SCNJ 161 231Angyu v Malami (1992) 9 NWLR (Part 264)

242 72, 503Apari v Hose (1999) 5 NWLR (Part 604) 541 503Ariyo v Ogele (1968) 1 All NLR 1 618Aromire v Awoyemi (1972) 1 All NLR 101 873Asiyanbi v Adeniji (1967) 1 All NLR 82 313Atano v The State (1988) 2 NWLR (Part 75)

201 240Atoyebi v Gov. Oyo State (1994) 5 NWLR

(Part 344) 290 180Attorney-General of Anambra State v

Nwobodo (1992) 7 NWLR (Part 256) 711 496Attorney-General of Bendel State v Attorney-

General of the Federation (1982) 3 NCLR 1 503Attorney-General of the Federation v Sode

(1990) 1 NWLR (Part 128) 500 593, 618Attorney-General of Oyo State v Fairlakes

Hotel Ltd (1988) 5 NWLR (Part 92) 1 180Attribs v UBA Ltd (1968) 1 ALR Comm. 56 652Atuyeye v Ashamu (1987) 1 NWLR (Part 49)

267 694Awofeso v Oyenuga (1996) 7 NWLR (Part

460) 360 830Azeez v The State (1986) 2 NWLR (Part 23)

541 90

B BON Ltd v Muri (1998) 2 NWLR (Part 536)

153 543

[1999] 9 N.B.L.R.

Index of Nigerian Cases referred to

xlix

Bakare v The State (1987) 1 NWLR (Part 52) 579 125

Balogun v NBN (1978) 3 SC 155 319, 652Bamgboye v University of Ilorin (1991) 8

NWLR (Part 207) 1 816Bank of the North Ltd v Akorede (1995) 1

NWLR (Part 374) 762 568Barclays Bank v Abubakar (1977) 10 SC 13 830Bi Zee Bee Hotels Ltd v Allied Bank (Nigeria)

Ltd (1996) 8 NWLR (Part 465) 176 180, 457Boshali v Allied Commercial Exporters Ltd

(1961) 1 All NLR 917 90, 400Broadline Enterprises Ltd v Monterey Mari-

time Corporation (1995) 9 NWLR (Part 417) 1 705

C C.C.B. (Nigeria) Plc v O’Silvawax Interna-

tional Limited (1999) 7 NWLR (Part 609) 97 894

Chia v The State (1996) 6 NWLR (Part 455) 465 125

Chief Lands Officer v Alor (1991) 4 NWLR(Part 187) 617 90

Chiga v Umaru (1986) 3 NWLR (Part 29) 400 440Christaben Groups Ltd v NDIC (1998) 4

FBTLR 30 364Clark v The State (1986) 4 NWLR (Part 35)

381 240Clement v Iwuanyanwu (1989) 3 NWLR (Part

107) 39 716Coker v Ajewole (1976) 9 and 10 SC 17 543Combined Trade Ltd v All States Trust Bank

Ltd (1998) 12 NWLR (Part 576) 56 674Commerce Assurance Ltd v Alli (1992) 3

NWLR (Part 232) 710 180

[1999] 9 N.B.L.R.


l

Comptroller, Nigeria Prisons Service vAdekanye Appeal No. CA/L/27/99 (Unre-ported) 716

D Dawa v The State (1980) 8–11 SC 236 164Debs v Cenico (Nigeria) Ltd (1986) 3 NWLR

(Part 32) 846; (1986) 6 SC 179 568

E Eboigbe v NNPC (1994) 5 NWLR (Part 347)

649 503Ede v Omeke (1992) 5 NWLR (Part 242) 428 180Egbe v Adefarasin (1987) 1 NWLR (Part 47)

1 503Egbuna v Amalgamated Press (1967) 1 All

NLR 25 319Egbuna v Egbuna (1989) 2 NWLR (Part 106)

773 72, 90Egbunike v African Continental Bank Ltd

(1995) 2 NWLR (Part 375) 34 532Eka-Eteh v Nigeria Housing Development So-

ciety Ltd (1973) 6 SC 183 532Ekeogu v Aliri (1991) 3 NWLR (Part 179) 258 503Ekerete v Ete (1925) 6 NLR 118 90Elias v Disu (1962) 1 SCNLR 361 873Erim v State (1994) 18 ALRCN 73; (1994) 5

NWLR (Part 346) 522 41, 240Eyu v The State (1988) 2 NWLR (Part 78) 602 716Ezenwosu v Ngonadi (1988) 3 NWLR (Part

81) 163 393

F FRN v Kalgo (1998) 2 FBTLR 14 41, 284Fasikoen II v Oluronke II (1999) 2 NWLR

(Part 589) 1 705Fawehinmi v Abacha (1996) 9 NWLR (Part

475) 710 465, 593, 716Fawehinmi v N.B.A. (No. 2) (1989) 2 NWLR

(Part 105) 558 627

[1999] 9 N.B.L.R.


li

Folbod Investments Limited v NDIC (1997) 1 FBTLR 165 111, 118

G Gbadamosi v The State (1991) 6 NWLR (Part

196) 182 240Globe Fishing Ind. Ltd v Coker (1990) 7

NWLR (Part 162) 265 180, 694Guardian Newspaper Ltd v Attorney-General of

Federation (1995) 5 NWLR (Part 398) 703 465

H Holman Bros. (Nigeria) Ltd v Kigo (Nigeria)

Ltd (1980) 8–11 SC 43 503

I Ibeh v The State (1997) 1 NWLR (Part 484)

632 125Ifegwu v FRN (1997) 1 FBTLR 86 19, 240Ijale v Leventis Co Ltd (1961) 1 All NLR 762 231Ijebu-Ode Local Govt. v Adedeji Balogun and

Co Ltd (1991) 1 NWLR (Part 166) 136 816Ikemson v The State (1989) 3 NWLR (Part

110) 455 164, 240Ikonne v COP (1986) 4 NWLR (Part 36) 473 627Imana v Robinson (1979) 3–4 SC 1; (1979) 2

and 4 SC 1 532, 816In re Afolabi (1987) 5 NWLR (Part 63) 18 627In re Ugadu (1989) 5 NWLR (Part 93) 189 627Inlaks v Polish Ocean Lines (1988) FHCLR

56 728Insurance Brokers of Nigeria v Atlantic Tex-

tile Man. Co Ltd (1996) 8 NWLR (Part 466) 316 568

Ishola v S.G.B. (Nigeria) Ltd (1997) 2 NWLR(Part 488) 405; (1997) 47 LRCN 336 72, 503

Iyimoga v Governor of Plateau State (1994) 8 NWLR (Part 360) 73 568

[1999] 9 N.B.L.R.


lii

J Jammal Steel Structures v ACB Ltd (1973) 1

All NLR (Part 2) 208 907Jammal v State (1996) 9 NWLR (Part 472)

352 776Jos Steel Rolling Co Ltd v Bernestieli (Nige-

ria) Ltd (1995) 8 NWLR (Part 412) 201 853

K Kaduna Textiles Ltd v Umar (1994) 1 NWLR

(Part 319) 143 496Karimu v The State (1996) 7 NWLR (Part

462) 579 125Kate Enterprises Ltd v Daewoo (Nigeria) Ltd

(1985) 2 NWLR (Part 5) 116 568Khaleel v The State (1997) 8 NWLR (Part

516) 237 125Kigo (Nigeria) Ltd v Holman Bros (Nigeria)

(1980) 5–7 SC 60 785Koya v UBA Ltd (1997) 1 NWLR (Part 481)

251 473Kwasikwu Farms Limited v Attorney-General

of Bendel State (1986) 1 NWLR (Part 19) 695 111

L Labiyi v Anretiola (1992) 8 NWLR (Part 258)

139 830Lekwot v Judicial Tribunal (1997) 8 NWLR

(Part 515) 22 380Lijadu v Lijadu (1991) 1 NWLR (Part 169)

627 72Lion Investments Ltd v NDIC (1997) 2

FBTLR 16 532

M Macaulay v NAL Merchant Bank Ltd (1990) 4

NWLR (Part 144) 283 830, 873Macebuh v NDIC (1997) 2 FBTLR 1 532

[1999] 9 N.B.L.R.


liii

Majekodunmi v Co-operative Bank Ltd (1997) 10 NWLR (Part 524) 198 41, 543

Majekodunmi v The Queen (1952) 14 WACA64 41

Metal Construction (W.A.) Ltd v Migliore: In Re Ogundare (1990) 1 NWLR (Part 126) 299 180

Mofam Farms and Food Ltd v I.B.W.A. (1991) 7 NWLR (Part 205) 643 90

Mogaji v Odofin (1978) 4 SC 91 873Mohammed v Olawunmi (1993) 4 NWLR

(Part 287) 254 593Morakinyo v Adesoyero (1995) 7 NWLR (Part

409) 602 496Moses Ola and Sons (Nigeria) Ltd v BON Ltd

(1992) 3 NWLR (Part 229) 377 543

N NBN Ltd v Mobil Oil (Nigeria) Ltd (1994) 2

NWLR (Part 328) 534 652NDIC v Afro-Continental Nigeria Ltd (1997)

1 FBTLR 125 118NDIC v F.M.B.N. (1997) 2 NWLR (Part 490)

735 457, 923NIDB v Fembo (Nigeria) Ltd (1997) 2 NWLR

(Part 489) 543 457NNPC v Okor (1998) 1 NWLR (Part 559) 637 231National Bank of Nigeria Ltd v Guthrie Nige-

ria Ltd (1993) 3 NWLR (Part 284) 643 72, 705National Electric Power Authority v Alli

(1992) 8 NWLR (Part 259) 279 532National Insurance Corporation of Nigeria v

Power and Industrial Engineering CompanyLtd (1986) 1 NWLR (Part 14) 1 593

National Insurance Corporation of Nigeria vPower and Industrial Engineering CompanyLtd (1990) 1 NWLR (Part 129) 697 313

[1999] 9 N.B.L.R.


liv

Nigeria Arab Bank Ltd v Contex Ltd (1999) 6 NWLR (Part 608) 648 593

Nigeria Housing Dev. Soc. Ltd v Mumuni (1977) 2 SC 57 543

Nigerian Airways Ltd v Ahmadu (1991) 6 NWLR (Part 198) 492 72

Nigerian Maritime Services Ltd v Afolabi (1978) 2 SC 79 90, 400

Nishizawa v Jethwani (1984) 12 SC 234 830Njovens v State (1973) 5 SC 17; (1973) NSCC

257 240, 284Nsirim v Nsirim (1990) 3 NWLR (Part 138)

285 543, 561Nwabuoku v Ottih (1961) 2 SCNLR 232 532Nwoye and Sons v C.C.B. Plc (1993) 8

NWLR (Part 310) 210 125Nzom v Jinadu (1987) 1 NWLR (Part 51) 533 393, 894

O Obanor v C.O.P. (1959) WNLR 230 313Obembe v Wemabod Estates Ltd (1977) 5 SC

115 543Obi v Owolabi (1990) 5 NWLR (Part 153)

702 561Obiefuna v Okoye (1961) All NLR 357 503Obimonure v Erinosho (1965) 1 All NLR 250 90Obiora v Commissioner of Police (1990) 7

NWLR (Part 161) 222 313Obo v Commissioner of Education, Bendel

State (1993) 2 NWLR (Part 273) 46 532Odaro v NDIC (1999) 2 FBTLR 42 313Odiase v Agho (1972) 1 ANLR (Part 1) 170 503Odubeko v Fowler (1993) 7 NWLR (Part 308)

637 503Odulaja v Haddad (1973) 11 SC 35 90, 400Ogbechie v Onochie (1986) 2 NWLR (Part

23) 484 627Ogbimi v Ololo (1993) 7 NWLR (Part 304)

128 503

[1999] 9 N.B.L.R.


lv

Ogbomor v State (1985) 1 NWLR (Part 2) 223 19Ogundeji v I.B.W.A. Ltd (1993) 2 NWLR

(Part 278) 690 543Ogunsanya v Dada (1992) 4 SCNJ 162 79Oguonzee v The State (1997) 8 NWLR (Part

518) 566 125Ojaka v Ogueze (1962) 1 SCNLR 112 90Ojemen v Momodu II (1983) 1 SCNLR 188 627Ojogbo Olaja – Oriri of Ugborado v Itsekiri

Communal Land Trustees (1973) NMLR908 118

Ojukwu v Gov. of Lagos State (1985) 2 NWLR (Part 10) 806 118

Okafor v Ikeanyi (1979) 3–4 SC 99–104 319Okai v Ayika II 12 WACA 31 568Okenwa v Mil Gov. Imo State (1996) 6

NWLR (Part 455) 394 543Okereke v Ejiofor (1996) 3 NWLR (Part 434)

90 364Okonkwo v Co-operative and Commerce Bank

(Nigeria) Plc (1997) 6 NWLR (Part 507) 48 543Okoroafor v Miscellaneous Offences Tribunal

(1994) 4 NWLR (Part 387) 63–70 593Okoroafor v Miscellaneous Offences Tribunal

(1995) 4 NWLR (Part 387) 59 465Okupe v Ifemembi (1974) 3 SC 97 543Olagunji v Yahaya (1998) 3 NWLR (Part 542)

501 674Olujinle v Adeagbo (1988) 2 NWLR (Part 75)

238 593Olukade v Alade (1976) 1 All NLR (Part 1) 67 816Omoregbe v Lawani (1980) 3–4 SC 108 90Omoruyi v New Nigeria Bank Plc (1998) 1

FBTLR 1 532Onabanjo v Ewetuga (1993) 4 NWLR (Part

288) 445 440Onifade v Olayiwola (1990) 7 NWLR (Part

161) 130 873

[1999] 9 N.B.L.R.


lvi

Onogwu v The State (1995) 6 NWLR (Part 401) 276 19

Opebiyi v Oshoboja (1976) 9 and 10 SC 195 393Osadebay v Attorney-General of Bendel

(1991) 1 NWLR (Part 169) 525 593, 618Oshinjinrin v Elias (1970) 1 All NLR 153 816

P Popoola v Adeyemo (1992) 8 NWLR (Part

257) 1 627

Q Queen v Bukar (1961) All NLR 646 19Queen v Tuke (1961) All NLR 258 19

R R.A. Salami and Sons v Savannah Bank (Ni-

geria) Ltd (1990) 2 NWLR (Part 130) 106 473Re Madaki (1990) 4 NWLR (Part 143) 266 118Royal Petroleum Co Ltd v F.B.N. Ltd (1997) 6

NWLR (Part 5) 584–599 319

S Sabbagh, Assad v Bank of West Africa (1966)

All NLR 234 543Sanusi v Ayoola (1992) 9 NWLR (Part 265) 275 90Saraki v Societe Generale Bank (1995) 1

NWLR (Part 371) 325 516Shodeinde v The Registered Trustees of the

Ahmadiyya (1980) 1–25 SC 225 111Shodeinde v The Registered Trustees of the

Ahmadiyya Movement in Islam (1980) 1–2 SC 163 785

Shuaibu v N.A.B. Ltd (1998) 5 NWLR (Part 551) 582 543

Shyllon v Asein (1994) 6 NWLR (Part 353) 670 694

Sken Consult v Ukey (1981) 1 SC 6 90, 440Solanke v Abed (1962) 1 All NLR 230 543

[1999] 9 N.B.L.R.


lvii

Stephen Industries Limited v Bank of Credit and Commerce Ltd (1999) 11 NWLR (Part 625) 29 796

Sugh v The State (1988) 2 NWLR (Part 77) 475 125Sun Insurance Office Ltd v Ojemuyiwa (1965)

1 All NLR 1 627

T Temco Eng. and Co Ltd v S.B.N. Ltd (1995) 5

NWLR (Part 397) 607 543The State v Danjuma (1997) 5 NWLR (Part

506) 512 125The State v Danjuma (1996) 8 NWLR (Part

469) 660 125Theophilus v The State (1996) 1 NWLR (Part

423) 139 125Thomas v Olufosoye (1986) 1 NWLR (Part

18) 669 79Timitimi v Amabebe (1953) 14 WACA 374 111, 618Tsokwa Motors (Nigeria) Ltd v UBN Ltd

(1996) 9 NWLR (Part 471) 129 543Tukur v Govt. of Taraba State (1997) 6

NWLR (Part 510) 549 830

U UBA Ltd v Ibhafidon (1994) 1 NWLR (Part

318) 90 125UBA Ltd v Michael O’Abimbolu and Co

(1995) 9 NWLR (Part 419) 371 503UBN v Nwoye (1996) 3 NWLR (Part 435)

135–142 319UBN Ltd v Ozigi (1994) 3 NWLR (Part 333)

385 543, 705, 873UBN Ltd v Sax (Nigeria) Ltd (1994) 8 NWLR

(Part 361) 150 543, 873UBN Plc v Scpok Nigeria Ltd (1998) 12

NWLR (Part 578) 439 473Union Bank of Nigeria Ltd v Ogboh (1995) 2

Kings Law Reports (Vol. 2) (Part 28) 401 90

[1999] 9 N.B.L.R.


lviii

Union Bank of Nigeria v Salami (1998) 3 NWLR (Part 543) 538 705

Union Beverages Ltd v Adamite and Co Ltd (1990) 7 NWLR (Part 162) 348 364

United Bank for Africa Ltd v Taan (1993) 4 NWLR (Part 287) 368 90

University of Lagos v Olaniyan (1985) 1 NWLR (Part 1) 143 503

V Vaswani Co Ltd v Savalakh (1972) 12 SC 77 449

W Wema Bank Ltd v Karunwi (1975) 1 SC 15 543West African Shipping Agency (Nigeria) Ltd v

Kalla (1978) 3 SC 21–32 319Williams v Hope Rising Voluntary Fund Soci-

ety (1982) 1–2 SC 145 90

Y Yesufu v A.C.B. (1980) 1 SC 74 319Yusuf v Co-op. Bank Ltd (1994) 7 NWLR

(Part 359) 676 503

lix

INDEX OF FOREIGN CASES REFERRED TO

A Anns v Metropolitan London Borough Coun-

cil (1978) AC 728 652

B Bank of England v Vagliano Bros. (1891) AC

107 652Barclays Bank International Ltd v Levin

Brothers (Bradford) Ltd (1976) 3 All ER900 853

Berry v Halifax Commercial Banking Co(1901) 1 CH 188 694

Biss v Lambeth Health Authority (1978) 1 WLR 382 503

Bradford Old Bank Ltd v Sutcliffe (1918) 2 KB 833 503

Buchingham and Co v London and Midland Bank (1895) 12 TLR 70 694

C Cartledge v Jopling and Sons Ltd (1963) 1 All

ER 341 503

D Donoghue v Stevenson (1932) AC 562 652

E Exparte Sidebotham (1980) 14 Ch.D 458 627

F Fine Art Society v Union Bank of London

(1886–87) 17 QB 705 652

G Gordon v London City and Midland Bank Ltd

(1902) 1 KB 242 652

[1999] 9 N.B.L.R.


lx

J Jacobs v Booths Distillery Co (1901) 85 LT

262 830Joachimson v Swiss Bank Corporation (1921)

1 All ER 92; (1921) 3 KB 110 72, 694

L Ladbroke v Todd (1914) 111 LT 43 652Lloyds Bank Ltd v Margolis (1954) 1 All ER

734 72Lloyds Bank Ltd v Savory and Co (1933) AC

201 652Lochgelly Iron and Cool Company Ltd v

M’Mulian (1934) AC 1 652

M Marfani and Co Ltd v Midland Ltd (1968) 2

All ER 573 652Mckenzie v British Linen Co (1880–81) 6

App. Cas. 82 816Miliangos v Geroge Frank (Textiles) Ltd

(1975) 3 All ER 801 853

P Perestrello Companhia Limitada v United

Paint Co Ltd (1969) 1 WLR 570 816Polini v Gray (1879) 12 Ch. D 438 785Prosperity Limited v Lloyd’s Bank Limited

(1923) 39 TLR 372 694

R Ray v Newton (1913) KB 249 830Rekstin v Severo Sibisko and the Bank of Rus-

sian Trade (1933) 1 KB 47 694

S Shroeder v Accountant-General (1980) 2 All

ER 648 90Stack v Boyle 342 US 1 (1951) 716

[1999] 9 N.B.L.R.

Index of Foreign Cases referred to

lxi

T Thackwell v Barclays Bank Plc (1986) All ER

676 652The Despina R (1979) 1 All ER 421 853

W Walton v Mascall 13 M and W 458 503Watson and Son v Daily Records (1907) 1 KB

883 364

Y Young v Bristol Aeroplane Co (1944) KB 718 503

lxiii

INDEX OF NIGERIAN STATUTES REFERRED TO

African Charter on Human and Peoples’ Rights (Ratifi-cation and Enforcement) Act Cap 10 Laws of the Fed-eration of Nigeria, 1990

Article 7(1)(b) ....................... [1999] 9 N.B.L.R. 593, 716 Article 7(1)(d) ............................... [1999] 9 N.B.L.R. 593

Banking Act Cap 28 Laws of the Federation of Nigeria, 1990

s 12(2) ........................................... [1999] 9 N.B.L.R. 200 s 15................................................ [1999] 9 N.B.L.R. 705 s 43(1)(a)....................................... [1999] 9 N.B.L.R. 180

Banks and Other Financial Institutions Decree No. 25 of 1991

s 1.................................................. [1999] 9 N.B.L.R. 516 s 2.................................................. [1999] 9 N.B.L.R. 180 s 18(1) ........................................... [1999] 9 N.B.L.R. 41 s 18(1)(b)....................................... [1999] 9 N.B.L.R. 240 s 18(2) ........................................... [1999] 9 N.B.L.R. 240 s 18(3) ........................................... [1999] 9 N.B.L.R. 1 s 18(4) ........................................... [1999] 9 N.B.L.R. 1 s 18(5) ........................................... [1999] 9 N.B.L.R. 1 s 20(2) ........................................... [1999] 9 N.B.L.R. 1 s 20(6) ........................................... [1999] 9 N.B.L.R. 1 s 20(7) ........................................... [1999] 9 N.B.L.R. 1 s 38................................................ [1999] 9 N.B.L.R. 516 s 46................................................ [1999] 9 N.B.L.R. 1 s 46(a) ........................................... [1999] 9 N.B.L.R. 200 s 51................................................ [1999] 9 N.B.L.R. 180 s 61........................................ [1999] 9 N.B.L.R. 180, 400

[1999] 9 N.B.L.R.


lxiv

Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990

s 2(1) ............................................. [1999] 9 N.B.L.R. 473 s 7(3) ............................................. [1999] 9 N.B.L.R. 652 s 57................................................ [1999] 9 N.B.L.R. 473 s 71(1) ........................................... [1999] 9 N.B.L.R. 853 s 77(2) ........................................... [1999] 9 N.B.L.R. 652 s 82................................................ [1999] 9 N.B.L.R. 652

Central Bank of Nigeria Act, 1991 s 2.................................................. [1999] 9 N.B.L.R. 516

Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990

s 290.............................................. [1999] 9 N.B.L.R. 440 s 417...............................[1999] 9 N.B.L.R. 180, 335, 674 s 425.............................................. [1999] 9 N.B.L.R. 335 s 425(1) ......................................... [1999] 9 N.B.L.R. 674 s 500(1) ......................................... [1999] 9 N.B.L.R. 180 s 500(2) ......................................... [1999] 9 N.B.L.R. 180 s 501(1) ......................................... [1999] 9 N.B.L.R. 180 s 501(2) ......................................... [1999] 9 N.B.L.R. 180 s 501(3) ......................................... [1999] 9 N.B.L.R. 180 s 650.............................................. [1999] 9 N.B.L.R. 180

Constitution (Suspension and Modification) Decree No. 107 of 1993

s 1(3) ............................................. [1999] 9 N.B.L.R. 180 s 230.............................................. [1999] 9 N.B.L.R. 907 s 230(1)(d)..................................... [1999] 9 N.B.L.R. 457 s 230(1)(q)..................................... [1999] 9 N.B.L.R. 231 s 230(1)(r) ..................................... [1999] 9 N.B.L.R. 231 s 230(1)(s) ..................................... [1999] 9 N.B.L.R. 231

Constitution of the Federal Republic of Nigeria, 1979 (as amended)

s 33(12) ......................................... [1999] 9 N.B.L.R. 19

[1999] 9 N.B.L.R.

Index of Nigerian Statutes referred to

lxv

Constitution of the Federal Republic of Nigeria, 1979 (as amended) – continued

s 222(a) ................................. [1999] 9 N.B.L.R. 118, 627 s 230(1)(d)............................. [1999] 9 N.B.L.R. 180, 231 s 277.............................................. [1999] 9 N.B.L.R. 111

Constitution of the Federal Republic of Nigeria, 1999 s 35(4)(a)....................................... [1999] 9 N.B.L.R. 716 s 35(4)(b)....................................... [1999] 9 N.B.L.R. 716 s 36(5) ........................................... [1999] 9 N.B.L.R. 716 s 251(1)(d)..................................... [1999] 9 N.B.L.R. 923 s 251(1)(j)...................................... [1999] 9 N.B.L.R. 923 s 251(1)(r) ..................................... [1999] 9 N.B.L.R. 923 s 315.............................................. [1999] 9 N.B.L.R. 923

Contract Law Cap 30 Laws of Anambra State, 1986 s 738.............................................. [1999] 9 N.B.L.R. 652

Court of Appeal Act Cap 75 Laws of the Federation of Nigeria, 1990

s 16........................................ [1999] 9 N.B.L.R. 180, 816 s 29(1) ........................................... [1999] 9 N.B.L.R. 776

Criminal Code Act Cap 77 Laws of the Federation of Ni-geria, 1990

s 419A........................................... [1999] 9 N.B.L.R. 284 s 419B ........................................... [1999] 9 N.B.L.R. 284 s 435.............................................. [1999] 9 N.B.L.R. 164 s 516.............................................. [1999] 9 N.B.L.R. 164

Criminal Procedure Act Cap 80 Laws of the Federation of Nigeria, 1990

s 263(1) ......................................... [1999] 9 N.B.L.R. 90 s 263(3) ......................................... [1999] 9 N.B.L.R. 90 s 299.............................................. [1999] 9 N.B.L.R. 90 s 381.............................................. [1999] 9 N.B.L.R. 19 s 395.............................................. [1999] 9 N.B.L.R. 19

[1999] 9 N.B.L.R.


lxvi

Diplomatic Immunities and Privileges Act Cap 99 Laws of the Federation of Nigeria, 1990

generally........................................ [1999] 9 N.B.L.R. 785

Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990

s 1.................................................. [1999] 9 N.B.L.R. 284 s 1(1)(b)................................. [1999] 9 N.B.L.R. 240, 339 s 1(2)(b)......................................... [1999] 9 N.B.L.R. 339 s 2.......................................... [1999] 9 N.B.L.R. 284, 339

Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990

s 19................................................ [1999] 9 N.B.L.R. 516 s 73(1) ........................................... [1999] 9 N.B.L.R. 393 s 74(1)(a)....................................... [1999] 9 N.B.L.R. 516 s 74(1)(b)....................................... [1999] 9 N.B.L.R. 516 s 132.............................................. [1999] 9 N.B.L.R. 543 s 132(1) ......................................... [1999] 9 N.B.L.R. 873 s 136.............................................. [1999] 9 N.B.L.R. 705 s 137(1) ......................................... [1999] 9 N.B.L.R. 516 s 137(2) ......................................... [1999] 9 N.B.L.R. 516 s 138(3) ......................................... [1999] 9 N.B.L.R. 125

Exchange Control (Anti-Sabotage) Act Cap 114 Laws of the Federation of Nigeria, 1990

s 1(1)(a)......................................... [1999] 9 N.B.L.R. 19 s 1(1)(g)......................................... [1999] 9 N.B.L.R. 19 s 1(1)(h)......................................... [1999] 9 N.B.L.R. 19 s 2(1)(a)......................................... [1999] 9 N.B.L.R. 19

Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Decree No. 18 of 1994 (as amended)

s 1(5) ...................... [1999] 9 N.B.L.R. 380, 465, 593, 618 s 1(6) ..................................... [1999] 9 N.B.L.R. 593, 618 s 3(1)(a)......................................... [1999] 9 N.B.L.R. 400 s 3(1)(b)......................................... [1999] 9 N.B.L.R. 19

[1999] 9 N.B.L.R.


lxvii

Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Decree No. 18 of 1994 (as amended) – continued

s 3(1)(c)................................... [1999] 9 N.B.L.R. 19, 164 s 3(1)(d)................................... [1999] 9 N.B.L.R. 19, 339 s 3(2) ............................................. [1999] 9 N.B.L.R. 618 s 3(3)(c)......................................... [1999] 9 N.B.L.R. 618 s 4(1) ..............................[1999] 9 N.B.L.R. 111, 118, 465 s 4(2) ..................................... [1999] 9 N.B.L.R. 465, 593 s 5.................................................. [1999] 9 N.B.L.R. 776 s 5(1) ...................... [1999] 9 N.B.L.R. 111, 118, 449, 593 s 9.................................................. [1999] 9 N.B.L.R. 400 s 11................................................ [1999] 9 N.B.L.R. 440 s 15(7) ........................................... [1999] 9 N.B.L.R. 440 s 19(1) ................................... [1999] 9 N.B.L.R. 125, 284 s 20................................................ [1999] 9 N.B.L.R. 894 s 20(1)(a)............................... [1999] 9 N.B.L.R. 164, 339 s 20(5) ........................................... [1999] 9 N.B.L.R. 19 s 23(3) ........................................... [1999] 9 N.B.L.R. 19 s 23(4) ........................................... [1999] 9 N.B.L.R. 164 s 26.......................................... [1999] 9 N.B.L.R. 90, 593 s 26(1)(a)....................................... [1999] 9 N.B.L.R. 716 s 26(1)(b)....................................... [1999] 9 N.B.L.R. 716 s 27(2) ........................................... [1999] 9 N.B.L.R. 164 s 29.................................[1999] 9 N.B.L.R. 180, 400, 923 Schedule 1 paragraph 5(1)(a)......... [1999] 9 N.B.L.R. 364 Schedule 1 paragraph 5(1)(b)......... [1999] 9 N.B.L.R. 364 Schedule 1 paragraph 5(1)(c)......... [1999] 9 N.B.L.R. 364 Schedule 1 paragraph 6(1) .............. [1999] 9 N.B.L.R 364 Schedule 1 paragraph 6(2) .............. [1999] 9 N.B.L.R 364 Schedule 1 paragraph 6(3) .............. [1999] 9 N.B.L.R 364 Schedule 1 paragraph 8................... [1999] 9 N.B.L.R 364 Schedule 1 paragraph 25(3) ............ [1999] 9 N.B.L.R 364 Schedule 1 paragraph 27................. [1999] 9 N.B.L.R 364

[1999] 9 N.B.L.R.


lxviii

Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks (Amendment) Decree No. 18 of 1995

s 7............................................ [1999] 9 N.B.L.R. 79, 180

Federal High Court Act, 1973 s 7.......................................... [1999] 9 N.B.L.R. 907, 923

Federal Mortgage Bank of Nigeria Decree No. 82 of 1993 s 5(1)(a)......................................... [1999] 9 N.B.L.R. 180 s 6(1)(a)......................................... [1999] 9 N.B.L.R. 180 s 6(1)(b)......................................... [1999] 9 N.B.L.R. 180

Foreign Exchange (Monitoring and Miscellaneous Provi-sions) Decree No. 17 of 1995

s 38(1) ........................................... [1999] 9 N.B.L.R. 19 s 38(2) ........................................... [1999] 9 N.B.L.R. 19

Interpretation Act Cap 192 Laws of the Federation of Nigeria, 1990

s 6(1)(d)......................................... [1999] 9 N.B.L.R. 19 s 6(1)(e)......................................... [1999] 9 N.B.L.R. 19

Land Use Act Cap 202 Laws of the Federation of Nige-ria, 1990

generally........................................ [1999] 9 N.B.L.R. 543

Limitation Law Cap 70 Laws of Lagos, 1973 s 8(1)(a)......................................... [1999] 9 N.B.L.R. 503

Nigeria Deposit Insurance Corporation Act Cap 301 Laws of the Federation of Nigeria, 1990

s 4(h) ............................................. [1999] 9 N.B.L.R. 79 s 5(1)(a)......................................... [1999] 9 N.B.L.R. 79 s 15(1)(a)....................................... [1999] 9 N.B.L.R. 79 s 15(1)(b)....................................... [1999] 9 N.B.L.R. 79 s 15(1)(c)....................................... [1999] 9 N.B.L.R. 79

[1999] 9 N.B.L.R.


lxix

Nigeria Deposit Insurance Corporation Amendment De-cree No. 5 of 1997

s 23(D)(1)...................................... [1999] 9 N.B.L.R. 335

Recovery of Public Property (Special Military Tribunals) Act Cap 389 Laws of the Federation of Nigeria, 1990

s 18(1) ........................................... [1999] 9 N.B.L.R. 449 s 18(2) ........................................... [1999] 9 N.B.L.R. 449

Securities and Exchange Commission Act Cap 406 Laws of the Federation of Nigeria, 1990

s 7(1) ............................................. [1999] 9 N.B.L.R. 728

Torts Law Cap 135 Laws of Anambra State, 1986 s 217.............................................. [1999] 9 N.B.L.R. 652 s 218.............................................. [1999] 9 N.B.L.R. 652 s 219.............................................. [1999] 9 N.B.L.R. 652 s 224.............................................. [1999] 9 N.B.L.R. 652 s 225.............................................. [1999] 9 N.B.L.R. 652

Tribunals (Certain Consequential Amendments etc.) De-cree No. 62 of 1999

s 2(1) ............................................. [1999] 9 N.B.L.R. 923 s 2(3) ..................................... [1999] 9 N.B.L.R. 766, 923 s 2(4) ............................................. [1999] 9 N.B.L.R. 776 s 3(1) ............................................. [1999] 9 N.B.L.R. 766 s 3(2) ............................................. [1999] 9 N.B.L.R. 923

lxxi

INDEX OF NIGERIAN RULES OF COURT REFERRED TO

Court of Appeal Rules, 1981 (as amended) – Order 3 rule 3(4)......................... [1999] 9 N.B.L.R. 785 – Order 3 rule 15 ........................... [1999] 9 N.B.L.R. 561

Court of Appeal Rules Cap 62 Laws of the Federation of Nigeria, 1990

– Order 3 rule 2(1)......................... [1999] 9 N.B.L.R. 180 – Order 3 rule 2(2)......................... [1999] 9 N.B.L.R. 180 – Order 3 rule 2(3)......................... [1999] 9 N.B.L.R. 180 – Order 3 rule 22 ........................... [1999] 9 N.B.L.R. 180

Federal High Court (Civil Procedure) Rules – Order 45 rule 7 ............................ [1999] 9 N.B.L.R 400

High Court of Lagos State (Civil Procedures) Rules, 1972 – Order 10 rules 1–2....................... [1999] 9 N.B.L.R 830

Supreme Court Rules – Order 8 rule 2(3).......................... [1999] 9 N.B.L.R 694

lxxiii

INDEX OF BOOKS REFERRED TO

Adekanye Femi: Elements of Banking in Nigeria (3ed) page 245, paras 14–19 .................... [1999] 9 N.B.L.R 796

Black’s Law Dictionary (6ed) generally......................................... [1999] 9 N.B.L.R 240

Chitty on Contract pages 345–346................................ [1999] 9 N.B.L.R 796

Chitty on Contracts (24ed) page 811, para 1105........................ [1999] 9 N.B.L.R 503

Criminal Procedure of the Southern States of Nigeria (1ed) by Fidelis Nwadialo

chapter 20 para B, pages 148-149 .. [1999] 9 N.B.L.R 90

Gatley on Libel and Slander (7ed) generally......................................... [1999] 9 N.B.L.R 543 Article 221, page 103 ..................... [1999] 9 N.B.L.R 319

Law of Banking by Lord Chorley (6ed) page 349......................................... [1999] 9 N.B.L.R 694

Leading Cases in the Law of Banking by Chorley and Smart (4ed)

page 304......................................... [1999] 9 N.B.L.R 694

Paget’s Law of Banking (8ed) page 82........................................... [1999] 9 N.B.L.R 503

Paget’s Law of Banking (10ed) page 159......................................... [1999] 9 N.B.L.R 400

Paget’s Law of Banking (19ed) generally......................................... [1999] 9 N.B.L.R 652

[1999] 9 N.B.L.R.


lxxiv

The Law and Practice of Banking by J. Milnes Vol 1, (4ed)

generally......................................... [1999] 9 N.B.L.R 652

[1999] 9 N.B.L.R. (SPECIAL APPEAL TRIBUNAL, LAGOS)

Chief Z.M. Abule v. Federal Republic of Nigeria 1

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Chief (Dr) Z.M. Abule v Federal Republic of Nigeria

SPECIAL AP TRIBUNAL, LAGOS COKER, J, AJAYI-OBE S.A.N. Date of Judgment: 7 JANUARY, 1999 Suit No.: SAT/FBT/374/97

Banking – Offences pursuant to section 18(3) Banks and Other Financial Institutions Decree No. 25 of 1991 – Ac-cused holding more than 5% shares in company receiving loan, advance or credit facility – Evidence of shareholding simpliciter by accused – Whether justifies conclusion that he has “personal interest” in any advance loan or credit facility granted Banking – Offences pursuant to section 18(3) Banks and Other Financial Institutions Decree No. 25 of 1991 – What prosecution must prove – What qualifies as “personal inter-est” therein – Duty of prosecution – Conduct of the accused and surrounding circumstances – Relevance of Criminal law and procedure – Criminal charge predicated on contravention of section 20(2) Banks and Other Financial Institutions Decree No. 25 of 1991 – Complaint against prosecution of one single director/minority shareholder under section 46(a) Banks and Other Financial Institutions Decree No. 25 of 1991 – Relevant consideration thereof – Bank not a party – Propriety of proceedings constituted thereof Facts The appellant was the founder and chairman of Crystal Bank of Africa Limited. He was also the founder and chairman of some related companies, namely Rivway Lines Limited, Delmarine Services Limited, Sample Shipping Lines, Pat-leon Limited, Peobet Investments Limited and Habok Indus-tries (Nigeria) Limited. Each of these companies operates several accounts at a number of branches of the Crystal Bank of Africa Limited. As at July, 1995 the Central Bank of Nigeria by letter dated 31 July, 1995 drew the attention of the appellant to his fourteen delinquent alleged accounts


2 Nigerian Banking Law Reports [1999] 9 N.B.L.R.

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which according to the letter were in violation of the provi-sions of Banks and Other Financial Institutions Decree (“BOFID”) Decree No. 25 of 1991. The Nigeria Deposit In-surance Corporation (“NDIC”) carried out a routine examina-tion of Crystal Bank sometime in 1994, and subsequent to the aforesaid CBN letter carried another special investigation of Crystal Bank of Africa Limited with a view to ascertain the level of indebtedness of the appellant/chairman and regularity or otherwise of the credit facilities granted to related compa-nies of the appellant amongst other things. At the end of the investigation, report of findings of the examiners were sub-mitted to NDIC and the outcome of the report precipitated the arrest and subsequent arraignment of the appellant on a 13 count charge of financial malpractices in the said Crystal Bank of Africa Limited before the Kano Zone 1 of the Failed Banks Tribunal. In his judgment the learned Chairman classi-fied the 13 counts under two categories, the first category re-lated to Counts 1, 2, 3, 4, 5, 6, 7 and 12 of the offence of fail-ure of the accused person as Chairman of Board of Directors of Crystal Bank of Africa Limited to declare his personal in-terest in the loan or advance allowed by the Bank (“CBAL”) to the related companies of the appellant named above. The second category relating to Counts 5, 9, 10 and 13 were of-fences contrary to section 20(2)(a)(i) and (ii) of BOFID for failure to take all reasonable steps to secure compliance by the Bank with the provisions of BOFID.

In his judgment, the Chairman carefully reviewed the evi-dence of each witness and examined the relevant provisions of BOFID and finally found the appellant guilty of 9 (nine) Counts namely, 1st, 2nd, 3rd, 5th, 6th, 7th, 8th, 10th and 12th. He further held that the prosecution failed to establish one of the elements in each counts 4th, 9th, 11th and 12th and accordingly discharged him on those counts.

The appellant being dissatisfied with the above judgment appealed to the Special Appeal Tribunal and it was contended on his behalf that the prosecution could not rely on the presumption that the appellant had personal interest in the facilities allowed by the Bank based on the percentage of shares held by him in each of the borrowing companies as the



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appellant’s shareholding in each of the companies was less than 5% of the aggregate shareholding amongst other argu-ments. Held – 1. The duty to or not to prosecute any alleged offender

whether such offence has been jointly or severally com-mitted by more than one offender is the duty of the person whose duty it is to prosecute. Similarly, it is the duty of that person to decide what charge and evidence to proffer if the offence could be proved under one or more laws. Before making a decision, several factors would invaria-bly have to be considered. In this particular case it will not be just and fair to prosecute the other directors when on the evidence the principal offender was the appellant who established the bank and several different private companies which he used unmindful of the tragic conse-quences, and one single director/minority-shareholder can be prosecuted successfully under section 46(a) of BOFID without necessarily joining the Bank.

2. Section 18(3) of BOFID requires the prosecution to prove that an accused charged in pursuance thereof has “personal interest” in an advance loan or credit facility.

3. The fact that an accused person holds shares in a com-pany may or may not justify the conclusion that he had “personal interest in the company” and that fact alone cannot invariably justify the conclusion that he has a “personal interest in any advance, loan or credit facility” received by such company. In the instant case, however the facts and circumstances of the case showed clearly as found by the learned trial Chairman that appellant had interest in the credit facilities granted appellant related companies. The personal interest of the appellant in each case was not based on the fact or percentage of shares held by appellant in any of the said companies, but on personal use and control over the funds made available to each of the companies by the Bank (“CBAL”).

4. In determining whether an accused has personal interest in a loan, advance, etc under section 18(3) of BOFID it



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is not sufficient to confine examination to specific dec-larations made by the accused pursuant to CAMA or form CO2 signed by the accused, the conduct of the ac-cused and surrounding circumstances must also be taken into consideration.

5. In coming to a decision that the appellant had personal interest in the loans disbursed by CBAL to each of the companies run by the appellant the Lower Tribunal did not base its decision on percentage of shares held by the appellant in any of the companies. The question of pre-sumption of director’s interest based solely on the per-centage of 5% shares held by the appellant in any of the related companies does not therefore arise in the appeal.

6. To secure a conviction under section 18(3) of Banks and Other Financial Institutions Decree No. 25 of 1991 the prosecution must prove:–

(i) That the accused was at the material time (ie at the time when the loan was granted) a director of the Bank (“CBAL”).

(ii) That the interest of the accused was a personal one, whether directly or indirectly.

(iii) That he (accused) has failed to declare the nature of his interest.

Appeal dismissed.

Nigerian statute referred to in the judgment Banks and Other Financial Institutions Decree No. 25 of 1991, sections 18(3), (4), (5); 20(2), (6), (7) and 46

Counsel For the appellant: Chief FRA Williams, S.A.N. (with him A Oru and Hakeem Shittu) For the respondent: Alhaji Aliyu Umar

Judgment COKER J: The appellant in this appeal, Chief (Dr) ZM Abule, was the Founder and Chairman of Crystal Bank of


Coker J


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Africa Limited. He was also Founder and Chairman of some related companies, namely Rivway Lines Limited, Del-marine Services Limited, Sample Shipping Lines, Patleon Limited, Peobet Investments Limited and Habok Industries (Nigeria) Limited. Each of these companies operates several accounts at a number of branches and obtained credit facili-ties which were not secured at a number of the branches of the Crystal Bank of Africa Limited. As at July, 1995, the Central Bank of Nigeria by letter dated 31 July, 1995, drew the attention of Chief (Dr) Zebulon M Abule, the appellant, to his fourteen delinquent alleged accounts, which, accord-ing to the letter, were in violation of the provisions of Banks and Other Financial Institutions Decree (“BOFID”) Decree No. 25 of 1991 and the Nigeria Deposit Insurance Corpora-tion called for a special investigation of Crystal Bank of Af-rica Limited. A team of NDIC officials led by Mrs VU Ikuwe, a Deputy Examiner in the Field Examination De-partment, carried out the NDIC Investigation of the Bank (“CBAL”) with view to:– “(i) Ascertaining:– (a) the level of indebtedness of the Chairman (that is ap-

pellant); (b) whether such credits were properly approved; and (ii) Retrieving evidence of approval/cheque and disbursements

in connection with them.”

And at the end of the examination, the team submitted the Report of its findings. The Report was produced in evidence by PW3, Mrs Ikuwe, the leader of the investigation team. Prior to the Special Investigation, the NDIC carried out a Routine Examination of Crystal Bank of Africa Limited. This was sometime in 1994. The examination covered the Head Office and Branches at Victoria Island, Balogun, Idumota, Apapa, Nnewi, Port-Harcourt, Ikeja and focus on all the bank’s operational activities. The report was also produced at the trial of the appellant.

What followed was the arrest of the appellant on or about 10 August, 1995 and subsequent arraignment on a thirteen count charge on 18 February, 1996 before the Failed Banks


Coker J


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(Recovery of Debts) and Financial Malpractices in Banks Tribunal, Kano Zone, for offences under provisions of sec-tions 18(3), 20(2)(a)(i) and (ii) and 46 of Banks and Other Financial Institutions Decree No. 25 of 1991 (otherwise known as “BOFID”). The nine counts on which he was sub-sequently convicted and sentenced read as follows:–

“The First Head of Charge:–

That you Chief (Dr) ZM Abule of No. 2 Lisabi Street, Apapa, La-gos between August, 1991 and August, 1995 while being a Direc-tor of Crystal Bank of Africa Ltd and having a personal interest in credit facilities amounting to N213,677,596.22k (including bank interest) granted by the said Crystal Bank of Africa Ltd to RIVWAY LINES, failed to declare the nature of your said interest to the Board of Directors of Crystal Bank of Africa Ltd and that you thereby committed an offence contrary to section 18(3) of Banks and Other Financial Institutions Decree No. 25 of 1991 and punishable under section 18(9) of the same Decree.”

“The Second Head of Charge:–

That you Chief (Dr) ZM Abule of No. 2 Lisabi Street, Apapa, La-gos between September, 1992 and August, 1995, at Lagos, while being a Director of Crystal Bank of Africa Ltd and having a per-sonal interest in credit facilities amounting to N20,109,650.71k including Bank interest, granted by the said Crystal Bank of Af-rica Ltd to Sample Shipping Agency Limited, failed to declare the nature of your said interest to the Board of Directors of Crystal Bank of Africa Limited and that, you thereby committed an of-fence contrary to section 18(3) of Banks and Other Financial Insti-tutions Decree No. 25 of 1991 and punishable under section 18(9) of the same Decree.”

“The Third Head of Charge:–

That you Chief (Dr) ZM Abule of No. 2 Lisabi Street, Apapa, La-gos between September, 1991 and August, 1995, at Lagos, while being a Director of Crystal Bank of Africa Limited, and having a personal interest in credit facilities amounting to N23,061,697.49k (including bank interest) granted by the said Crystal Bank of Af-rica Limited to Delmarine Nigeria Limited failed to declare the nature of your said interest to the Board of Directors of Crystal Bank of Africa Limited and that you thereby committed an of-fence contrary to section 18(3) of Banks and Other Financial Insti-tutions Decree No. 25 of 1991, and punishable under section 18(3) of the same Decree.”


Coker J


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“The Fifth Head of Charge:– That you Chief (Dr) ZM Abule of No. 2 Lisabi Street, Apapa, La-gos between September, 1991 and 9 August, 1995 at Lagos, while being a Director of Crystal Bank of Africa Limited, and having a personal interest in credit facilities amounting to N8,405,571.85k (including bank interest) granted by the said Crystal Bank of Af-rica Limited to Peobet Investment, failed to declare the nature of your said interest to the Board of Directors of Crystal Bank of Af-rica Limited and that you thereby committed an offence contrary to section 18(3) of Banks and Other Financial Institutions Decree No. 25 of 1991 and punishable under section 18(9) of the same Decree.” “The Sixth Head of Charge:– That you (Dr) ZM Abule of No. 2 Lisabi Street, Apapa, Lagos, be-tween November 3, 1994 and August, 1995 at Port-Harcourt, while being a Director of Crystal Bank of Africa Limited, and hav-ing a personal interest in credit facilities amounting to N27,649,616.01k (including bank interest) granted by the said Crystal Bank of Africa Limited to the Patleon Associates, failed to declare the nature of your said interest to the Board of Directors of Crystal Bank of Africa Limited and that, you thereby committed an offence contrary to section 18(3) of Banks and other Financial Institutions Decree No. 25 of 1991, and punishable under section 18(9) of the same Decree.” “The Seventh Head of Charge:– That you Chief (Dr) ZM Abule of No. 2 Lisabi Street, Apapa, La-gos between September, 1991 and August, 1995 at Lagos, while being a Director of Crystal Bank of Africa Limited and having a personal interest in credit facilities amounting to N10,573,597.87k (including bank interest) granted by the said Crystal Bank of Af-rica Limited to Habok Industries, failed to declare the nature of your said interest to the Board of Directors of Crystal Bank of Af-rica Limited and that, you thereby committed an offence contrary to section 18(3) of Banks and other Financial Institutions Decree No. 25 of 1991, and punishable under section 18(9) of the same Decree.” “The Eighth Head of Charge:– That you Chief (Dr) ZM Abule of No. 2 Lisabi Street, Apapa, La-gos, between the months of August, 1991 and 9 August, 1995, at Lagos, while being a Director and Chairman of the Board of Di-rectors of Crystal Bank of Africa Limited, failed to take all rea-sonable steps to secure compliance by the said bank with the pro-vision of section 20(2)(a)(c) and (iv) of the Banks and other


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Financial Institutions Decree No. 25 of 1991, in that Crystal Bank of Africa Limited, without prior written approval of the Central Bank of Nigeria permitted to be outstanding, unsecured advances and credit facilities of an aggregate amount in excess of N50,000 to wit the sum of N213,677,596.22k advance to Rivway Lines, an association in which you are a Director, and that you thereby com-mitted an offence punishable under section 46 of the Banks and other Financial Institutions Decree No. 25 of 1991.” “The Tenth Head of Charge:– That you Chief (Dr) ZM Abule of No. 2 Lisabi Street, Apapa, La-gos, between September, 1991 and August, 1995 at Lagos, while being a Director and Chairman of the Board of Directors of Crys-tal Bank of Africa Limited, failed to take all reasonable steps to secure compliance by the said bank with the provision of section 20(2)(a)(i) and (ii) of the Banks and other Financial Institutions Decree No. 25 of 1991, in that Crystal Bank of Africa Limited, without prior written approval of the Central Bank of Nigeria, permitted to be outstanding, unsecured advances and credit facili-ties of an aggregate amount in excess of N50,000 to wit the sum of N23,061,697.49k advances granted to Delmarine Nigeria Lim-ited, a company in which you are a Director, and thereby commit-ted an offence punishable under section 46 of the Banks and other Financial Institutions Decree No. 25 of 1991.” “The Twelfth Head of Charge:– That you Chief (Dr) ZM Abule of No. 2 Lisabi Street, Apapa, La-gos, between August, 1992 and August, 1995 while being a Direc-tor of Crystal Bank of Africa Limited, and having a personal in-terest in credit facilities amounting to N21,605,656.87k (including bank interest) granted by the said Crystal Bank of Africa Limited to Blessed Ultimate Ltd, failed to declare the nature of your said interest to the Board of Crystal Bank of Africa Limited and that, you thereby committed an offence contrary to section 18(3) of Banks and other Financial Institutions Decree No. 25 of 1991, and punishable under section 18(9) of the same Decree.”

At the end of the trial, during which the prosecution called seven witnesses and the defence called four, including the appellant himself, several documentary exhibits were re-ceived in evidence. In his judgment, the Chairman carefully reviewed the evidence of each witness and examined the rele-vant provisions of BOFID and finally found appellant guilty of 9 (nine) Counts, namely, 1st, 2nd, 3rd, 5th, 6th, 7th, 8th, 10th and 12th. He held that the prosecution failed to establish


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one of the elements in each of Counts 4th, 9th, 11th and 12th and accordingly discharged him on those counts.

It is against the conviction of the nine Counts (1st, 2nd, 3rd, 5th, 6th, 7th, 8th, 10th and 12th) that this appeal is con-cerned.

In his judgment, the learned Chairman classified the 13 Counts under two categories, the first category relates to Counts 1, 2, 3, 4, 5, 6, 7 and 12 of the offence of failure of the accused person as Chairman of Board of Directors of Crystal Bank of Africa Limited to declare his personal inter-est in the loan or advance allowed by Crystal Bank of Africa Limited (“CBAL”) to each of the various companies named in the respective charges, namely:– (1) Rivway Lines Limited; (2) Sample Shipping Agency Limited; (3) Delmarine Nigeria Limited; (4) Peobet Investment Limited; (5) Patleon Associates; (6) Habok Industries; and (7) Blessed Ultimate Limited. The second category relating to Counts 5, 9, 10 and 13 were offences contrary to section 20(2)(a)(i) and (ii) of BOFID for failure to take all reasonable steps to secure compliance by the Bank with the provisions of BOFID.

The learned Chairman examined section 18(3) of BOFID relevant to Counts 1, 2, 3, 4, 5, 6, 7 and 12. He also exam-ined sections 20(2)(a)(i) and (ii) and 46 BOFID relating to Counts 8, 9, 10 and 13. For proof of an offence under sec-tion 18(3) the learned Chairman stated that the prosecution must establish three elements namely:– (1) The accused was a Director of the Bank at the mate-

rial time the loan was granted. (2) That the interest of the accused was a personal one,

whether directly or indirectly.


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(3) That the accused failed to declare the nature of his interest to the Board of Directors of the Bank.

Chief Williams, S.A.N. adopted appellant’s brief and in his oral submission strenuously argued that the prosecution can-not rely on the presumption that the appellant has personal interest in the facilities allowed by the Bank based on the percentage of shares held by him in each of the borrower companies as the appellant’s shareholding in each of the companies is less than 5% of the aggregate shareholding. It is clear that the Tribunal did not base its decision on per-centage of shares held by the appellant in any of these com-panies. The Tribunal found that the appellant had personal interest in the loan or funds granted by the bank and other facts found by the Tribunal. We are satisfied that on the evi-dence and his interpretation of the provision of section 18(3) of what Chief Williams, S.A.N. described as the “second element of the offence”. We agree with this submission that what the enactment required the prosecution to prove is the “personal interest” of the accused “in an advance, loan or credit facility”. And that was what the learned Chairman held constituted the interest of the appellant in the credit fa-cilities which each of the related companies received from CBAL. We are satisfied that the question of presumption of director’s interest based solely on the percentage of 5% shares by him to any of the related companies does not arise in the present case.

Learned Counsel contended on behalf of the appellant that a director of the borrower company can never have a per-sonal interest in any advance, loan or credit facility by rea-son only that he is a Director. Rightly, it has been the con-tention also that “the fact that he is a Director, put him in a fiduciary position vis-à-vis the borrower company”. We are unable however to see the relevance of this argument or how such argument can be of assistance to the appellant.

This case is concerned with the interest of the appellant as the Chairman and Director of CBAL in obtaining the unse-cured facilities granted to private companies owned by ap-pellant under conditions and circumstances which were


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repugnant to the spirit and letters of BOFID (Decree No. 25 of 1991) and the Failed Banks Decree No. 18 of 1994. The learned Chairman of the Tribunal below stated:–

“The second ingredient of section 18(3) of BOFID which require proof that the interest of the accused in the facility or loan was a personal one whether directly or indirectly. The contention of the leading Defence Counsel is that the prosecution had failed to prove that the accused has less than 5% of the aggregate shares in any of the companies stated in Charges 1, 2, 3, 4, 5, 6, 7, and 12. To my mind, in determining whether or not the accused has per-sonal interest, it is not sufficient to confine our examination to the specific declaration (ie exhibits YY3–YY5 – Form CO2 pursuant to section 129 Companies and Allied Matters Decree, 1990) made by the accused; on the contrary, the conduct of the accused and surrounding circumstances must also be taken into consideration. In the light of this, let me examine each of the remaining charges under section 18(3) of BOFID and see whether the second ingredi-ent of the offence has been established. This, the Chairman did.”

The Chairman did not rely on ownership of 5% of the ag-gregate shareholding of the appellant in any of these compa-nies having regard to the strong substantial interest which the prosecution have by evidence shown that the accused had in all the companies mentioned in Charge 1, 2, 3, 5, 6, 7 and 12.

The learned Chairman accepted and believed the evidence of PW3 Ikuwe and the Report, Exhibit UU which on pages 1 to 3 stated:–

“The investigation involved a review of the Bank’s credit portfolio with the aim of establishing all the credits relating to the Chair-man. It was discovered that he had in the past operated several ac-counts at a number of branches of the Bank. However, as at the time of this report, all the debit balances outstanding in the various accounts had been consolidated into 14 accounts. This report is based on the findings on these 14 overdrawn accounts which had an outstanding debit balance of N332,095,565 as at 31 July, 1995 and listed as Appendix 1. The Bank could not provide any credit files in respect of the facili-ties apart from four apparently hastily assembled and scanty files. These could not provide sufficient information as to the terms and conditions under which all the facilities were granted. Neverthe-less, through the statement of accounts given by the Bank, and the evidence of withdrawals retrieved, it was established that he


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owned and operated every account personally except Habok Ind. Nigeria Limited. This was being operated by a Mr B Teitei while he was listed as the Chairman of the company. Most withdrawals on the other accounts had his signature and, or instructions on them. However, the nature of the transactions (withdrawals) shown on the statement of accounts did not reflect the existence of properly struc-tured facilities. The credits were not properly granted according to the procedures laid down by the Bank’s Credit Policy. There were no applications for the facilities, no offer and acceptance letters, and the general conditions precedent to draw down were not adhered to. Moreover, no security was taken for the facilities. The Chairman’s financial obligations irrespective of their nature were being met by the Bank whether or not his accounts were funded. The accounts under review were all characterised by nu-merous cash and cheque withdrawals of varying magnitude, as well as cash disbursements to various people. Some of the large debits on these accounts were in respect of FX, which he pur-chased, without Naira cover. Besides, large numbers of internal cash transfers were observed between his accounts even though some of them which were debited had no funds. A review of the individual accounts showed that two (2) of the de-linquent accounts namely Rivway Lines Ltd, and Sample Ship-ping were said to be term loans set up since January, 1993. They were without any stated terms and conditions. No repayment had been made on either of the accounts since inception. The report gave details of each of these accounts.”

PW4, Emmanuel Chisor Wabili, was Assistant General Manager of Crystal Bank of Africa Limited, from 1990 to July, 1995. He testified that he did not approve any of facili-ties shown in column 1 of Exhibit BB, even though his name appeared on accounts I, K, M, N, O as an approving officer. Disbursement had been made at the branches and when returns came via inspection reports, it was agreed by the Management of CBAL that it will be scandalous to prosecute our Chairman who owns these accounts, that Chairman is now the accused person before this Tribunal. We (ie the Management) had meeting with the accused and it was agreed that we should package these loans properly with adequate security, forward to the Board for approval and report to the regulatory authorities. So credit memos were put in place.


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“I was present at the meeting in which the decision was arrived at and the Chairman (ie the accused) did not contest the names of the account as his own in this document. Also, the debit balances in those accounts were not disputed by the accused at the time of the management meeting with him”. Exhibit BB, shows the names of the debtor companies to Crystal Bank of Africa Limited were:– (1) Rivway Shipping Agency Limited; (2) Sample Shipping Agency Limited; (3) Delmarine Nigeria Limited; (4) Habok Industries Limited; (5) Peobet Investment Limited; (6) Patleon Associates; and (7) Blessed Ultimate Limited. It is necessary to keep in focus the sections of BOFID rele-vant to this appeal namely, sections 18 subsection (3), (4) and (5), 20(2)(a)(i) and (ii) of Banks and Other Financial Institutions Decree No. 25 of 1991 which read as follows:– “18(3) Every Director of a Bank who has any personal interest,

whether directly or indirectly, in an advance, loan or credit facility or proposed advance, loan or credit facil-ity from that bank, shall, as soon as practicable, declare the nature of his interest to the Board of Directors of the Bank, and the Secretary of the Bank shall cause such declaration to be circulated forthwith to all directors.”

“18(4) The provisions of subsection (3) of this section shall not apply in any case:–

(a) where the interest of the Director consists only of being a member holding less than five percent of the shares of a Company which is seeking an ad-vance, loan and credit facility from the Bank; or

(b) if the interest of the Director may properly be re-garded by the bank as not being material.” (Italics ours.)

“18(5) For the purpose of subsection (3) of this section, a gen-eral notice given to the Board of Directors of a bank by a Director of such bank to the effect that he is:–

(a) an officer or member holding five percent or more of the shares of a company or firm specified in the notice; and


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(b) to be regarded as having personal interest in any advance, loan or credit facility which may after the date of the notice, he made to that company or firm,

(i) the notice specifies the nature and extent of his interest in the company or firm;

(ii) the interest is not different in nature to or greater in extent than the nature and extent specified in the notice at the time the ad-vance, loan or credit facility is made; and

(iii) the notice is given at the meeting of the Board of Directors or the Director takes rea-sonable steps to ensure that it is brought up and read at the next meeting of the Board of Directors after it is given.”

“20(2) A bank shall not, without the prior approval in writing of the Bank:–

(a) permit to be outstanding, unsecured advances or loans or unsecured credit facilities, of an aggre-gate amount in excess of N50,000:–

(i) to its Directors or any of them whether such advances, loans or credit facilities, are ob-tained by its Directors jointly or severally;

(ii) to any firm, partnership or private company in which it or any one or more of its Direc-tors is interested as Director, partner, man-ager or agent, or any individual, firm, part-nership or private company of which any of its Directors is a guarantor;

(iii) to any public company or private company in which it or any one or more of its Direc-tors jointly or severally maintains sharehold-ing of not less than five percent either di-rectly or indirectly.”

As stated earlier in this judgment, the learned Chairman held the view:–

“An offence under the provisions of section 18(3), the prosecution must prove three elements, namely:–

(1) That the accused was at the material time (ie at the time when the loan was granted) a Director of the Bank (CBAL);


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(2) That the interest of the accused was a personal one, whether directly or indirectly;

(3) That he (accused) has failed to declare the nature of his in-terest.”

The gravamen of this appeal on the conviction of appellant on Counts 1, 2, 3, 5, 6, 7 and 12, is the second element of the offence, which Chief Williams, in the appellant’s Brief stated could be more correctly put in the following ways, “The interest of the accused in the advance, loan or credit facility was a personal one, whether directly or indirectly”.

The Tribunal found that the prosecution proved the three elements in each of the counts. The appellant’s Brief, which the learned Counsel adopted at the hearing, on this issue stated, “What the enactment requires the prosecution to prove” is the “personal interest” of the accused in the ad-vance, loan or credit facility. With this, we are in agreement. And that was precisely what the prosecution set out to prove and did prove. We are unable however, to follow the argu-ment that, “That is not exactly the same thing as the “per-sonal interest of the accused in the company which received the advance, loan or credit facility”.

The fact that the accused person holds shares in a company may or may not justify the conclusion that he has “personal interest in the company”. We agree that that fact alone can-not invariably justify this conclusion that he has a personal interest in any “advance, loan or credit facility” received by such company. Subsection 4(a) stipulates that if the interest of the Director consists of only being a member holding less than five percent of the shares of a company which is seek-ing an advance, loan or credit facility from the bank, that alone will not be presumed to be sufficient to establish inter-est within the provision of section 18(3). But the fact that he has more than five percent share holding would lead to the inference that the bank Director has personal interest in the loan, advance or credit facility granted to that company.

Our disagreement with the appellant’s contention is that the facts and other circumstances of the case show clearly as the learned Chairman found, that appellant has interest in the


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credit facilities granted appellant’s related companies named earlier in this judgment. The personal interest of the appellant in each case was not based on the fact or percentage of shares held by appellant in any of the said companies, but on per-sonal use and control over the funds made available to each of the companies by the Bank (CBAL). The appellant has made a feeble attempt to attack the findings of the third PW, Mrs Ekuwe in the Report Exhibit UU particularly pages 1–3.

PW7, whom the Tribunal believed, testified:– “I agree with the examiner’s statement at page 17 of Exhibit UU concerning false returns to the regulatory authorities because what was being done in the bank (CBAL) up to and including 30 June, 1995, the credits due from the accused and his related parties were being collapsed against the deposit of the bank. That is, at the end of month, all the debits from the accused and his related parties were reduced to zero by cancelling them against . . .”

We are of the view that the Tribunal is right on the evidence and its interpretation of the relevant provisions of BOFID.

The appellant was convicted on counts 8 and 10 on alleged contravention of the provisions of section 20(2)(a)(i) and (ii) and section 46 of BOFID. Learned Counsel for appellant after observing that the obligation for observance of the rule laid down equally on the bank as a corporate entity, but that the charges in the instant case were not directed against the bank which alone committed a contravention but were di-rected against the appellant pursuant to section 46(a) of BOFID which states that:–

“Any person, being a Director or manager of a bank who fails to:– (a) take all reasonable steps to secure compliance by the Bank

with the requirements of this Decree; or (b) take all reasonable steps to secure the correctness of any

statement submitted under the provisions of this Decree, is guilty of an offence and liable on conviction to a fine of N5,000 or to imprisonment for 5 years or to both such fine and imprisonment.”

Learned Counsel read subsection (7) of section 20 of BOFID which provides that:– “(7) Any bank which, after the commencement of this Decree

enters into any transaction which is inconsistent with any of


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the provisions of subsections (1) and (2) of this section is guilty of an offence and is liable on conviction to a fine of N1,000 for each day during which any such transaction continues.”

Furthermore, learned Counsel referred to subsection (6) which provides:– “(6) All the Directors shall be liable jointly and severally to in-

demnify the bank against any loss arising from the unse-cured advances, loans or credit facilities under paragraph (a) of subsection (2) of this section.”

And contended that “It is unjust and certainly unconstitu-tional for the Tribunal to have tried such a serious issue in proceedings to which the bank was not a party, ie behind the back of the bank”. He argued that:–

“It was a travesty of justice for the Tribunal below to have found or assume that a person has committed a crime when that person has not been given the chance or opportunity to say anything in answer to the accusation. Still further, that in so far as these two Counts (8 and 10) are based on contravention of section 20(2)(a)(i) of BOFID by Crystal Bank of Africa Limited, the penalty not only imposes a liability on all directors of the bank in that under subsection (6) of section 20 they are liable jointly and severally to indemnify the bank against any loss arising from the unsecured facility and conse-quently there is no basis for prosecuting one single Direc-tor/minority-shareholder under section 46(a) of BOFID.”

And that the accused should be found not guilty on Counts 8 and 10.

It is our respectful view that the contention should be re-jected.

Firstly, the duty to prosecute or not to prosecute any al-leged offender whether such offence has been jointly or sev-erally committed by more than one offender, is the duty of the person whose duty is to prosecute.

Similarly, it is the duty of that person to decide what charge and evidence to proffer if the offence could be proved under one or more laws.

Before making a decision several factors would invariably have to be considered. In this particular case, will it be just and fair to prosecute the other Directors when on the


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evidence the principal offender was the appellant who estab-lished the bank and the several different private companies which he used unmindful of the tragic consequences.

In the final result, the appeal fails and is dismissed. The judgment of the Tribunal below is hereby affirmed.


Dr Moses Odaro and another v. Federal Republic of Nigeria 19

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Dr Moses Odaro and another v Federal Republic of Nigeria

SPECIAL APPEAL TRIBUNAL, LAGOS AGBAJE, ODUNLAMI JJ Date of Judgment: 12 JANUARY, 1999 Suit No.: SAT/FBT/444/98

Appeal – Failed Banks Tribunal – Section 5 Failed Banks Decree No. 18 of 1994 (as amended) – Whether governs ap-peal from Failed Banks Tribunal to Special Appeal Tribunal and not the 1979 Constitution relating to appeal from High Court to Court of Appeal Criminal law and procedure – Sentence of imprisonment – When it takes effect – How computed – Sections 381, 395 Criminal Procedure Act Cap 80 Laws of the Federation of Nigeria, 1990 Failed Banks Tribunal – Criminal jurisdiction of – Offences under section 3(1)(b),(c) and (d) Failed Banks Decree No. 18 of 1994 (as amended) – Which of them qualify as “of-fences” under the Decree for the purpose of section 23(3) of the Failed Bank Decree No. 18 of 1994 (as amended) Failed Banks Tribunal – Criminal trials therein – Accused charged for one offence under section 3(1)(d), Failed Banks Decree No. 18 of 1994 (as amended) – When to invoke section 23(3) of the Failed Banks Decree No. 18 of 1994 (as amended) in such circumstance – Options open to the prosecution Failed Banks Tribunal – Criminal trials therein – Accused tried and convicted for an offence by virtue of section 3(1)(d) Failed Banks Decree No. 18 of 1994 (as amended) propriety or otherwise of confiscation order under section 20(2) Failed Banks Decree No. 18 of 1994 (as amended) Failed Banks Tribunal – Criminal trials therein – Accused tried and convicted for an offence under a repealed statute – Act constituting offence committed before repeal of statute – Whether trial unconstitutional pursuant to section 33(12), 1979 Constitution – Whether section 6(1)(d), (e) of Interpre-tation Act conflict with provisions of 1979 Constitution



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Facts The first appellant was at all relevant and material times the Managing Director of Great Merchant Bank Limited incor-porated under the laws of Nigeria as a limited liability com-pany carrying on Merchant Banking business and second appellant was Deputy General Manager in charge of foreign Operations/Treasury Department of the Bank. Both appel-lants in the course of discharging their functions in the bank involved themselves in various foreign exchange dealing for some of their customers without the permission of the ap-propriate authority as required by law, thereby breaching the provisions of Exchange Control (Anti-Sabotage) Act Cap 114 Laws of the Federation of Nigeria, 1990. Both appel-lants were consequently arraigned with another on a 29 count charge in the Failed Banks Tribunal, Enugu Zone pre-sided over by Nzeako, J Counts 1–9 charged the appellants with offence contrary to section 1(1)(h) of the Exchange Control (Anti-Sabotage) Act Cap 114 Laws of the Federa-tion of Nigeria, 1990 and punishable under section 2(1)(a) of the same Act. Count 10 charged the appellants with an offence contrary to section 18(1)(b) of the Banks and Other Financial Institutions Decree No. 25 of 1991. Counts 11–25 charged the appellants with offences of altering or falsifica-tion of books of accounts contrary to and punishable under section 435(2)(a) of the Criminal Code. Count 26 charged the appellants with an offence contrary to section 1(2) of the said Exchange Control (Anti-Sabotage) Act. Count 27 charged the first appellant alone with an offence punishable under section 46 of the said Bank and Other Financial Insti-tutions Decree. Count 29 charged the appellants with an of-fence Contrary to section 18(1)(b) of the Banks and Other Financial Institutions Decree No. 25 of 1991.

At the end of the trial the Tribunal found the appellants guilty of all the offences and convicted them accordingly by imposing mandatory minimum punishment on the appel-lants in addition to imposition of fines.

The appellants being dissatisfied with the Lower Tribunal decisions appealed to the Special Appeal Tribunal contending,



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inter alia, that the Lower Tribunal had no jurisdiction to try, convict and sentence the appellants on Counts 1–7 (both in-clusive) 9 and 26 of the charge because the Exchange Con-trol Anti-Sabotage Act Cap 110 under which the appellants were charged was repealed in 1995 before the appellants were tried, consequently the trial was in contravention of section 33(12) of 1979 Constitution, secondly, that the of-fences do not fall within the scope of the offences which the tribunal can try under section 3(1)(d) of the Failed Bank De-cree because the offences do not relate to business or opera-tion of a bank. Thirdly that the tribunal acted in error by confiscating or forfeiting the assets of the appellants under section 20(2) of the Failed Bank Tribunal for offences charged under section 435(2) of the Criminal Code stated in Counts 13, 14, 15–25 and lastly that the terms of imprison-ment of the appellants should commence from the time they were taken into custody for the offences for which they were eventually convicted and sentenced to various terms of im-prisonment by the Lower Tribunal.

The respondent on the other hand equally raised a prelimi-nary objection to the appeal contending, inter alia, that grounds of appeal raised issues of mixed law and facts with-out the leave of the Tribunal sought and obtained and that the appellants briefs were defective for incorporating argu-ment or proposed grounds of appeal before obtaining the or-der to file the proposed grounds.

At the hearing and determination of the appeal, appellants appeal on Count 26 was allowed, whilst their appeal against their convictions and sentences on other counts were dis-missed.

Held – 1. Section 23(3) of the Failed Banks Decree No. 18 of 1994

(as amended) will not be applicable where Failed Banks Tribunal is exercising its criminal jurisdiction under sec-tion 3(1)(c) and (d) of the Failed Banks Decree No. 18 of 1994 (as amended). The section can only be invoked when the Lower Tribunal is exercising its criminal juris-diction pursuant to section 3(1)(d) of the Failed Banks



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Decree. The Lower Tribunal in the instant case, wrongly applied the provisions of section 23(3) to convict the appellants of another offence which the evidence dis-closed instead of the offence charged. They are wrongly convicted and sentenced on Count 26.

2. The appellants though were tried and convicted for an offence under an enactment different from the Failed Banks Decree No. 18 of 1994 (as amended) and pursu-ant to section 3(1)(d) thereof, the Lower Tribunal can still order the confiscation of their properties under sec-tion 20(2) of the Failed Banks Decree No. 18 of 1994 (as amended).

3. The liability of an offender for a statutory offence com-mitted while the statute was in force is preserved not-withstanding the repeal of the statute after the commis-sion of the offence and before charge. The provisions of section 6(1)(d) and (e) of the Interpretation Act are not contrary to any of the provisions of the 1979 Constitu-tion particularly section 33(12) of the said Constitution.

4. The Lower Tribunal had the jurisdiction to try the first appellant in respect of Counts 1–7 (both inclusive), 9 and 26 for violations of section 1(1)(a), (g) and (h) of the Ex-change Control (Anti-Sabotage) Act Cap 114 Laws of the Federation of Nigeria, 1990 because they fall within the scope of the offences which the Tribunal can try under section 3(1)(d) of the Failed Banks Decree No. 18 of 1994 (as amended). This is because Banks must necessar-ily in the discharge of the functions regarding the matter therein act on the permission of the appropriate authority to do so as evidenced by the requisite documents. So the documents referred to in section 1(1)(g) of the Act on which offences under section 1(1)(h) of the Act are grounded relate to the business or operation of the Bank.

5. It appears from section 381 of Criminal Procedure Act that the date from which a sentence of imprisonment commences is the date it is pronounced, however by vir-tue of section 395 of the Criminal Procedure Act if a



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person is brought to prison by virtue of a warrant of commitment there shall be endorsed on such warrant the day on which such person was arrested by virtue thereof and the imprisonment shall be computed from such day and inclusive thereof. In the present case, Lower Tribunal failed to endorse on the warrants of commitment, the day the appellants were arrested and the appeal tribunal remit the issue back to the Lower Tribunal and upon the en-dorsement and provisions of section 395 will automati-cally take effect.

6. Appeals from the Failed Banks Tribunal to the Special Appeal Tribunal are not governed by the provisions of the 1979 Constitution relating to Appeals from the High Court to the Court of Appeal but by the provisions of section 5 of the Failed Banks Decree No. 18 of 1994 (as amended) which enjoins that the Appeal shall be in ac-cordance with the provisions of the Recovery of Public Property (Special Military Tribunals) (1984 No. 3) Act Cap 389 Laws of the Federation of Nigeria, 1990 which established the Special Appeal Tribunal.

Appeal dismissed.

Cases referred to in the judgment

Nigerian Ifegwu v Federal Republic of Nigeria (1997) 1 FBTLR 86 Ogbomor v State (1985) 1 NWLR (Part 2) 223 Onogwu v The State (1995) 6 NWLR (Part 401) 276 Queen v Bukar (1961) All NLR 646 Queen v Tuke (1961) All NLR 258

Nigerian statutes referred to in the judgment Constitution of the Federal Republic of Nigeria, 1979, sec-tion 33(12) Criminal Procedure Act Cap 80 Laws of the Federation of Nigeria, 1990 sections 381 and 395



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Exchange Control (Anti-Sabotage) Act Cap 114 Laws of the Federation of Nigeria, 1990 sections 1(1)(a), (g)–(h), 2(1)(a) Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended) sections 3(1)(b), (c) and (d), 20(5), 23(3) Foreign Exchange (Monitoring and Miscellaneous Provi-sions) Decree No. 17 of 1995, section 38(1) and 38(2) Interpretation Act Cap 192 Laws of the Federation of Nige-ria, 1990, section 6(1)(d), (1)(e)

Counsel For the first appellant: Dr Layonu For the second appellant: Wale Akoni For the respondent: Kanu Agabi, S.A.N.

Judgment AGBAJE J: The appellants, Dr Moses Odaro and Mr Sunday Martin Edigin, were arraigned on a 29 Count charge in the Failed Banks Tribunal, Enugu Zone presided over by Nzeako, J. Counts 1–9 charge the appellants with offence contrary to section 1(1)(h) of the Exchange Control (Anti-Sabotage) Act Cap 114 of the Laws of the Federation of Ni-geria 1990 and punishable under section 2(1)(a) of the same Act. Count 10 charges the appellants with an offence con-trary to section 18(1)(b) of the Banks and Other Financial Institutions Decree No. 25 of 1991. Counts 11 to 25 charge the appellants with offences of altering or falsification of books of account contrary to and punishable under section 435(2)(a) of the Criminal Code. Count 26 charges the appel-lants with an offence contrary to section 1(2) of the said Ex-change Control (Anti-Sabotage) Act. Count 27 charges the first appellant alone with an offence punishable under sec-tion 46 of the said Banks and other Financial Institutions Decree. Count 29 charges the appellants with an offence contrary to section 18(1)(b) of the Banks and other Finan-cial Institutions Decree No. 25 of 1991.


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The trial of the appellants commenced on 14 May, 1996. The prosecution at the trial called in all 27 witnesses and tendered in evidence 176 exhibits. The appellants, each of them, testified in their own defence in the witness box and also tendered in evidence between them 25 exhibits.

At the end of the day the Lower Tribunal found the appel-lants guilty and convicted them as follows:– (a) Count 1 – 5 years’ imprisonment, hard labour each

and a fine of $2,350,000. (b) Count 2 – 5 years’ imprisonment each and a fine of

$1,857,234.32. (c) Count 3 – 5 years’ imprisonment each and a fine of

$1,500,000. (d) Count 4 – 5 years’ imprisonment each and a fine of

£960,105. (e) Count 5 – 5 years’ imprisonment each and a fine of

$1,758,500. (f) Count 6 – 5 years’ imprisonment each and a fine of

$198,346. (g) Count 7 – 5 years’ imprisonment each and a fine of

$300,000. (h) Count 9 – 5 years’ imprisonment each and a fine of

$1,920,005.08. (i) Counts 10 and 11 cautioned and discharged. (j) Count 12 – first appellant cautioned and discharged. (k) Counts 13, 14, 16 to 25 – 1 year’s imprisonment

each and to refund the sum of N141,887,548.42. (l) Count 26 – 5 years’ imprisonment, hard labour each

and a fine of $9,316,409.37. (m) Count 27 (first appellant only) – a fine of N5,000. (n) Count 28 (second appellant only) – a fine of N5,000. (o) The appellants were discharged and acquitted on

count 29. All the prison terms run concurrently.


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The appellants (both of them), have now appealed against their convictions and sentences to this Special Appeal Tri-bunal. Briefs of arguments have been filed by Counsel on behalf of each of the appellants. In reply to both briefs, Counsel for the respondent has filed a single brief.

In the first appellant’s brief of arguments the issues which are submitted for determination in this appeal are as fol-lows:– “(i) Whether the Tribunal below had the jurisdiction to try, con-

vict and sentence the first appellant in respect of counts nos. 1 to 7 (both inclusive), 9 and 26?

(ii) Whether in sentencing the second accused in respect of counts nos. 1 to 7 (both inclusive), 9 and 26, the tribunal below had a discretion as to the nature and length of sen-tence or other punishment to impose?

(iii) Whether the tribunal below had the jurisdiction to order confiscation or forfeiture of assets in respect of Counts 13, 14, 16–25, not being offences punishable under the Failed Banks Decree as amended but under the Criminal Code which does not provide for forfeiture or confiscation in re-lation to those offences?

(iv) Are the sentences imposed and the order of forfeiture and fine not in the entire circumstances of the case harsh and cruel?

(v) Whether having held that section 1(2) of the Exchange Control (Anti-Sabotage) Decree, 1984 under which the first appellant was charged in count 26 did not create any of-fence, the tribunal below had the power to convict the first appellant in respect of another offence without giving him the opportunity to plead thereto and defend himself thereof.”

The issues submitted in the second appellant’s brief of ar-guments in this appeal are the same as those indicated above in the first appellant’s brief of arguments.

Counsel for the respondent in the respondent’s brief of ar-guments adopted the above issues as arising for determina-tion in this appeal, subject to the following preliminary ob-jections.

First:– As to Ground 4 of both appellants grounds which chal-lenges the exercise of the discretion of the Lower Tribunal in


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passing the sentences it imposed on the appellants. According to Counsel for the respondent, this is a ground of appeal of mixed law and fact and because of section 221(1) of the 1979 Constitu-tion to raise such a ground in an appeal from a decision of the High Court to the Court of Appeal leave of the High Court or the Court of Appeal is required. The short answer to this objection is that the instant appeal is not governed by the provision of the 1979 Constitution relating to appeals from the High Court to the Court of Appeal but by the provisions of section 5 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 which enjoins that the appeal shall be in accor-dance with the provisions of the Recovery of Public Property (Special Military Tribunal) Decree, 1984 which established this Special Appeal Tribunal. Counsel for the respondent has not drawn our attention to any provisions in that Decree or in the Rules of this Special Appeal Tribunal made under that Decree supporting this contention of his. We too have found nothing in that regard therein supporting the contention of Counsel. So, we reject it. Second:– Objection to taking of arguments on Grounds 6, 7 and 8 of the first appellant’s Grounds of Appeal 7, 8 and 9 of the second appellant’s grounds of appeal in respect of which grounds no is-sues for determination were submitted in both the appellants’ brief of arguments. We must uphold this preliminary objection. It is trite to say that grounds of appeal in respect of which no issues were submitted for determination in an appellants’ brief of arguments must be deemed to have been abandoned. Third:– Objection to the appellants’ brief of arguments because they incorporated arguments on proposed grounds of appeal before obtaining the order to file the proposed grounds of appeal. Time is of the essence of the deliberations of the Lower Tribunal and this Special Appeal Tribunal. So the practice of this Special Appeal Tribunal is to adopt procedure which will expedite the hearing of an appeal and not delay it. The step which the appellants have taken in incorporating arguments on the proposed grounds of ap-peal before obtaining the leave to file the grounds of appeal tends towards the former and we have always encouraged it in this Ap-peal Tribunal. So, we reject this preliminary objection, too.

We can now proceed to consider the appellants’ appeals on the merit. We take issue one first, whether the Lower Tribu-nal had the jurisdiction to try, convict and sentence the ap-pellants on Counts 1 to 7 (both inclusive), 9 and 26 of the charge.


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It is common ground in this appeal that the Exchange Con-trol (Anti-Sabotage Act), Cap 110 of the Laws of the Fed-eration of Nigeria, 1990, hereinafter referred to as “the Act” was repealed with effect from 16 January, 1995 by section 38(1) of the Foreign Exchange (Monitoring and Miscellane-ous Provisions) Decree 1995, Decree No. 17 of 1995. Be-cause of this, it is submitted in the first appellants’ brief of arguments and in oral arguments by Counsel in Court that the arrest, prosecution and conviction of the appellants after the repeal of the Act for offences under the Act were null and void. It must also be stated that it is common ground in this appeal that the acts and/or omissions on the part of the appellants giving rise to the charge against the appellants occurred before the repeal of the Act, that is in 1991, 1992 and 1993 before the Act was repealed on 16 January, 1995.

It is submitted by Counsel for the first appellant, Dr Layonu, that the jurisdiction of the Lower Tribunal to try the appellants for the offences in question must necessarily de-rive from section 3(1)(d) of the Failed Banks Decree which empowers that Tribunal to try offences relating to the busi-ness or operation of a bank under any enactment. It is then submitted that because of the repeal of the Act at the time of the arrest and prosecution of the appellants the Act no longer qualifies as an “enactment” to ground the jurisdiction of the lower tribunal under section 3(1)(d) of the Failed Banks Decree to try the appellants for the offences created by the Act.

Counsel for the first appellant Dr Layonu, with admirable candour called our attention to the provisions of section 6(1)(d) and (e) of the Interpretation Act, 1964 Cap 192 Laws of the Federation of Nigeria, 1990 which provide:–

“Section 6(1): The repeal of an enactment shall not:– (a)–(c) not applicable (d) affect any penalty forfeiture or punishment incurred in re-

spect of any offence committed under the enactment of the Act;

(e) affect any investigation, legal proceeding or remedy in re-spect of any such right, privilege, obligation, liability, pen-alty, forfeiture or punishment: and any such investigation,


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legal proceeding or remedy may be instituted, continued, or enforced and any such penalty forfeiture or punishment may be imposed as if the enactment has not been repealed.”

Counsel for the first appellant, Dr Layonu, also called our attention to section 38(2) of Decree No. 17 of 1995 which provides thus:–

“It is hereby declared that without limiting the provisions of the Interpretation Act, the repeal of these Decrees shall not affect any document made or anything whatsoever done under the enact-ments so repealed.”

Section 38(1) of Decree No. 17 of 1995, it will be recalled, repealed the Act creating the offences now under considera-tion. Counsel for the first appellant, Dr Layonu, then submit-ted that section 6(1)(d) and (e) of the Interpretation Act are contrary to the provisions of section 33(12) of the 1979 Constitution as amended by Decree No. 107 of 1993 which says:–

“Subject as otherwise provided by this Constitution a person shall not be convicted of a criminal offence unless that offence is de-fined and the penalty therefore is prescribed in a written law and in this subsection a written law refers to an Act of the National As-sembly or a Decree or the Law of a State or an Edict.”

Counsel then submitted that once a law or decree is no longer in existence by reason of its having been repealed by another law or decree it ceases to be a written law for the purposes of section 33(12) of the 1979 Constitution. The re-sultant position, according to Counsel is that the trial and conviction of a person under a repealed statute, as in the in-stant appeal, are illegal and unconstitutional. He placed reli-ance on the case of Ogbomor v State (1985) 1 NWLR (Part 2) page 223 at 234 as per the judgment of Karibi-Whyte, JSC for this submission. Let us say straightaway that the de-cision in Ogbomor v The State does not say anything like the submission now put forward by Dr Layonu, Counsel for the first appellant.

As regards section 38(2) of the Decree No. 17 of 1995 re-ferred to above, it is the submission of Counsel for the ap-pellant that the saving clause is only in relation to “docu-ments made” or “anything done” or prosecution done or


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conviction secured before the repeal of the Decree in ques-tion. Truly enough, the saving clause relates to “documents made” or “anything whatsoever done” before the repeal of the enactments in question. But, in our judgment, as to the consequences which such documents or acts or omissions can attract legally they are not limited to the time before the repeal of the statutes but they extend to the period after their repeal. So, we reject the submissions of Counsel as regards section 38(2) of Decree 17 of 1995.

The provisions of section 6(1)(d) and (e) of the Interpreta-tion Act are not contrary to any of the provisions of the 1979 Constitution. The provisions explain the position in a situation where something was done under a law which is later repealed but before the repeal, as to the right, privilege, obligation, liability, penalty, forfeiture or punishment which the thing done attracts. Section 33(12) of the 1979 Constitu-tion, in our view, does not provide for anything contrary to the provisions of section 6(1)(d) and (e) of the Interpretation Act. Nor do the provisions of section 6(1)(d) and (e) of the Interpretation Act, in our view, conflict with those of sec-tion 33(12) of the 1979 Constitution.

In our judgment, section 6(1)(d) and (e) of the Interpreta-tion Act and section 33(12) of the 1979 Constitution can without offence be applied pari passu to any criminal pro-ceedings in respect of acts done under an enactment before its repeal after the repeal of the enactment.

Counsel for the respondent has called our attention to the following decisions of the Federal Supreme Court:– First:– The Queen v Bukar (1961) All NLR 646 at 647

where it is held as follows:– “The liability of an offender for a statutory offence

committed while the statute was in force is preserved not withstanding the repeal of the statute after the commission of the offence and before charge.”

Second:– The Queen v Tuke (1961) All NLR 258 where it is held as follows:–

“As the offence was committed at a time when the Criminal Code was in force and was an offence against section 319 of that Code it was proper to


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prosecute for an offence against that section even though that section had been replaced by a section of the N.R. Penal Code Law 1959 at the time of return for trial.”

The above decisions of the Federal Supreme Court, have, in our judgment, recognised the constitutional propriety of provisions like section 6(1)(d) and (e) of the Interpretation Act, now under consideration.

The appellants were charged in the Counts in question with committing offences contrary to section 1(1)(h) of the Act and punishable under section 2(1)(a) of the same Act. It is therefore clear that the offence of which the appellants were convicted has been defined in a written law and the penalty therefore prescribed in a written law. So, in our judgment there is no question of violation of section 33(12) of the 1979 Constitution in the criminal proceedings leading up to this appeal.

The second reason why the Counsel for the first appellant contended that the Lower Tribunal did not have necessary jurisdiction to try and convict the appellants in respect of the counts in question is that the offences charged in those counts do not, according to him, fall within the scope of the offences which the tribunal can try under section 3(1)(d) of the Failed Banks Decree because, again according to Coun-sel, the offences do not relate to the business or operation of a bank.

We reproduce section 1(1)(a), (g) and (h) of the Act. They say:– “1.(1) Any person who, whether or not before the commence-

ment of this Act but not earlier than 1 October, 1979 does any of the following things, that is to say:–

(a) without the permission of the appropriate authority:– (i) makes any payment to or for the credit of a

person resident outside Nigeria; or (ii) makes any payment to or for the credit of any

person resident in Nigeria by order or on be-half of a person who is resident outside Nige-ria; or


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(iii) makes any payment whatsoever in respect of any loan, bank overdraft or other credit facili-ties outside Nigeria, or

(iv) places any sum to the credit of any person resident outside Nigeria.

(b)–(f) not necessary, (g) counterfeits or falsifies any document which

is required for obtaining any permission under the Act or which is used for the transaction of any business connected with the obtaining of any such permission; or

(h) knowingly accepts, receives or uses any documents to which paragraph (g) of this sec-tion relates;

(i)–(k) not necessary, Shall notwithstanding anything to the contrary in any

law, be guilty of an offence under this Act.”

A cursory look at these provisions will show that they relate to the business or operation of a bank. Banks are highly in-volved in the operations of exchange control regulations. In the matters specified in section 1(1)(a) of the Act quoted above banks are very much involved on behalf of their cus-tomers. Banks must necessarily in the discharge of the func-tions regarding these matters act on the permission of the appropriate authority to do so as evidenced by the requisite documents of that authority. So, the documents referred to in section 1(1)(g) of the Act on which offences under sec-tion 1(1)(h) of the Act are grounded relate, in our judgment, to the business or operation of a bank under the Exchange Control Legislations. So, in our judgment, the offences charged in this case eminently relate to the business or op-eration of a bank under the Exchange Control (Anti-Sabotage) Act.

Counsel for the second appellant Mr Wale Akoni associ-ated himself with the submissions of Dr Layonu on Issue 1. The conclusion we reach on Issue 1 having regard to what we have hitherto said is that it must be resolved against the appellants. We therefore hold that the Lower Tribunal had jurisdiction to try the offence in question.


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We now go to Issue 2 as to whether in sentencing the ap-pellants in respect of Counts 1–7 (both inclusive), 9 and 26 the lower tribunal had a discretion as to the nature and length of sentence or other punishment to impose. It is stated in the charge that the offences charged are punishable under section 2(1)(a) of the Act which says:– 2(1) “Any person convicted of an offence under section 1 of

this Act shall:– (a) in the case of an individual be liable to imprison-

ment for a term not less than five years and a fine of an amount not less than the amount and value of the currency, security, payment, property or transaction in respect of which the offence was committed.” (Italics ours.)

It is clear to us beyond peradventure on a true and proper construction of the above penalty clause that the Lower Tri-bunal having found the appellants guilty of the offence charged in Counts 1–7, 9 and 26 had no discretion at all to impose a term of imprisonment less than 5 years’ imprison-ment and in addition a fine of an amount not less than the amount and value of the currency, security, payment, prop-erty or transaction in respect of which the offence was committed.

We have held earlier on in this judgment that section 6(1)(d) and (e) of the Interpretation Act and section 33(12) of the 1979 Constitution can without offence be applied pari passu to the criminal proceedings in respect of Counts 1–7, 9 and 26 in this case. And we have further held that the statement in the charge that the offences charged are punishable under sec-tion 2(1)(a) of the Act satisfies the requirement of section 33(12) of the 1979 Constitution that the punishment for the offence charged must be prescribed in a written law.

The question that then arises after the Lower Tribunal had convicted the appellants of the offences charged and im-posed sentences on them is, in our judgment, on the issue of the sentences imposed by it, whether those sentences are in conformity with the punishment prescribed by the written law under which they were charged for the offences ie in ac-cordance with section 2(1)(a) of the Act.


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In our judgment, the provisions of section 6(1)(d) and (e) of the Interpretation Act have nothing to do with the ques-tion of sentence which the lower tribunal can impose after finding the appellants guilty as charged.

In our judgment too the provisions of section 20(5) of the Failed Banks Decree which say:–

“Where by reason of the confiscation or voluntary surrender of property under this section there is full or substantial recovery of the amount involved in the offence, the tribunal may, if it deems it equitable, reduce or decline to impose the penalty specified in subsection (1) of this section or in any other enactment.”

are not applicable here. This is so, in our judgment, because of the clear and unambiguous and mandatory provisions of penalty clause of the Act under which Counts 1–7 and 9 are laid. For section 20(5) of the Failed Banks Decree to be ap-plicable, the Lower Tribunal must deem it equitable to apply it. No reasonable tribunal in our judgment will deem it equi-table to apply the provisions of section 20(5) when in doing so it will, as in the instant case, violate the statutory manda-tory minimum punishment for the offence in question.

It has not been shown to us that the Lower Tribunal acted contrary to the provisions of section 2(1)(a) of the Act – the punishment section, in imposing the sentences it imposed on the appellants on the counts in question. We therefore re-solve Issue 2 against the appellants. We hold that the sen-tences imposed by the Lower Tribunal on the appellants in respect of the counts in question are in order. We reject all the submissions made to the contrary in the appellants’ briefs of arguments.

We now come to Issue 3, which has been copied above. It is submitted in the appellants’ brief of arguments by Coun-sel for each of the appellants that it was an error for the Tribu-nal below to try, convict and sentence the appellants on Counts 13, 14, 15–25 of the charge for offences under section 435(2) of the Criminal Code and thereafter to impose in addition a forfeiture or confiscation order of specified assets of the appel-lants under section 20(2) of Failed Banks Decree as amended. Reliance was placed on the case of Ifegwu v Federal Republic


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of Nigeria (1997) 1 FBTLR 86 at 89–90 and 103 for the sub-missions. The decision in Ifegwu v Federal Republic of Nige-ria (supra) is in our judgment not in point here. For the deci-sion was not concerned with forfeiture and confiscation order of the property of a convict under section 20(2) of the Failed Banks Decree in addition to the sentence imposed on the con-vict under the appropriate legislation.

The jurisdiction of the Failed Banks Tribunal, the Lower Tribunal, to try the appellants for the offences in question un-der the Criminal Code, Counsel for the respondent submitted in respondent’s brief of arguments, is derived from section 3(1)(d) of the Failed Banks Decree. We agree with him. We also agree to his further submission, that the offences tried by the Lower Tribunal by virtue of section 3(1)(d) of the Failed Banks Decree are offences under an enactment other than the Failed Banks Decree triable by that Tribunal.

Section 20(2) of the Failed Banks Decree provides thus:– “The Tribunal may order the confiscation of the property, movable or immovable of a person convicted of an offence under this Decree or any other enactment triable by that Tribunal of the value equal to the amount involved in the offence or for such other value as the tri-bunal may deem fair and just in the circumstance.” (Italics ours.)

From what we have said above it is clear to us that the lower tribunal did not err to try, convict and sentence the appel-lants under section 435(2) of the Criminal Code and thereaf-ter to impose in addition a forfeiture or confiscation order of specified assets of the appellants by virtue of section 20(2) of the Failed Banks Decree as amended. So, in our judg-ment, Issue 3 is resolved against the appellants.

We now take Issue 4 as to whether the sentences imposed in this case are not harsh and cruel. In view of what we have said on Issue 2, we cannot justifiably say that the sentences imposed on the appellants on Counts 1–7 (both inclusive) and 9 and 26 are harsh and excessive. On Counts 10, 11 and 12 the Lower Tribunal cautioned and discharged the appel-lants. We are now left with the sentence passed on the appel-lants in respect of Counts 13, 14, 16–25, 27 (on first appel-lant) and 28 (on second appellant only).


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In respect of Counts 13, 14, 16–25 of the charge the appel-lants were each sentenced to a term of one year’s imprison-ment on each count, sentences to run concurrently. The maximum penalty for the offence charged in each of those counts is 7 years’ imprisonment. After the imposition of the terms of imprisonment the lower tribunal ordered thus:– “2. As it has been shown in evidence in exhibits P. 169 the to-

tal sum outstanding as at June 17, 1996 in respect of these counts was N141,887,582.42, it is hereby ordered that the first and second accused shall refund this sum. It is further ordered that their property listed in Exhibit 160(1) and 160(2) be and is hereby confiscated and the amount real-ised therefrom shall go to meet the outstanding debts therein. The confiscation includes any money in banks; should it be found that further sums have been recovered since June, 1996 reducing the said outstanding sum of N141,887,548.12 this order shall apply to that reduced out-standing sum. Any balance of the funds realised from the assets in excess of the said outstanding (amount) shall be returned to the accused person.”

It appears to us that the order of the Lower Tribunal as re-gards the sum of N141,887,548.42 which the appellants are to refund in respect of Counts 13, 14, 16–25 of the charge are not strictly speaking a penalty imposed on the appellant but a peremptory order for the payment of the outstanding sum due from them. In the same vein the order for the con-fiscation of the properties of the appellants is strictly speak-ing not a confiscation order but an execution order for the seizure and sale of those properties to settle the outstanding sum of money due from the appellants. It cannot be other-wise for the lower tribunal ordered that any balance of the funds realised from the assets of the said outstanding sum shall be returned to the appellants.

We cannot say on a calm view of the orders made by the Lower Tribunal, having found the appellants guilty on Counts 13, 14, 16–25, that the terms of imprisonment are harsh or excessive, let alone cruel or that the orders made in respect of the outstanding sum of money due from the ap-pellants are harsh, let alone cruel.


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In respect of Count 27 on which the first appellant was found guilty a fine of N5,000 was imposed on him. In respect of Count 28 on which the second appellant was found guilty a fine of N5,000 was imposed on him. The maximum penalty for the offences charged in Counts 27 and 28 is either a fine of N5,000 or 5 years’ imprisonment or both. The Lower Tri-bunal imposed a fine only, albeit the maximum fine. The con-clusion we reach on the issue of sentence is that we have not been persuaded that we can justifiably interfere with any of the sentences passed on the appellants in this appeal.

We now come to the last issue, Issue 5; it has been set down earlier on in this judgment. Count 26 of the charge is laid under section 1(2) of the Exchange Control Act 1984. The Lower Tribunal held that the count was not properly laid under that provision of the Act since the provision does not create any offence. This finding is not challenged in this appeal by the respondent. In fact, it was conceded in the Lower Tribunal. The Lower Tribunal, relying on section 23(3) of the Failed Banks Decree 1994 convicted the appel-lants of another offence, to wit an offence under section 1(1)(d) of the same Act and sentenced them under section 2(1)(a) of the same Act.

It is the contention of Counsel for the appellants that the Lower Tribunal lacked the power to convict the appellants of another offence instead of the offence charged relying as it did on section 23(3) of the Failed Banks Decree No. 18 of 1994 and the case of Onogwu v The State (1995) 6 NWLR (Part 401) 276 at 295. The latter is not relevant. Section 23(3) of the Failed Banks Decree No. 18 of 1994 says:–

“Where a person is charged with an offence under this Decree, but the evidence establishes the commission of another offence under this Decree, the offender shall not be entitled to acquittal but he may be convicted of that other offence and punished as provided under this Decree.” (Italics ours.)

In our judgment for the provisions of section 23(3) of the Failed Banks Decree to apply the offence which is charged and another offence the commission of which the evidence establishes must be offences under the Failed Banks Decree No. 18 of 1994.


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Let us illustrate what we have just said by reference to the criminal jurisdiction of the Failed Banks Tribunal as pro-vided in section 3(1)(b), (c) and (d) of the Failed Banks De-cree. The section reads thus:– “3(1) The Tribunal shall have power to:– (b) try offences specified in part 111 of this Decree; (c) try offences specified in the Banks and Other Fi-

nancial Institutions Decree, 1991 and the Nigeria Deposit Insurance Corporation Decree, 1988; and

(d) try other offences relating to the business or opera-tion of a bank under any enactment.”

The criminal jurisdiction of the Failed Banks Tribunal under section 3(1)(b) relates to offences under the Decree. The criminal jurisdiction of the Failed Banks Tribunal under sec-tion 3(1)(c) and (d) relates to offences in enactments other than the Failed Banks Decree. In other words the jurisdic-tion does not relate to offences under the Decree.

In our judgment the provisions of section 23(3) of the De-cree will only apply when the Lower Tribunal is exercising its criminal jurisdiction by virtue of section 3(1)(b) of the Decree only.

In respect of Count 26 of the charge, the lower tribunal was exercising its jurisdiction in respect thereof by virtue of section 3(1)(d) of the Failed Banks Decree. So, in our judg-ment, the Lower Tribunal wrongly applied the provisions of section 23(3) of the Decree to convict the appellants of an-other offence which the evidence disclosed instead of the offence charged.

The course of action legally open to the prosecution in the lower tribunal in situation now under discussion was to cause Count 26 to be amended to reflect the new offence which the evidence established and then call on the appel-lants to plead afresh to Count 26 as amended. The prosecu-tion had not done this. There is no jurisdiction in an appel-late tribunal to amend a charge to reflect an offence other than the one charged.

In our judgment, therefore, the appellants were wrongly convicted and sentenced on Count 26. In our judgment, the


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appeals of the appellants are allowed on Count 26. Their convictions and sentences in respect thereof are set aside. In their place an order of acquittal and discharge on that count is hereby entered.

In the result the appellants/appeal against their convictions and sentences on Counts 1, 2, 3, 4, 5, 6, 7, 9, 13, 14, 16–25, 27 and 28 are dismissed by us. Their convictions and sen-tences by the lower tribunal on those counts are affirmed by us. The appeals of the appellants on Count 26 are allowed by us. Their conviction and sentences on that count are set aside by us. In their place an order of discharge and acquittal is entered by us.

Before we part with this judgment we have to pronounce on the submissions of Counsel for the appellants that their terms of imprisonment should commence from the time they were taken into custody for the offences for which they were eventually convicted and sentenced to various terms of im-prisonment by the Lower Tribunal.

Sections 381 and 395 of the Criminal Procedure Act Cap 80 of the Laws of the Federation of Nigeria, 1990 give us guidance in this regard. Section 381 says:–

“A sentence of imprisonment takes effect from and includes the whole of the date on which it was pronounced.”

Section 395 says:– “Where a person is brought to any prison to be imprisoned by vir-tue of a warrant of commitment there shall be endorsed on such warrant the day on which such person was arrested by virtue thereof and the imprisonment shall be computed from such day and inclusive thereof.”

It appears from section 381 of the Criminal Procedure Act that the date from which a sentence of imprisonment com-mences is the date it is pronounced. However, by virtue of section 395 of the Criminal Procedure Act if a person is brought to prison by virtue of a warrant of commitment there shall be endorsed on such warrant the day on which such per-son was arrested by virtue thereof and the imprisonment shall be computed from such day and inclusive thereof. It appears that section 395 of the Criminal Procedure Act refers to the


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warrant of commitment by virtue of which a convict is to be imprisoned for the offence or offences he commits. It is that warrant of commitment which will contain the endorsement as to when he is arrested by virtue thereof. We have no mate-rial before us in this appeal to give effect to section 395 of Criminal Procedure Act. So we remit the issue to the Lower Tribunal for it to endorse on their warrants of commitments the day they were arrested by virtue thereof. Then the provi-sions of section 395 will automatically take effect.

[1999] 9 N.B.L.R. (FAILED BANKS TRIBUNAL, ZONE VII, LAGOS)

Federal Republic of Nigeria v. Babatunde Olusegun Akinnigbagbe 41

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Federal Republic of Nigeria v Babatunde Olusegun Akinnigbagbe and another

FAILED BANKS TRIBUNAL, ZONE VII, LAGOS EVUTI J Date of Judgment: 13 JANUARY, 1999 Suit No.: FBFMT/L/ZVII/CR/01/98

Banking – Offences – Director of company charged under section 18(1)(b) Banks and Other Financial Institutions De-cree No. 25 of 1991 – Company not charged – Whether charge vitiated

Banking – Offences – Grant of unauthorised loan – Section 18(1)(b) Banks and Other Financial Institutions Decree No. 25 of 1991 – Ingredients of offence Banking – Offences – Under section 18(1)(b) Banks and Other Financial Institutions Decree No. 25 of 1991 – De-posit of security after grant of facilities – Not meeting re-quirements of section 18

Criminal law and procedure – Conspiracy – How proved Criminal law and procedure – Person using statutory per-son or an insane person to commit a crime – Liability of Facts The first accused was an employee of Nigeria Arab Bank Limited, now Assurance Bank, as a Branch Manager at its Oke-Ado Branch, Ibadan and was charged as follows:–

“Count 1:– That you Babatunde Olusegun Akinnigbagbe while being

the Branch Manager of the Oke-Ado Branch of Nigeria Arab Bank Limited and Alhaji Rasheed Sulaiman, Manag-ing Director of Polyvalent Nigeria Limited, a customer of the Bank on or about the 1 December, 1992 did commit a felony to wit, conspired together with one another to grant the sum of N11,100,000 (Eleven Million, One Hundred Thousand Naira) to Polyvalent Nigeria Limited in breach of rules and regulations of the bank thereby committed an of-fence punishable under section 516 of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 to be



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read in conjunction with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).

Count 2:– That you Babatunde Olusegun Akinnigbagbe while being

the Branch Manager of Oke-Ado Branch of Nigeria Arab Bank Limited on or about 1 December, 1992 did grant to Polyvalent Nigeria Limited a customer of the Oke-Ado Branch of the Bank an unauthorised credit facility in the sum of N11,100,000 (Eleven Million, One Hundred Thou-sand Naira) without security in breach of the rules and regulations of the bank contrary to section 18(1)(b) of the Banks and Other Financial Institutions Decree No. 25 of 1991, to be read in conjunction with section 3(1)(c) of the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended).”

He was alleged to have granted a credit facility of N11,100,000 (Eleven Million, One Hundred Thousand Naira) to the second accused who was a Director of a Com-pany, Polyvalent Nigeria Limited, a customer of the Bank in breach of the bank’s rules and regulations.

According to one of the prosecution witnesses, the second accused came to the bank on 1 December, 1992 and went as was his practice direct to the Manager’s office. Later the first accused came out of his office with four cheques be-longing to the second accused’s company and each cheque was an instruction to issue drafts in the sum of N1.5m, N2.6m, N2.9m and N4.1m drawn on the Nigeria Arab Bank, and which was done. She said that the owner of the cheques, was Polyvalent and signed by the second accused, the sole signatory, and the facilities were granted without the authority of the bank’s Head Office. The balance in the account of the company at the time of the transaction was N47,477.36 (Forty Seven Thousand, Four Hundred and Seventy Seven Naira, Thirty Six Kobo) only.

The second accused however, only deposited collaterals with the bank when he was arrested but not before the grant.

The learned Counsel for the accused persons made no case submissions for them after the prosecution case but this was



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rejected by the court and the accused persons called upon to enter their defence.

The first accused in his evidence agreed that there was no collateral at the time of the grant and that his action was done in good faith. His Counsel submitted that the charges had not been proved. Held – 1. The crime of conspiracy is the agreement between two or

more persons to do an illegal act, and the crime of conspir-acy is completely committed the moment two or more have agreed that they will do, at once or at some future time, certain things. It is not necessary in order to complete the offence that any one thing should be done beyond the agreement. The conspirators may repent and stop or may have no opportunity or may be prevented or may fail. Nev-ertheless the crime is completed when they agreed.

2. Proof of conspiracy is generally a matter of inference and the inference of involvement of an accused person can be inferred from all the surrounding circumstances.

In the instant case, the charge of conspiracy against each accused person is established beyond reasonable doubt. Each of the accused is therefore found guilty on count one.

3. The ingredients of this offence as disclosed in section 18(1) of the Banks and other Financial Institutions De-cree No. 25 of 1991 are:–

(1) The accused must be a Manager, Director or any other Officer of a Bank.

(2) That there was a credit facility granted. (3) That the credit must have been unauthorised. (4) The facility must be unsecured or inadequately se-

cured. (5) The security must be obtained prior to the granting

of the facility. 4. As envisaged by section 18(1) the security deposited must

be a condition precedent to the grant of the facilities rather than being subsequent to the grant. Consequently,



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the deposit of two title documents in respect of the sec-ond accused’s properties after the grant of the facilities does not meet the requirement of section 18 of Decree No. 25 of 1991.

5. Per curiam “On the argument put up by the Defence Counsel that the

non-production of the rules and regulations of the bank is fatal to the prosecution’s case to this I disagree based on the evidence of PW2 and the stipulation of section 18(1) of the BOFID.

PW2 had told the Tribunal while giving evidence on Oath that the first accused could not grant loan of N50,000 and above without seeking approval from the bank’s Head Of-fice. This evidence I accept. The first accused cannot be said not to be aware or have that knowledge. He took the risk to grant the loan, when his employers got wind of what he did he was immediately placed on suspension and a month later dismissed.

That PW1 stated that a Manager has no limit in lending of facility, I believe is a mis-statement and that is rejected. I take note of evidence of defence put up by each accused person and however find none which dislodges the proofs of the crimes alleged against each one of them.

I carefully considered the issues canvassed by the learned Counsel in their address before the Tribunal. I find the rep-resentations made by the Prosecutor to be of assistance to the Tribunal as they represent the true position of the law regarding the crime alleged under the present circum-stance.”

6. It is trite law that where Mr A. uses a statutory person, that is to say a person, a creation of statute or minor, lu-natic or an insane to commit a crime, Mr A. shall be li-able for the crime committed by that person as if he committed the offence personally.

Per curiam “On the assertion that the loan was granted to a person who

is not charged to the Tribunal, it is trite law that where Mr A uses a statutory person, that is to say a person, a creation of statute or minor, lunatic or an insane to commit a crime Mr A. shall be liable for crime committed by that person as if he committed the offence personally.



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The second accused person, Alhaji Rasheed Sulaiman has been proved to be the owner and sole signatory to Polyva-lent Nigeria Limited and its account with the Oke-Ado Branch of the Nigeria Arab Bank Limited. This fact is never disputed. It follows therefore that the contention by the learned defence Counsel in this regard is misplaced and re-jected.

I find the first accused guilty of an offence prescribed under section 18(1)(b) of the BOFID No. 25 of 1991 and is hereby convicted accordingly under section 18(2) of the Banks and Other Financial Institutions Decree No. 25 of 1991.”

Accused convicted.


Nigerian Erim v State (1994) 18 ALRCN 73 FRN v Kalgo (1998) 2 FBTLR 14 Majekodunmi v The Queen (1952) 14 WACA 64

Nigerian statute referred to in the judgment Banks and Other Financial Institutions Decree No. 25 of 1991, section 18(1)

Counsel For the prosecutor: Mr Akanbi For the first accused: Mr Olojo holding brief of Mr PO Ige For the second accused: Mr Olanipekun with Mrs Olaitan

Judgment EVUTI J: The accused persons stand trial for offences of criminal conspiracy and granting an unauthorised credit fa-cility without security contrary to section 518 of the Crimi-nal Code and section 18(1)(b) of the Banks and other Finan-cial Institutions Decree (“BOFID”) No. 25 of 1991.

The first accused, Babatunde Olusegun Akinnigbagbe, was an employee of Nigeria Arab Bank Limited, now Assurance Bank as a Branch Manager at its Oke-Ado Branch, Ibadan.


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There is a company incorporated in Nigeria by name Poly-valent Nigeria Limited. The second accused is its Managing Director and its account’s sole signatory with the bank’s branch at Oke-Ado where it operated account no. 3101–80631–7.

There is a two count charge framed against the accused persons and an alternate two count charge as well, namely:–

Count 1:– That you, Babatunde Olusegun Akinnigbagbe, while being

the Branch Manager of the Oke-Ado Branch of Nigeria Arab Bank Limited and Alhaji Rasheed Sulaiman, Manag-ing Director of Polyvalent Nigeria Limited, a customer of the Bank on or about the 1 December, 1992 did commit a felony to wit, conspired together with one another to grant the sum of N11,100,000 (Eleven Million, One Hundred Thousand Naira) to Polyvalent Nigeria Limited in breach of rules and regulations of the bank thereby committed an of-fence punishable under section 516 of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 to be read in conjunction with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).


the Branch Manager of Oke-Ado Branch of Nigeria Arab Bank Limited on or about 1 December, 1992 did grant to Polyvalent Nigeria Limited a customer of the Oke-Ado Branch of the Bank an unauthorised credit facility in the sum of N11,100,000 (Eleven Million, One Hundred Thou-sand Naira) without security in breach of the rules and regulations of the bank contrary to section 18(1)(b) of the Banks and other Financial Institutions Decree No. 25 of 1991, to be read in conjunction with section 3(1)(c) of the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended).

The Alternate Counts are:– Count 3:–

That you, Babatunde Olusegun Akinnigbagbe, while being the Branch Manager of Oke-Ado Branch of Nigeria Arab Bank Limited and Alhaji Rasheed Sulaiman the Managing Director of Polyvalent Nigeria Limited on or about 1 De-cember, 1992 did commit felony to wit; conspired together


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with one another to steal the sum of N11,100,000 (Eleven Million, One Hundred Thousand Naira) property of Nigeria Arab Bank Limited thereby committed an offence and pun-ishable under section 516 of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 to be read in con-junction with section 3(1)(d) of the Failed Bank (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended), and


the Branch Manager of Oke-Ado Branch, Ibadan of Nigeria Arab Bank Limited and Alhaji Rasheed Sulaiman the Man-aging Director of Polyvalent Nigeria Limited, a customer of the bank on or about 1 December, 1992 did commit felony to wit; steal the sum of N11,100,000 (Eleven Million, One Hundred Thousand Naira) the property of the bank thereby committed an offence and punishable under section 390 of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 to be read in conjunction with section 3(1)(d) of the Failed Bank (Recovery of Debts) and Financial Mal-practices in Banks Decree No. 18 of 1994 (as amended).

When the charge was read and explained to each suspect, each understood the nature of the allegations against him.

The first accused denied the four counts. The second ac-cused also denied Counts, 1, 3 and 4 against him.

In a bid to prove his case, the prosecution called three wit-nesses who testified for him, namely Mrs Adedade Sanusi the Current Accounts Officer, of the now Assurance Bank of Nigeria Limited at Dugbe Branch, formerly of Oke-Ado Branch of the bank.

Mr Sylvester A Mgbahurika, a chartered accountant, Head of the Department of Debt Recovery and Loan Monitoring of the bank and Mr Benjamin Eleonu, an Assistant Superinten-dent of Police attached to Force CID Alagbon Close, Ikoyi at its annex at No. 255 Muri Okunola Street, Victoria Island.

The PW1 worked with the first accused who was then a Branch Manager at the bank’s Oke-Ado Branch until he was suspended and finally dismissed by the bank in 1992. She knows the first accused in that capacity and the second ac-cused as the Managing Director/Chairman of Polyvalent


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Nigeria Limited. She told the Tribunal that Polyvalent Nige-ria Limited was a customer of the bank. The second accused was the sole signatory of its account. She was aware of the transaction between the Polyvalent and the bank on the 1 December, 1992. That on the 1 December, 1992 the first ac-cused granted a loan facility to the second accused’s Poly-valent without Head office’s approval.

He gave a loan of N11,100,000 to the Polyvalent. She told the Tribunal that there was no security deposited for the credit facility.

That on the 1 December, 1992 the second accused came to the bank and as was the customer’s practice went direct to the Manager’s office. Later, the Manager came out of his office with four cheques belonging to the second accused’s company, and each cheque was an instruction to issue drafts in the sum of N1.5m, N2.6m, N2.9m and N4.1m drawn on the Nigeria Arab Bank. The cheques total N11,100,000. She identified each of the said cheques which are admitted in evidence as Exhibits 1, 2, 3 and 4.

The cheques were given effect to based on the signature and instruction of the first accused. The drafts were issued out as per instructions. She identified the four drafts issued out by the bank. They were tendered and admitted in evi-dence through the witness as Exhibits 5, 6, 7 and 8.

That as at the date these drafts were issued out, the Poly-valent account had a balance of N47,477.36 (Forty Seven Thousand, Four Hundred and Seventy Seven Naira, Thirty Six Kobo) only as per the company’s statement of account which is in evidence as Exhibit 9.

When cross-examined, the witness told the court that part of the money had been repaid back to the bank. She con-firmed a repayment of N8.1m (Eight Million, One Hundred Thousand Naira).

The owner of the cheques was Polyvalent but were signed by the second accused; that the taking away of the N11.1m (Eleven Million, One Hundred Thousand Naira) was without the authority of the bank’s Head office


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approval though the Polyvalent’s account was debited to the tune of the sum stated.

Answering a question put to her by the second accused’s Counsel, the witness confirmed being familiar with the Poly-valent’s account at Oke-Ado Branch before her transfer to Dugbe Branch. In 1992, she was an Office Trainee under the Current Accounts Department. That a Manager does not have a limit to grant any overdraft facility, but that where a Manager overdraws an account in excess of his limit, it is unauthorised facility. She knows Exhibit 10 as well as Ex-hibits 11 and 12.

PW2 knows the first accused as the Branch Manager of Oke-Ado Branch of the bank until he was summarily dis-missed for gross misconduct bordering on dishonesty, falsi-fication and disobedience to laid down instructions on the 8 February, 1993, and the second accused as the Managing Director of Polyvalent Nigeria Limited and sole signatory to the Polyvalent’s Account at Oke-Ado Branch of the bank.

He told the Tribunal that on the 1 December, 1992, the first accused on his own, without obtaining the bank’s head office approval allowed the account of Polyvalent Nigeria Limited to be overdrawn to the tune of N11,100,000 (Eleven Million, One Hundred Thousand Naira). That it was unau-thorised. That the discovery of this was when the returns were being read. That witness told the Tribunal that there was no application for the money taken from the bank. That the condition for a facility is possible if the person applies in writing especially when it involves amount from N50,000 (Fifty Thousand Naira) and above. He will be required to provide security and approval is given by the head office. In this case there was no security provided as at the time the money was taken. There was no approval for the money taken before or after the taking away of the money. That the first accused approved the said facility to the second accused company. It is not within his power to give out such a loan. He told the Tribunal that since then the loan had accrued some interests. The debt is about N20m as of today. He pro-vided the police with the relevant information regarding the


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investigations of the transactions. His statement to the po-lice though objected to for its admissibility is in evidence as Exhibit 13.

When cross-examined by the first accused’s Counsel, the witness told the Tribunal that he joined the bank in 1990. He distinguished the difference between overdrawn and over-draft. An overdraft is a loan. The present circumstance is an overdrawn. He confirmed that the Polyvalent Nigeria Lim-ited had repaid the sum of N8.1m (Eight Million, One Hun-dred Thousand Naira).

That the second accused started repayment of the sum when he was arrested and detained and it was then he de-posited two title documents of his properties which paved way for his release on bail. He told the Tribunal that the N11.1m cannot be said to be stolen money.

He responded to the second accused’s Counsel question that commission charges was the cost of the selling of the draft which is the benefit accrued to the bank. That the in-terest charged on overdrawn accounts is not as penalty.

The decision of the civil matter which was filed and dis-missed by Zone 2 (Two) of the Failed Banks Tribunal in Lagos is in evidence as Exhibit 14.

The police officer gave evidence as PW3. He told the Tri-bunal that this matter was referred to him to investigate through a letter identified and put in evidence as Exhibit 15.

That on 21 February, 1996, the second accused was ar-rested, cautioned and his statement recorded in English Lan-guage. He wrote out his statement in his own hand writing in which he confirmed that he obtained unsecured facility of N11.1m from the first accused in Oke-Ado Branch of the Nigeria Arab Bank. Exhibits 16, 16A and 16B are state-ments of the second accused.

The first accused in his statement which he wrote out to the police confirmed that he granted an unsecured facility of N11.1m to the second accused’s company when he was the Branch Manager of the Oke-Ado Branch of the bank. This was tendered and admitted in evidence as Exhibit – 17.


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The police officer’s report of his investigations and find-ings is admitted in evidence as Exhibit 18.

Under cross-examination, the witness identified the Exhib-its earlier tendered in evidence. That his investigation was of financial malpractices in bank and found an offence commit-ted under section 18(1)(b) of the BOFID.

At the close of the prosecution’s case, the learned Counsel to the accused persons chose to address the Tribunal on a no case submission.

Mr PO Ige, the learned Counsel to the first accused ad-dressed the Tribunal on a charge containing two counts ie of conspiracy to grant the sum of N11.1m in favour of Polyva-lent Nigeria Limited in breach of rules and regulations of the bank, laid under section 516 of the Criminal Code Act vide section 3(1)(d) of the Failed Banks Decree No. 18 of 1994 (as amended) and secondly of the first accused as being the Branch Manager of Oke-Ado Branch of the Nigeria Arab Bank as having granted an unauthorised credit facility in the sum of N11.1m without security in breach of the rules and regulations of the bank contrary to section 18(1)(b) of the BOFID, 1991 and section 3(1)(c) of the Failed Banks Decree No. 18 of 1994.

His contention is that the alternate counts of the charge, count three repeated conspiracy to steal N11.1m property of Nigeria Arab Bank and count four accused the two suspects of stealing the N11.1m on the 1 December, 1994.

The learned Counsel contended that throughout the presen-tation of the prosecution’s case, they did not lead any evi-dence sufficient enough to warrant the calling upon the ac-cused persons to enter their defence. He referred to section 24 of Decree No. 18 of 1994 which provides for the dis-charge and acquittal of any accused person where it is con-sidered or shown that the evidence against such an accused person is not sufficient to justify the continuation of the trial – Schedule 2 Rule 5(3)–(5).


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He listed four grounds upon which a no-case submission can be upheld, namely:– (a) That the essential ingredients of the charges or any

of them were not proved or established; (b) Where there is no legally admissible evidence before

the court to warrant the accused being called upon to enter upon his defence;

(c) That whatever evidence there is linking the accused through the testimonies of the witnesses have been totally discredited under cross-examination;

(d) That even if the prosecution’s witnesses are believed by the evidence on record, such pieces of evidence are not sufficient for an accused to come and defend himself. He referred us to the cases of:–

Okoro v State (1988) 5 NWLR (Part 94) 255 at 276–277.

Nwosu v Board of Customs and Excise (1988) 5 NWLR (Part 93) 225 at 246–247.

Edet Akpan v State (1986) 3 NWLR (Part 27) 225 at 236.

He contended further that the said rules and regulations of the Nigeria Arab Bank Limited which the prosecution pro-fess govern the grant of overdraft or credit facility was not produced before the Tribunal if any at all.

That there must be written guidelines which must be breached. He said the evidence of PW2 to the effect that any loan above N50,000 which must be proceeded with a writ-ten application is irrelevant and does not establish anything against the accused persons.

That before his evidence the laws. ie BOFID presumes that there are rules and regulations in the bank. That section 77 of the Evidence Act requires that the document be pro-duced.

He contended further that the prosecution has not estab-lished that the loan was unauthorised, that PW1 said there is


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no limit to what loan a Manager can grant shows that the grant of N11.1m can not be said to be unauthorised.

He argued that the first accused’s statement was not con-fessional as it was not endorsed by a Superior Police Officer.

Still on legal issues, he contended that it is not right for the prosecution to include a charge of conspiracy with the actual commission of the crime where there is only one evidence to prove the two counts.

That there is no evidence to prove conspiracy between the first and second accused. That all the PW1 had said was not independent evidence. He urges the Tribunal to strike out the conspiracy charge on Count 2, that the money was not stolen. That PW3 said the loan was unauthorised but there was no stealing. That there is no evidence to support counts 3 and 4.

Mr Olupona, learned Counsel who appeared for the second accused associated himself with his senior colleague. That the second accused can not be called upon to enter into his de-fence. State v Bello (1989) 1 CR LRV 370 (Notes 1, 2 and 3).

That there was no stealing. Stealing he said means perma-nent intention to fraudulent convert what is taken in where that is not established the court cannot hold that there is stealing.

Replying to the no case submissions made by the learned Counsel to the accused persons, Mr Rufai A Akanbi, the prosecutor submitted that by the wording of section 18(1)(b) of the BOFID, 1991, it provides for absolute offence. All the prosecutor needed do was to establish, that the manager granted either a loan or advance or credit facility without au-thority. 2. Where adequate security is required, it must take

priority to the grant of the facility. It follows therefore that the rules and regulations of the bank is not necessary Regina v Grimopoulos and others (1953) 20 NLR 114.

That if the accused has any such authority he can adduce same during his defence. He referred us to the case of


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Lord Chief Ifegwu and 2 others v FRN (1997) 1 FBTLR 86 at 101 where the Special Appeal Tribunal has said of section 18(1) and (1)(b) of BOFID that it is for the accused to bring himself within the exception or exemption of the rules and regulations. He contended that the evidence of PW1 to the effect that the first accused granted the loan without the ap-proval from his head office is not shakened and that the transaction was unauthorised.

He described as invalid the assertion that the charge of conspiracy to be proved by independent evidence. That the PW1 had told the Tribunal how on the 1 December, 1992 the second accused came to the bank and how the first ac-cused came into the bank hall with four cheques duly signed by the second accused and countersigned by the first ac-cused with instructions that Exhibits 5–8 be issued. He told the Tribunal to uphold that her evidence is not shakened and establishes the ingredients of the crime alleged.

He submitted that conspiracy could be inferred from the unlawful act done with the common intention.

The learned Prosecutor adopted his argument with regard the first accused’s Counsel for the second accused Coun-sel’s submission and submitted further that the offence of section 18(1)(b) can not be compounded by the Nigeria Arab Bank. That where credit facility requires security, the security must first be provided before the grant of the facil-ity.

That Exhibit 11 was written in 1996 in order to secure the release of the second accused on bail from the Police cus-tody.

Mr Ige insisted that his earlier submissions have never been displaced by the prosecutor’s reply. So also Mr Olu-pona.

The Tribunal carefully studied the submissions made by the learned Counsel for the accused persons and the response thereto by the prosecutor. The Tribunal is in agreement with the settled principles of law that a no-case


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submission can be upheld, if the essential ingredients of the charges or any of them were not proved or established:– (a) Where there is no legally admissible evidence before

the court to warrant the accused being called upon to enter upon his defence;

(b) Where evidence linking the suspect with the com-mission of the crime has been discredited by means of cross-examination; and

(c) Insufficiency of evidence adduced. The Tribunal carefully perused the nature of the allegations before it, the evidence adduced and got satisfied that prima facie case of an offence of conspiracy to grant the sum of N11.1m (Eleven Million, One Hundred Thousand Naira) to Polyvalent Nigeria Limited contrary and in breach, of the rules and regulations of the bank, an offence punishable un-der section 518 of the Criminal Code has been established against each of the accused persons. Equally made out against the first accused is a prima facie case of a grant to Polyvalent Nigeria Limited an unauthorised credit facility in the sum of N11.1m (Eleven Million, One Hundred Thou-sand Naira) without security contrary to section 18(1)(b) and punishable under section 18(2) of the Banks and Other Fi-nancial Institutions Decree, 1991.

The no-case submissions made by the learned Counsel for the accused persons were thus rejected and overruled. Each suspect was found to have a case to answer and therefore called upon to enter into their defence, if any.

On the 19 November, 1998, the first accused led by his learned Counsel Mr PO Ige gave evidence of self defence.

The first accused, Mr Babatunde Olusegun Akinnigbagbe told the court regarding his accusation of conspiracy with the second accused to grant a loan to Polyvalent Nigeria Limited that he is not guilty. He did not conspire with the second accused to grant the loan.

He denied being given any rules and regulations by the then Nigeria Arab Bank.


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On the second count that he granted an unauthorised credit facility to Polyvalent he stated that this is not true. He admit-ted that it was true that there was no collateral because it was an export financing which does not require collateral. He never denied the grant of the loan of N11.1m. He did not deny the existence of Exhibits 1–8 but that the money was not stolen. He told the Tribunal that as a Branch Manager he was not given any limit of what loan he could grant. That be-fore his appointment as a Branch Manager of the bank, he was Head of Corporate Finance in the Head office. He said his action was done in good faith and meant to get for his employer a high reputation from the Central Bank of Nigeria.

In response to the second accused’s question he said the form filled by a customer while opening an account consti-tutes relationship between customer and bank.

The Prosecutor tendered through this witness as Exhibit 19 operations manual part one for branches of Nigeria Arab Bank. He admitted that he was suspended from work be-cause of the N11.1m loan he granted. He was eventually dismissed because of the transaction.

He told the Tribunal that all the discussions leading to the grant of the N11.1m loan were verbally done.

The second accused, Alhaji Rasheed Sulaiman, said in his evidence before the Tribunal that he did not conspire with the first accused to grant loan to Polyvalent Nigeria Limited.

He admitted that he borrowed the money and never stole it. He is a Director of the Polyvalent Nigeria Limited. That on the 1 December, 1992 the Polyvalent did overdraw its account with the bank. That interest and other charges are charged on the facility.

He told the Tribunal that he surrendered his properties be-cause it was not done when he obtained the loan. He is very much aware of Exhibit 11. He denied any conspiracy be-tween him and the first accused in a reply to cross-examination by the first accused. He did not apply for the loan in writing he responded to the prosecutor’s question on cross-examination.


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He said I just approached the Manager, the first accused, I needed N11.1m and was given. He signed the cheques Exhib-its 1–4, that when he was taking the N11.1m he never depos-ited any security for it. That the two title documents were de-posited when he was arrested and in detention in 1996. He told the Tribunal that the Polyvalent’s account with the Oke-Ado Branch of the Nigeria Arab Bank was opened during the tenure of office as Branch Manager by the first accused.

In his address before the Tribunal, Mr PO Ige, learned Counsel to the first accused told the Tribunal not to attend to the alternative charges because count three overlapped with count one of the original charge and that no evidence what-soever was led on the alternative count. That the alternative count four which charges the accused persons for stealing cannot stand because of the PW2’s testimony. PW2 is the Monitoring Officer of the credit and loans who admitted when cross-examined that the money was not stolen and that N8.1m had been refunded by the second accused.

He contended that Exhibit 15 which emanated from the NDIC never stated the first accused to be investigated for any offence nor did the police report Exhibit – 18 indict the first accused for conspiracy to steal.

The investigation did not reveal that the first accused stole any money belonging to Nigeria Arab Bank but for contra-vention of section 18 of the BOFID. He referred the Tribu-nal to the decision of the case of FRN v Sanni Ali (1998) 3 FBLTR 189 at 261.

That the stealing count be struck out. Regard counts one and two the Counsel submitted that

count one which charges the two for conspiracy to grant loan to Polyvalent cannot stand side by side with count two. Not two sets of evidence is adduced to prove same. The case of Monica M v Cop (1989) 11 CRRN 92 at 100 and Ayoola v The State and FRN v Kalgo were brought into focus.

In the alternative, he argued that the two can not be charged for conspiracy because the second accused is not a customer of the Nigeria Arab Bank.


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That the first accused granted loan to Polyvalent Nigeria Limited and not to Rasheed Sulaiman. That the second ac-cused is only a servant of the Polyvalent Nigeria Limited.

He wants the Tribunal to hold that the charge has not been proved by the prosecution.

On Count Two, he contended that the prosecution has failed to prove beyond reasonable doubt that the first ac-cused breached any rules and regulations of the bank con-trary to section 18(1) of the BOFID.

That non-production of such rules and regulations of the bank breached makes the prosecution’s case unproved.

That the PW1’s evidence contradicts that of the PW2. While PW1 said there was no lending limit for the manager the second PW told the Tribunal that the Head office’s ap-proval is required for all loans for and above N50,000.

He submitted further that the collective agreement referred to by the PW2 is not tendered in evidence and Exhibit – 19. Operation Manual is strange to the first accused as he was seeing the document for the first time in the Tribunal.

He wants the said evidence and Exhibits – 19 expunged on the authority of the decision of Alade v Olukade (1976) 2 SC 183 at 186 – where inadmissible evidence is admitted the court can refuse to act on it.

That the statement of the accused persons is part of the Tribunal’s record of proceedings is not in doubt.

He, the Counsel calls for the discharge and acquittal of the first accused on all counts of the charge against him.

Mr Olanipekun, learned Counsel to the second accused as-sociated himself with the submissions of the learned Coun-sel to the first accused.

He submitted that the offence of conspiracy filed against the second accused cannot stand because he is not charged with the outcome of the said conspiracy. He cannot be found guilty of the conspiracy unless he is also found guilty of the substantive case. He referred to the case of Erim v State as well as Nnaji v I.G. Police (1957) 2 SCNLR 156.


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He contended further that the second accused is not a man-ager or official of the bank. That the requirement of security for the loan were later perfected. The new agreement there-fore supersedes the earlier agreement. The learned Counsel wants the Tribunal to believe that none of the two counts was proved and that the second accused be discharged and acquitted.

At the close of the accused person’s addresses as presented by their learned Counsel, Mr Rufai A Akanbi the prosecutor chose to reply at a later date. In his address of reply Mr Ru-fai A Akanbi, the prosecutor contended that the accused per-sons stand trial for a two count charge of conspiracy jointly under section 516 of the Criminal Code and the first accused person charged for an offence under section 18(1)(b) of the BOFID, 1991.

He submitted that to prove count one, all the prosecutor has to do is to show that there was an agreement between the first and second accused persons to do an illegal act or act that is unlawful, which is that “they conspired to grant to a Polyva-lent Nigeria Limited a facility of N11.1m without authority”.

He referred the Tribunal to the evidence of PW1, one Mrs Sanusi who testified of what transpired on the 1 December, 1992. How the second accused went into the first accused’s office and how the two brought into bank hall Exhibits 1–4 for the issuance of Exhibits 5–8.

He urges the Tribunal to infer conspiracy from the actions as well as from the statements of the accused persons them-selves – Exhibit 17 refers. That a crime of conspiracy could be inferred from overt acts, learned Prosecutor referred the Tribunal to the decided cases of Njovens and others v The State (1973) 5 SC 17 at 69 and 70 as well as of FRN v Ifegwu (1997) 1 FBTLR 43 at 80.

That conviction can be sustained for an offence of conspir-acy alone he referred us to the highlight given by Honour-able Justice Agbaje, JSC in the case of Lazarus Atano and others v Attorney-General of Bendel State (1988) 2 NWLR (Part 75) page 201 at 206.


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On Count 2, the learned Counsel told the Tribunal that all that is required here is the proof that the officer of the bank did either advance, grant credit or overdraft without author-ity of the bank. (2) Where adequate security is required for such ad-

vance, such must be obtained prior to the advance credit or loan.

He submitted that the evidence of PW1 and PW2 have suf-ficiently proved the crime alleged. He referred further to the statement of the accused persons which he wrote out him-self that after he had granted the facility, the Head Office got wind of it and he was placed on suspension.

He urges the Tribunal to disbelieve the evidence of self defence put up by each of the accused persons, and to hold that the first accused had breached the provision of section 18(1)(b) of the Banks and Other Financial Institutions De-cree No. 25 of 1991.

That the facility was given to a Polyvalent Nigeria Limited and not to the second accused personally the PWS con-tended that by virtue of section 3(3)(b) of Decree No. 18 of 1994, the second accused is liable.

After a careful study of the case for the prosecution and that of each of the accused persons and perusal of the Ex-hibits tendered in evidence, I find notable issues which are of great essence not disputed to by each of the accused per-sons. It will be recalled that at the close of the prosecution’s case, each accused led by his Counsel made a no case sub-mission on the two count charge and a two count alternative charges filed against the accused persons.

The Tribunal evaluated the evidence adduced by the PW’s with regard to the four count charge.

I considered and weighed the evidence in totality to the na-ture of the offences alleged and found, based on the legal principles of law that the counts three and four are offences which were not supported by the evidence given before the Tribunal. In other words the evidence did not prove allega-tions of offences of conspiracy to steal and of stealing


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N11.1m property of Nigeria Arab Bank Limited. This Tribu-nal at that stage was satisfied that prima facie case of an of-fence of conspiracy to grant the sum of Eleven Million, One Hundred Thousand Naira to a Polyvalent Nigeria Limited an offence punishable under section 518 of the Criminal Code had been established against each of the accused persons.

Equally made out against the first accused was a prima fa-cie case of a grant to Polyvalent Nigeria Limited an unau-thorised credit facility in the sum of N11.1m without secu-rity contrary to section 18(1)(b) and punishable under sec-tion 18(2) of the Banks and Other Financial Institutions De-cree No. 25 of 1991.

From the contents, intents and meaning of the findings, the Tribunal had directly dropped the alternate counts three and four against the accused persons. The Tribunal shall there-fore treat and consider issues canvassed regards its findings of conspiracy and the granting of the unauthorised facility to Polyvalent Nigeria Limited.

If I may briefly give highlights on the provisions of the laws offended, the crime of conspiracy is the agreement be-tween two or more persons to do an illegal act.

As to when crime of conspiracy is completely committed, I refer to the Supreme Court decision in the case of Erim v State (1994) 18 ALRCN 73 at 77. The crime of conspiracy is completely committed the moment two or more have agreed that they will do, at once or at some future time, cer-tain things. It is not necessary in order to complete the of-fence that any one thing should be done beyond the agree-ment. The conspirators may repent and stop or may have no opportunity or may be prevented or may fail. Nevertheless the crime is completed when they agreed. (See also Maje-kodunmi v The Queen 14 WACA 64 at page 88.)

Proof of conspiracy is generally a matter of inference and the inference of involvement of an accused person can be inferred from all the surrounding circumstances.

Like I stated much earlier there are issues not contested. There are the fact that the first accused was until the


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14 January, 1993, the Branch Manager of Oke-Ado Branch of the Nigeria Arab Bank Limited. 1. That he granted an unsecured facility of N11.1m to

Polyvalent Nigeria Limited without any reference to the bank’s Head Office and no approval for such grant was given by the Head Office.

2. The said loan was granted to the Polyvalent Nigeria Limited a Private Limited Liability Company solely owned by the second accused person, Alhaji Rash-eed Sulaiman based on a verbal discussion between the first and second accused persons.

3. That no collateral was offered or deposited as secu-rity for the loan granted as at the time the loan was taken in the year 1992.

To support the allegation of conspiracy between the accused persons, PW1 – Mrs Adedade Sanusi, the Current Accounts Officer of the Bank told the Tribunal that the second ac-cused is the sole signatory of Polyvalent Nigeria Limited. Polyvalent was a customer of the Bank’s Oke-Ado Branch with Current Account No. 3101–80631–7. That the second accused on the 1 December, 1992 came to the bank and went straight to the Manager’s office. Later on the Manager came from his office with four cheques (Exhibits 1–4 refer) belonging to the second accused.

On the cheques were instruction to issue drafts for the sums of N1.5m, N2.6m, N2.9m and N4.1m drawn on the Nigeria Arab Bank. The cheques were given effect to based on the signature and instruction of the first accused, then the Branch Manager of the bank.

She told the Tribunal that as at the time of this transaction the outstanding credit balance on the Polyvalent’s account was N47,477.36k (Forty Seven Thousand, Four Hundred and Seventy Seven Naira, Thirty Six Kobo).

That the first accused gave a loan facility of N11.1m to the Polyvalent without approval by the authority of the bank. There was also no formal application for the loan by the Polyvalent or the second accused. There was also no secu-rity deposited for the credit facility.


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The first accused, Babatunde Olusegun Akinnigbagbe never denied these assertions in his evidence or defence be-fore the Tribunal. In fact in his statement to the police Ex-hibit – 17, he said on his transfer to Oke-Ado Branch he had to scout for good and credible corporate customers and as-sisting them financially thereby enabling their business to grow while the Branch also grow in profitability in terms of receipts of high interest and COT receipts. The firm of Poly-valent Nigeria Limited was considered one of such credible corporate customers. The company was engaged in Export of Cocoa. Its Managing Director, Alhaji Rasheed Sulaiman was considered a respectable and responsible citizen in Ibadan, Oyo State, having engaged in the business for a long time. After my discussion with him we agreed that the busi-ness is seasoned in nature, lasting for a period of three months during which cocoa is shipped abroad.

During this period a large sum of money is required at short notice. Later at the close of shipment season, remit-tances in U.S. Dollars were usually made to the company with which the Bank financial assistance ought to be repaid. When I considered the personality status of the Managing Director, the viability of his export business and the foreign exchange advantage to the economy of the nature which needed diversification I decided to take the risk of assisting the company. However, at the peak of the season the Head Office got wind of the transaction and I was placed on sus-pension on the 14 December, 1992. (Italics mine.)

Immediately the customer got wind of this suspension he fraudulently changed his mind and refused to pay back into his account remittances he received from his overseas part-ners. I was dismissed exactly one month after on the 14 January, 1993.

In the said statement he, the first accused admitted that as at December, 1992, the Managing Director of Polyvalent was granted a sum of N11.1m which the Head Office was not informed and no collateral was collected.

I find this to be the best of evidence that can be offered. The accused never denied the transaction between him and the second accused.


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It follows therefore that the crime of conspiracy could be inferred from the unlawful act done with the common inten-tion. It has to be stated here that the second accused never denied taking the said loan of N11.1m in the name of his company. He insisted that it was a loan. He never stole the money.

On whether there should be an independent evidence to prove the crime of conspiracy? To this I say no and that proposition is refused and rejected. I accept the admissions of the accused persons as regard transactions. I also accept the evidence of PW1 in this regard.

I find the crime of conspiracy against each accused estab-lished beyond reasonable doubt. Each accused person is therefore found guilty on count one and is hereby convicted accordingly. Granting Unauthorised Loan:–

The ingredients of this offence as disclosed in section 18(1) of the Banks and Other Financial Institutions Decree No. 25 of 1991 are:– (1) The accused must be a Manager, Director or any

other officer of a Bank. (2) That there was a credit facility granted. (3) That the credit must have been unauthorised. (4) The facility must be unsecured or inadequately se-

cured. (5) The security must be obtained prior to the granting

of the facility. As envisaged by section 18(1) the security deposited must be a condition precedent to the grant of the facilities rather than being subsequent to the grant – per Momoh, J in FRN v Kalgo (1998) 2 FBTLR 14 at page 46.

It is therefore not premature to state here that deposit of two title documents in respect of the second accused proper-ties via Exhibit 11 does not meet the requirement of section 18 of Decree No. 25 of 1991.


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The first accused person Babatunde Olusegun Akinnig-bagbe who stands trial for this count is no doubt, was the Branch Manager of Oke-Ado Branch of the Nigeria Arab Bank Limited until on the 14 December, 1992 when he was placed on suspension and subsequently dismissed by the bank on the 14 January, 1993.

The accused never denied granting a credit facility of N11.1m to Polyvalent Nigeria Limited. The beneficiary of the facility did accept and confirmed.

That the facility granted was unauthorised is true. The first accused knew very well that he ought to get the approval of his Head Office before he can disburse such a facility. There was no application for the loan but just granted based on verbal discussion with the second accused. He admitted to the committal of this offence when he wrote to the police that “I decide to take the risk of assisting the company”. 4. The facility was unsecured PW1’s evidence did as-

sert so and confirmed by the testimonies of both the first and second accused persons, and lastly there was no security obtained for the facilities at all as at the time the purported loan was granted.

I may have to state here why the suspects were saved of the charges for stealing of the sum involved. Entry for the arbi-trary grant of the said facilities, was entered into the Polyva-lent’s ledgers accordingly. This I consider the only saviour.

On the argument put up by the Defence Counsel that the non-production of the rules and regulations of the bank is fatal to the prosecution’s case to this I disagree based on the evidence of PW2 and the stipulation of section 18(1) of the BOFID.

PW2 had told the Tribunal while giving evidence on Oath that the first accused could not grant loan of N50,000 and above without seeking approval from the bank’s Head Of-fice. This evidence I accept. The first accused cannot be said not to be aware or have that knowledge. He took the risk to grant the loan, when his employers got wind of what he did he was immediately placed on suspension and a month later dismissed.


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That PW1 stated that a Manager has no limit in lending of facility, I believe is a mis-statement and that is rejected. I take note of evidence of defence put up by each accused person and however find none which dislodges the proofs of the crimes alleged against each one of them.

I carefully considered the issues canvassed by the learned Counsels in their address before the Tribunal. I find the rep-resentations made by the Prosecutor to be of assistance to the Tribunal as they represent the true position of the law as regard the crime alleged under the present circumstance.

The offence for which the first accused stand charged that is breach of the provision of section 18(1)(b) of BOFID No. 25 of 1991 is an absolute crime. I agree that all that is re-quired to prove the crime are as presented by the Prosecutor which is in line with provision of section 18(1)(b) BOFID as highlighted earlier.

On the assertion that the loan was granted to a person who is not charged to the Tribunal, it is trite law that where Mr A. uses a statutory person, that is to say a person, a crea-tion of statute or minor, lunatic or an insane to commit a crime Mr A. shall be liable for crime committed by that per-son as if he committed the offence personally.

The second accused person, Alhaji Rasheed Sulaiman has been proved to be the owner and sole signatory to Polyvalent Nigeria Limited and its account with the Oke-Ado Branch of the Nigeria Arab Bank Limited. This fact is never disputed. It follows therefore that the contention by the learned defence Counsel in this regard is misplaced and rejected.

I find the first accused guilty of an offence prescribed un-der section 18(1)(b) of the BOFID No. 25 of 1991 and is hereby convicted accordingly under section 18(2) of the Banks and Other Financial Institutions Decree No. 25 of 1991.

Mr Akanbi – We are happy with the candid judgment. I have an application to make under the provisions of the De-cree. The Decree allows and permits the Tribunal to make an order as per section 20 of the Decree.


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Section 20(2) as amended – The Tribunal may order for the confiscation.

In the course of trial evidence was laid to show that secu-rity were later deposited by the second accused person, two title deeds:– 1. In the name of the second accused. It is situated at

Ologede Village off Old Lagos – Ibadan Road, Ibadan in Oluyole Local Government Area of Oyo State Plan No. AJ/OY/37/39 and registered as No. 5 at page 5 in Vol. 3144 of the Land Registry Office, Ibadan; and

2. Property – Property situated off Ife Road, Egbeda, Ibadan marked and delineated by Plan No. AF/OY/92/074 and registered as No. 46 at page 46 in Vol. 3045 of the Land Registry Office, Ibadan.

Under section 20(2) as amended, the Tribunal can order for the confiscation of these two landed properties.

Additional under section 20(4)(a) the Court has the power in making the order that the properties be forfeited to the bank that suffers the loss, in this case the bank is Nigeria Arab Bank Limited, now known as Assurance Bank Limited.

I urge the Court to so order in accordance with section 20 of Decree No. 18 of 1994.

Court – Any known records of previous convictions about the convicts.

Mr Akanbi – There is no known record of convictions on any of the convicts.

Mr Olanipekun – I commend the hard work of the Hon-ourable Judge. That this judgment is got so instantly.

I submit that the prosecutor’s application is premature. The provision of law cited is the word “may” – He can only do or ask for this by motion. The court has to be sure of what amount is involved.

Court – I have listened to the application verbally made by the learned Prosecutor as regard the Tribunal’s powers as provided for under section 20(2) of the Failed Banks Decree No. 18 of 1994.


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I find it necessary to reserve this ruling for now. It shall be given at a later date to be fixed.

Mr Olanipekun – It is good for us that the ruling is re-served. I have consulted my client Alhaji Rasheed Su-laiman, and we have agreed to voluntarily surrender the two properties described above in line with provision of section 25 of the Decree and the said properties and as covered by Exhibit 11. The particulars are as per the description given by the Prosecutor.

Mr Akanbi – I have no objection to the proposal. Court – The voluntary surrender of the second accused

properties describe as:– (1) Property situated at Ologede Village off Old Lagos –

Ibadan Road, Ibadan in Oluyole Local Government Area of Oyo State covered by statutory Certificate of Occupancy No. AJ/OY/37/39 and registered as No. 5 at page 5 in Vol. 3144 of the Land Registry Office, Ibadan, the said property in the name of Gafar Bayo Rasheed of N6/32 Fajuyi Road, Ibadan; and

(2) Property in the name of Alhaji Rasheed Idowu Su-laiman of Maito Lodge, Anfani Layout, Ibadan, Oyo State situate off Ife Road, Egbeda, Ibadan covered by Deed of Assignment No. AF/OY/92/074 and reg-istered as No. 46 at page 46 in Vol. 3045 of the Land Registry Office, Ibadan – are accepted by the Tribu-nal.

I order and direct the receivers of the Nigeria Assurance Bank Limited ie the Nigeria Deposit Insurance Corporation to take possession of these properties immediately and to arrange and sell same by whatever means whatever is left being the indebtedness of the convict should be paid to the Assurance Bank. If anything is left over from the proceeds of such a sale it should be returned to the convict thereafter after deducting expenditures incurred in the process.

Mr Olojo – I from the bottom of heart acknowledge the appreciation expressed by my colleagues for the skill put into this trial.


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My allocutus is of two folds one is legal ground and other extra legal grounds.

The legal consideration, the law grants the court an infalli-ble discretion to impose a fine as against imprisonment in a case of this nature.

Section 382 of the Criminal Procedure Act – Court may impose fine in lieu of the imprisonment. Regard the first count – penalty to a sentence. There is no option of fine. I submit that the Court invoke the powers granted under sec-tion 382 of the Criminal Procedure Act.

On Count two – The penalty is 3 years or N100,000 fine. The Court has a discretion to elect whether to sentence to imprisonment or a fine. There is no doubt that the Court will want to know such circumstance that may gather to justify the Court’s exercise of discretion of fine. I give these facts to serve as persuasive facts that a fine will accord with jus-tice of the matter than a sentence.

The first is that the convict is a first offender. He is 54 years old and a widower at that with seven children for whom he has responsibilities to cater and direct in life.

I urge the Court to observe that a further incarceration by nature of imprisonment will affect the lives of these children who have no choice of who their father could be and no mother as a substitute.

From the evidence before the Court it has been established that the convict had no reward or benefit from the transac-tion that gave rise to the charges.

On the contrary, the convict has lost his job and only means of livelihood. The convict holds an M.A. in Business Administration and his conviction now constitutes a slap on his dignity which he will carry all through his life. I urge the Court to find as being adequate where fine is imposed.

I submit that the dimension of the first convict is one of repentance and regret for having been stupid.

I appeal to the Court to temper justice with mercy and to show that mercy to the accused. I urge the Court to grant a fine.


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Mr Olanipekun – I will follow the pattern of my friend for the first Convict.

On the legal issue, I submit that sentence is regulated by the law. The present section of the law allows the Court to impose fine as per section 382 of the Criminal Procedure Act. I urge the Court to consider the true circumstances of the second convict and pray the Court not to impose custo-dial sentence, the Court has discretion to impose fine in lieu of sentence to imprisonment.

The convict has willingly surrendered his two properties in bid to offset the balance he is still owing.

The second convict is 60 years old. The bread winner of the family consisting of aged mother, and 19 children. This matter has caused the collapse of his business. I urge the Court to be considerate and humane and not to allow the law to take full vengeance on the convict.

Court – I listened carefully and patiently to the plea made by each of the learned Counsel on behalf of the convicts. I take note and considered very well the nature and circum-stances of the offence committed. I am not also unmindful of the fact that the convicts are first offenders and the dis-cretional power a Court can take advantage of as provided for under section 382 of the Criminal Procedure Act (“CPA”) in a situation of this nature where the law provided for punishment of imprisonment without providing for an option of fine.

Personally, I take into consideration of the fact that the convicts have been in and out of incarceration either in the police custody or prison since the commencement of this matter in 1996 and particularly as from the 24 August, 1998 till date. I am aware of the voluntary surrender of the two titled properties by the 2nd Convict. All these I have at the back of my mind in imposing this sentence.

On the first count:– The convict – Babatunde Olusegun Akinnigbagbe, is sen-

tenced to two years imprisonment with an option of N50,000 (Fifty Thousand Naira) fine.


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The second convict – Alhaji Rasheed Sulaiman is sen-tenced to serve a jail term of two years with an option of N60,000 (Sixty Thousand Naira) fine.

On the second count, the convict Babatunde Olusegun Ak-innigbagbe is sentenced to serve a jail term for two years or pay a fine of N40,000 (Forty Thousand Naira).

Sentences are to run concurrently.

[1999] 9 N.B.L.R. (FAILED BANKS TRIBUNAL, ZONE IV, LAGOS)


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Commercial Bank of Africa Ltd v Lati Alagbada and Sons Ltd and another

FAILED BANKS TRIBUNAL, ZONE IV, LAGOS EDOKPAYI J Date of Judgment: 20 JANUARY, 1999 Suit No.: FBFMT/L/ZIV/208/M1/97

Banking – Debt – When does cause of action arise in a banker/customer relationship – When repayable Evidence – Not challenged or contradicted – Deemed to have been admitted Judgment and Orders – In default of appearance – When given

Facts This is a Ruling on a Motion on Notice filed on 20 October, 1998 by Godwin Esene, Esq. on behalf of the applicant Bank against the respondents wherein he prayed for the fol-lowing orders viz:– “(i) An order entering final judgment in favour of the applicant

against the respondents in the sum of N1,171,452.56 as at 30 June, 1998, and interest thereon at 21% per annum from 1 July, 1998 until full payment for default of the respon-dents to file an appearance and/or reply in this action.

(ii) An order for sale of the landed properties situate at Plot 43 Alhaji Y.I. Badiru Layout (L508) Bodija Area of Ibadan and the landed property at Idi Obi off Ajia Road, Ibadan, both registered as 2/28/2855 and 60/60/3094 respectively which were used as securities by the respondents in this matter in satisfaction of the sum of N1,171,453.56 being the amount outstanding against the respondents as at the 30 June, 1998.”

The respondents were duly served all the processes in the suit, but they failed, refused and/or neglected to react to the claim, hence the applicant brought this application.

Held – 1. By the nature of our adversary system, unchallenged

evidence must be accepted as being correct and true.


Commercial Bank of Africa Ltd v. Lati Alagbada and Sons Ltd 73

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2. A debt is repayable either on demand or on notice given or upon any other condition agreed upon by the parties.

3. It is an implied term in the relationship between a banker and a customer that a cause of action does not arise unless and until there has been a demand or notice given.

4. Judgment in default of appearance is ordinarily given in the following cases viz:–

(1) Where the plaintiff’s claim is for a debt or liquidated demand only, the Tribunal can enter judgment for a sum not exceeding the amount claimed in the Writ of Summons and in the instant case, the Application for the Recovery of Debt.

(2) Where the claim is for damages or detinue. (3) Where the claim is for recovery of land. (4) Where the claim is for mesne profits or arrears of

rent in respect of premises claimed or any part of them.

In the instant case, the respondents have filed no motion for extension of time within which to enter appearance, judgment therefore ought to be entered against them.

Application granted.


Nigeria Akilluli v Ayo-Odugbesan (1992) 8 NWLR (Part 288) 177 Angyu v Malami (1992) 9 NWLR (Part 264) 242 Egbuna v Egbuna (1989) 2 NWLR (Part 106) 773 Ishola v Societe Generale Bank (1997) 47 LRCN 336 Lijadu v Lijadu (1991) 1 NWLR (Part 169) 627 National Bank of Nigeria Ltd v Guthrie Nigeria Ltd (1993) 3 NWLR (Part 284) 643 Nigerian Airways Ltd v Ahmadu (1991) 6 NWLR (Part 198) 492



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Foreign Joachimson v Swiss Bank Corporation (1921) 1 All ER 92 Lloyds Bank Ltd v Margolis (1954) 1 All ER 734

Counsel For the applicant: Godwin Esene, Esq.

Judgment EDOKPAYI J: This is a Ruling on a Motion on Notice filed on 20 October, 1998 by Godwin Esene, Esq. on behalf of the applicant Bank against the respondents wherein he prayed for the following orders viz:– “(i) An order entering final judgment in favour of the applicant

against the respondents in the sum of N1,171,452.56 as at 30 June, 1998, and interest thereon at 21% per annum from 1 July, 1998 until full payment for default of the respon-dents to file an appearance and/or reply in this action.

(ii) An order for sale of the landed properties situate at Plot 43 Alhaji Y.I. Badiru Layout (L508) Bodija Area of Ibadan and the landed property at Idi Obi off Ajia Road, Ibadan, both registered as 2/28/2855 and 60/60/3094 respectively which were used as securities by the respondents in this matter in satisfaction of the sum of N1,171,453.56 being the amount outstanding against the respondents as at the 30 June, 1998.

(iii) And for such further or other orders as the Honourable Tri-bunal may deem fit to make in the circumstances.”

In moving the application, Mr Esene, applicant’s Counsel submitted that it was brought pursuant to Order XXXIX Rule 3 of the Federal High Court (Civil Procedure) Rules, 1976 and under the inherent jurisdiction of the Tribunal. He sub-mitted that the motion was supported by a 12 paragraph affi-davit and 5 Exhibits, namely, Exhibits CBA–CBA5. He re-lied on all the averments and Exhibits. He referred to Exhibit CBA 1, the statement of account which put the indebtedness of the respondents at N1,171,452.56 as at 30 June, 1998 as well as the letter of demand, Exhibit CBA 2. He also referred to Exhibit CBA 3 which was the letter of admission. Learned Counsel then begged to move the application.


Edokpayi J


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Both the certified copies of the application for the recovery of debts filed on 24 November, 1997 and the Notice of Pres-entation of the application for the recovery of debts were served on the respondents on 3 September, 1998 but they failed to enter appearance as they were enjoined to do under the provisions of Schedule 1, paragraphs 5(2) and 7 of the Rules of Procedure for the recovery of debts at the Tribunal and in accordance with the provision of paragraph 8, the in-stant Motion on Notice was served on the respondents through the Tribunal’s Notice Board.

The relevant paragraphs of the affidavit in support of the application are as follows:– “3. That this action was instituted against the respondents

herein to recover debt in the sum of N1,049,021.13 owed the applicant by the respondents together with interest at 21% per annum as at 28 February, 1997 with interest con-tinuing to accrue thereon at the current rate of 21% per an-num.

4. That since the service of the application for the recovery of debt in this action on the respondents by the bailiff of this Honourable Tribunal, the respondents have neither entered appearance nor filed a defence to the action.

5. That since the filing of the application for the recovery of debt in the action, the respondents have made a total pay-ment of N100,000 to the applicant in satisfaction of part of the indebtedness owed the applicant by the respondents.

6. That despite the payment referred to in paragraph five (5) above, the indebtedness of the respondents as at 30 June, 1998, amounted to N1,171,453.56 (a copy of the first re-spondent’s statement of account is hereby attached herewith and marked Exhibit CBA 1).

7. That on the 13 June, 1997, the applicant caused it’s Solici-tors to write a letter of demand to the respondents to pay the applicant their indebtedness which as at 28 February, 1997, stood at N1,049,021.13 (a copy of the said letter of demand served on the respondents is hereby marked Exhibit CBA 2).

8. That by a letter dated the 10 December, 1996, written by the respondents to the applicant, the respondents admitted ow-ing the applicant for the amount claimed, but pleaded for time within which to settle same. The said letter dated the


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10 December, 1996, written by the respondents to the ap-plicant is hereby attached and marked Exhibit CBA 3.

10. That I verily believe that the respondents have no defence to the applicant’s claims.

11. That I am informed by Godwin Esene, Esq. of Counsel to the applicant and I verily believe same that the purport of this affidavit is to enable this Honourable Tribunal to enter final judgment in favour of the applicant against the re-spondents in default of Appearance and/or reply.”

These averments are very germane to the instant application but were never contradicted by the respondents. They are by the nature of our adversary system, deemed to have been admitted as unchallenged evidence and the court and in-deed, this Tribunal must accept them as being correct and the truth thereof. (See: (1) Egbuna v Egbuna (1989) 2 NWLR (Part 106)

773; (2) Lijadu v Lijadu (1991) 1 NWLR (Part 169)

627 at 649.) Exhibit CBA 1 is the statement of account of the respon-dents, which put their indebtedness at N1,171,453.56 at 31 July, 1998. Exhibit B is the letter of demand from the appli-cant’s Solicitor, Law O. Akhidenor, Esq. Exhibit CBA 3, dated 10 December, 1996 is the letter of admission of the indebtedness wherein the second respondent pleaded for ex-tension of time within which to pay and signed on behalf of the first respondent. Exhibit CBA 4 and CBA 5 are relevant to prayer 2 of the motion and which has since been with-drawn by the applicant’s Counsel.

It is trite law that a debt is repayable either on demand or on notice given or upon any other condition agreed upon by the parties. (See (1) Alhaji Aminu Ishola v Societe Generale Bank

(1997) 47 L.R.C.N. 336; (2) Lloyds Bank Ltd v Margolis and others (1954)

1 All ER 734 at 748; (3) Joachimson v Swiss Bank Corporation (1921)

1 All ER 92 at 99.)


Edokpayi J


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It is an implied term in the relationship between a banker and a customer that a cause of action does not arise unless and until there has been a demand or notice given. (See An-gyu v Malami (1992) 9 NWLR (Part 264) 242 at 252.) The letter of demand in this case was ignored by the respondents.

It is trite law that judgment in default of appearance is or-dinarily given in the following cases viz:– (1) Where the plaintiff’s claim is for a debt or liquidated

demand only, the Tribunal can enter judgment for a sum not exceeding the amount claimed in the writ of summons and in the instant case, the application for the recovery of debt.

(2) Where the claim is for damages or detinue. (3) Where the claim is for recovery of land. (4) Where the claim is for mesne profits or arrears of

rent in respect of premises claimed or any part of them.

See the following cases viz:– (1) Akilluli v Ayo-Odugbesan (1992) 8 NWLR (Part

288) 177 at 188–189; (2) Nigerian Airways Ltd v Ahmadu (1991) 6 NWLR

(Part 198) 492 at 497–498; (3) National Bank of Nigeria Ltd v Guthrie Nigeria Ltd

(1993) 3 NWLR (Part 284) 643. The respondents have filed no motion for extension of time within which to enter appearance. In my view, the respon-dents have no defence, whatsoever to the suit filed against them and I so agree with Godwin Esene, Esq. applicant’s Counsel.

Consequently, I hereby order as prayed in Prayer 1 only, and find the respondents liable, jointly and severally, to the claim filed against them by the applicant.

Accordingly, I hereby enter final judgment in favour of the applicant against the respondents, jointly and severally in the sum of N1,171,453.56 at the interest rate of 21% per annum from 1 July, 1998 in default of entering appearance to the


Edokpayi J


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suit. I further order that the respondents shall jointly and severally pay the said sum to the applicant not later than 7 days from today. The respondents shall pay N1,000 as costs in favour of the applicant. Prayer 2 having been withdrawn is hereby struck out.

[1999] 9 N.B.L.R. (FEDERAL HIGH COURT, KANO DIVISION)

Nigeria Deposit Insurance Corporation v. Nigeria Industrial 79

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Nigeria Deposit Insurance Corporation v Nigeria Industrial Development Bank Ltd and others

FEDERAL HIGH COURT, KANO DIVISION SENLONG J Date of Judgment: 20 JANUARY, 1999 Suit No.: FHC/K/CS/20/98

Failed Bank – Meaning of, section 29 Failed Banks Decree No. 18 of 1994 (as amended) Failed Bank – NDIC acting on behalf of a bank that is not a failed bank – Whether permissible Locus Standi – NDIC acting on behalf of a bank that is not a failed bank – Whether permissive – Sections 4(h), 5(1)(a), 15(1)(a) and (c) Nigeria Deposit Insurance Corporation Act Cap 301 Laws of the Federation of Nigeria, 1990 NDIC – Acting on behalf of a bank that has not failed – Whether permissible – Section 4(h), 5(1)(a), (b) and (c) Ni-geria Deposit Insurance Corporation Act Cap 301 Laws of the Federation of Nigeria, 1990 Words And Phrases – Failed Bank – Definition of – Section 29 Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Decree No. 18 of 1994 as amended by section 7 of Failed Banks (Recovery of Debts) and Financial Malpractices in Banks (Amendment) Decree No. 18 of 1995 Facts On 12 March, 1998 the plaintiff herein, acting for Bank of the North Limited took out a writ of summons against the defendants claiming the following reliefs:– “(i) A Declaration that the sale of the third defendant’s fixed

and floating assets carried out by the first defendant through the second defendant to the fourth defendant is null, void and of no legal effect whatsoever.

(ii) An Order setting aside the Orders of this Honourable Court made on the 14 July, 1997 in that the said Orders were ob-tained by fraud, misrepresentation and failure to disclose the terms and conditions contained in the Mortgage Deben-ture between the plaintiff and third defendant.



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(iii) An Order setting aside the sale of the fixed and floating assets of the third defendant by the first defendant acting through the second defendant to the fourth defendant in that the sale was conducted when a Motion for Stay of execu-tion of the judgment of this Honourable Court was pending before the Court of Appeal Kaduna Division.

(iv) An Order directing the first and second defendants to give a detailed account of the sale of the fixed and floating assets of the third defendant conducted by its servants, agents, and privies on or about the 31 December, 1997 which sale was effected to the fourth defendant.”

On 23 June, 1998 and 29 July, 1998, the first and second de-fendants respectively filed separate notice of preliminary ob-jection. The crux of the two objections is that the plaintiff herein is incompetent and lacks the locus standi to act for Bank of the North Limited as it can only act for failed Banks and that Bank of the North Limited is not a failed Bank.

Learned Counsel for the plaintiff referred to section 7 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks (Amendment) Decree 1995. She submitted that the management and control of Bank of the North Ltd is in the hands of the plaintiff but that that is a question of fact, which cannot be determined at this stage of the proceedings but only during trial of the substantive claim when evidence will be led. She referred to the definition of “Failed Banks” under section 7 of the Failed Banks (Recovery of Debts) and Finan-cial Malpractices in Banks (Amendment) Decree, 1995 and submitted that “Failed Bank” is not limited only to banks listed in Exhibit A annexed to the second defendant’s affida-vit in support of his objection but includes any bank whose management and control has been taken over by the Central Bank of Nigeria or the plaintiff.

She contended that the plaintiff had locus standi to act for the Bank of the North Ltd.

The following relevant provisions of the NDIC Cap 301 Laws of the Federation of Nigeria, 1990 were considered:–

Section 4(h) of the Act provides thus:– “The Board shall have power to serve notice on an insured bank of its intention to remove the bank from its record of insured banks



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after a cease and desist order has been issued and after three con-secutive warnings to improve the insured bank operational stan-dard and it has failed to do so.”

Section 5(1)(a) reads as follows:– “The Corporation shall have responsibility for insuring all deposit li-abilities of licensed banks and such other financial institutions operat-ing in Nigeria within the meaning of sections 20 and 26 of this Act so as to engender confidence in the Nigerian banking system.”

Section 15(1)(a), (b) and (c) of the Act provides as follows:– “As from the commencement of this Act:–

(a) all licensed banks and such other financial institutions in Nige-ria engaged in the business of receiving deposits shall be re-quired to insure their deposit liabilities with the Corporation;

(b) any licensed bank or such other financial institution which contravenes the provisions of paragraph (a) of subsection (1) of this section shall be guilty of an offence and liable on conviction to a fine of one thousand Naira for each day the offence is committed;

(c) all licensed banks or such other financial institutions in ex-istence and carrying on business before the commencement of this Act shall comply with the provisions of this Act.”

Held – 1. Going by sections 4(h), 5(1)(a), 15(1)(a), (b) and (c) of

the Nigeria Deposit Insurance Corporation Act Cap 301 Laws of the Federation of Nigeria, 1990 there is nothing to suggest in any way that the NDIC can act for and on behalf of any licensed insured bank which has not failed.

It may be true that the plaintiff has some supervisory powers over licensed banks to ensure good and safe banks operations but there is nothing in the Act giving the plaintiff a general meddlesome role in the affairs of a licensed bank that has not been declare a failed bank.

2. By the provision of section 29 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) by section 7 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks (Amendment) Decree, 1995, a “Failed Bank” means a bank or other financial institution whose licence has been revoked or which has been



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declared closed, or is placed under receivership or the con-trol and management of which has been assumed by the Central Bank of Nigeria or the Nigeria Deposit Insurance Corporation or whose capital to risk weighted assets ratio is below such minimum percentage as may be prescribed from time to time by the Central Bank of Nigeria or such other appropriate regulatory authority and includes a bank which may otherwise be described as failed by the Central Bank, Nigeria Deposit Insurance Corporation of Nigeria or such other appropriate regulatory authority.

3. Per curiam “In the instant case there is no evidence before me that the

licence of Bank of the North Ltd has been revoked or that the bank has been declared closed or that it has been placed under receivership. Similarly, there is no evidence before me that the control and management of Bank of the North Ltd has been assumed by the Central Bank of Nigeria or the plaintiff nor is there any evidence that its capital to risk weighted assets ratio is below the minimum prescribed by the Central Bank or any regulatory authority. In the circumstance I find no evidence that Bank of the North Ltd is a failed bank and not being a failed bank, I find no legal basis for the plaintiff to act for it in this case. Bank of the North Ltd is a legal entity that can sue and be sued and having regard to the averment in paragraph 5 of the Statement of Claim that the Deed of Mortgage Deben-ture was between Bank of the North Ltd and the third defen-dant. I am of the view that Bank of the North Ltd can maintain an action therein in the name.”

4. For a party to have locus standi to maintain an action, it must disclose a right in the matter. In the instant case the plaintiff has not shown that it has a legal right to be pro-tected, hence it has no locus standi to institute this action.

Objection sustained.


Nigerian Ogunsanya v Dada (1992) 4 SCNJ 162 Thomas v Olufosoye (1986) 1 NWLR (Part 18) 669



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Nigerian statutes referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks (Amendment) Decree No. 18 of 1995, section 7 Nigeria Deposit Insurance Corporation Act Cap 301 Laws of the Federation of Nigeria, 1990, sections 4(h), 5(1)(a), 15(1)(a), (b) and (c)

Counsel For the plaintiff: A. Adefarasin, Miss For the first defendant: A.B. Adebayo, Esq. For the second defendant (applicant): F.U. Ibanga, Esq. For the third defendant: K. Obayelu (Mrs)

Judgment SENLONG J: On 12 March, 1998 the plaintiff herein, acting for Bank of the North Limited took out a writ of summons against the defendants claiming the following reliefs:– “(i) A Declaration that the sale of the third defendant’s fixed

and floating assets carried out by the first defendant through the second defendant to the fourth defendant is null, void and of no legal effect whatsoever.

(ii) An Order setting aside the Orders of this Honourable Court made on the 14 July, 1997 in that the said Orders were ob-tained by fraud, misrepresentation and failure to disclose the terms and conditions contained in the Mortgage Deben-ture between the plaintiff and third defendant.

(iii) An Order setting aside the sale of the fixed and floating as-sets of the third defendant by the first defendant acting through the second defendant to the fourth defendant in that the sale was conducted when a Motion for stay of execution of the judgment of this Honourable Court was pending be-fore the Court of Appeal Kaduna Division.

(iv) An Order directing the first and second defendants to give a detailed account of the sale of the fixed and floating assets of the third defendant conducted by its servants, agents, and privies on or about the 31 December, 1997 which sale was effected to the fourth defendant.”


Senlong J


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On 23 June, 1998 and 29 July, 1998, the first and second defendants respectively filed separate notice of preliminary objection. The crux of the two objections is that the plaintiff herein is incompetent and lacks the locus standi to act for Bank of the North Limited as it can only act for failed Banks and that Bank of the North Limited is not a failed Bank.

Arguing his objection, learned Counsel for the first defen-dant contended that the plaintiff lacks the competence to act for Bank of the North Limited under the NDIC Act CAP 301 Laws of The Federation of Nigeria, 1990. He argued that the plaintiff can only act for failed Banks by virtue of section 28(1) of the NDIC Act. He submitted that Bank of the North Limited is not a failed bank under the Failed Banks (Recov-ery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994. He referred me to section 29 of the said De-cree. He submitted that Bank of the North Ltd is not one of the banks listed as failed banks in Gazette No. 4 Vol. 35 of 16 January, 1998. He submitted further that assuming, with-out conceding, that Bank of the North Ltd is a Failed Bank it is the Failed Banks Tribunal that has jurisdiction to hear this matter by virtue of section 3(1)(a) and section 3(2)(c) of De-cree No. 18 of 1994. He urged me to dismiss this suit.

Arguing his objection, learned Counsel for the second de-fendant relied on the 9 paragraph affidavit in support of his objection. He associated himself with the submissions of learned Counsel for the first defendant. In addition, he re-ferred to the powers of the Board of the plaintiff set out in section 4(a–h) and section 5(a)–(e) of the NDIC Act. He submitted that by the combined effect of sections 12, 28 and 29 of Decree No. 18 of 1994 (as amended) the plaintiff can-not act for Bank of the North Limited. He argued that by Exhibit A annexed to the affidavit in support of the Notice of Objection and the averments in the affidavit which have not been controverted, Bank of the North Ltd is not a failed bank and that therefore the plaintiff lacks the locus standi to act for it. He urged me to dismiss the suit on the authority of Ogunsanya v Dada (1992) 4 SCNJ 162 at 168.


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Opposing the objections, learned Counsel for the third de-fendant urged me to discountenance the submissions of Counsel for the first and second defendants on the issue of Bank of the North Ltd not being a failed bank. She conceded that Bank of the North Ltd is not a failed bank but submitted that the central issue for determination is whether the plain-tiff can act for Bank of the North Ltd under the NDIC Act CAP 301 Laws of the Federation of Nigeria, 1990. She sub-mitted that the plaintiff has responsibility to act for all li-censed banks whether failed or not, and that a licensed bank is one that has its insurable deposit secured or insured with the plaintiff as defined in section 5(1)(a) of CAP 301 Laws of the Federation of Nigeria, 1990. She argued that section 28(1) of CAP 301 comes into play or operation only when a bank becomes a failed bank and that is when the plaintiff acts as a Receiver of the failed bank but that by the com-bined effect of section 4(h), section 5(1)(a) and section 15(1)(a), (b) and (c) the plaintiff can act for and on behalf of a licensed insured bank which has not become failed. She submitted that by paragraph 18 of the statement of claim the plaintiff has established its legal right or interest in the suit and therefore has locus standi to institute this action.

Also opposing the objections, learned Counsel for the plaintiff referred to section 7 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks (Amend-ment) Decree 1995. She submitted that the management and control of Bank of the North Ltd is in the hands of the plain-tiff but that that is a question of fact, which cannot be deter-mined at this stage of the proceedings but only during trial of the substantive claim when evidence will be led. She re-ferred to the definition of “Failed Banks” under section 7 of the Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks (Amendment) Decree, 1995 and submit-ted that “Failed Bank” is not limited only to banks listed in Exhibit A annexed to the second defendant’s affidavit in support of his objection but includes any bank whose man-agement and control has been taken over by the Central Bank of Nigeria or the plaintiff. She referred me to para-graphs 1, 2 and 18 of the statement claim as evidence that


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the plaintiff has taken over the management and control of Bank of the North Ltd. Finally, she submitted that plaintiff has locus standi to act for Bank of the North Ltd and urged me to overrule the objection.

Learned Counsel for the fourth defendant who came very late to Court associated himself with the arguments and submissions of learned Counsel for the first and second de-fendants.

Replying, learned Counsel for the first defendant conceded that by section 7 of the Amendment Decree 1995, “failed bank” includes banks under the supervision or control of the plaintiff but that there is no evidence before the Court that Bank of the North Ltd is under the control and management of the plaintiff. He submitted that section 5 of the NDIC Act CAP 301 Laws of the Federation of Nigeria, 1990 spells out the functions of the plaintiff to include supervisory powers over banks that are distressed. He submitted that since Bank of the North Ltd is not distressed, and there is no evidence that the Bank is under the control and management of the plaintiff, the plaintiff lacks legal capacity to bring this action.

The crux of the first and second defendants’ objection is that the plaintiff has no locus standi to institute the present proceedings because it can only act for failed banks and Bank of the North Ltd for which it purports to act, is not a failed bank. I think the issues for determination in this rul-ing are clear and they are as follows:– “1. Can the plaintiff act for a bank that is not a failed bank? 2. Is Bank of the North Ltd a failed bank within the meaning of

section 29 of the Failed Banks (Recovery of Debts) and Fi-nancial Malpractices in Banks Decree, 1994 as amended by section 7 of the Failed Banks (Recovery of Debts) and Fi-nancial Malpractices in Banks (Amendment) Decree, 1995?

3. If Bank of the North Ltd is not a failed bank, has the plain-tiff locus standi to institute this action? There is no dispute that the plaintiff herein has brought this action on behalf of Bank of the North Ltd. This is clear from the heading of the action as well as the averment in paragraph 2 of the plain-tiff’s statement of claim which reads thus:–

‘The plaintiff is acting for and on behalf of the Bank of the North Limited in respect of this matter.’”


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It is the argument of the first and second defendants that the plaintiff can only act for failed banks and not otherwise. While conceding that Bank of the North Ltd is not a failed Bank, Learned Counsel for the third defendant argued that by the combined effect of section 4(1), section 5(1)(a) and section 15(1)(a), (b) and (c) of the Nigeria Deposit Insur-ance Corporation Act Cap 301 Laws of the Federation of Nigeria, 1990, the plaintiff can act for and on behalf of a li-censed insured bank which has not become failed. I think it is pertinent to set out these provisions in this ruling. Section 4(h) of the Act provides thus:–

“The Board shall have power to serve notice on an insured bank of its intention to remove the bank from its record of insured banks after a cease and desist order has been issued and after three con-secutive warnings to improve the insured bank operational stan-dard and it has failed to do so.”

Section 5(1)(a) reads as follows:– “The Corporation shall have responsibility for insuring all deposit liabilities of licensed banks and such other financial institutions operating in Nigeria within the meaning of sections 20 and 26 of this Act so as to engender confidence in the Nigerian banking sys-tem.”

Section 15(1)(a), (b) and (c) of the Act provides as follows:– “As from the commencement of this Act:–

(a) all licensed banks and such other financial institutions in Nigeria engaged in the business of receiving deposits shall be required to insure their deposit liabilities with the Corpo-ration;

(b) any licensed bank or such other financial institution which contravenes the provisions of paragraph (a) of subsection (1) of this section shall be guilty of an offence and liable on conviction to a fine of one thousand Naira for each day the offence is committed;

(c) all licensed banks or such other financial institutions in ex-istence and carrying on business before the commencement of this Act shall comply with the provisions of this Act.”

After a careful perusal of the above provisions I do not find anything therein to suggest in any way that the plaintiff can act for and on behalf of any licensed insured bank, as in this case, which has not failed. I do not therefore agree with third


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defendant’s Counsel that the plaintiff can generally act for banks which have not failed. It may be true that the plaintiff has some supervisory powers over licensed banks to ensure good and safe banking operations but I cannot find anything in the Act giving the plaintiff a general meddlesome role in the affairs of a licensed bank that has not been declared a failed bank. On the contrary, section 28(1) of the Act spe-cifically provides for the role of the plaintiff in respect of a failed insured bank. It provided as follows:–

“Subject to the approval of the Minister, the Corporation shall act as a receiver of a failed insured bank and appoint an agent or agents to assist it in the performance of these duties, and all fees, compensation and expenses of liquidation and administration thereof shall be fixed and paid by the Corporation from the real-ised assets of the failed bank.”

Subsections (2), (3) and (4) of the section also make refer-ence to “The failed bank”. It was also argued in opposition by the preliminary objection that by the definition of “failed bank” under section 7 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks (Amendment) Decree, 1995, “failed bank” is not limited only to the banks listed in Exhibit A annexed to the second defendant’s affi-davit but includes any bank whose management and control has been taken over by the Central Bank of Nigeria or the plaintiff. For the avoidance of doubt, section 29 of the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended) by sec-tion 7 of the Failed Banks (Recovery of Debts) and Finan-cial Malpractices in Banks (Amendment) Decree, 1995 de-fines “failed bank” as follows:–

“‘failed bank’ means a bank or other financial institution whose li-cence has been revoked or which has been declared closed, or is placed under receivership or the control and management of which has been assumed by the Central Bank or Nigeria or the Nigeria De-posit Insurance Corporation or whose capital to risk weighted assets ratio is below such minimum percentage as may be prescribed from time to time by the Central Bank of Nigeria or such other appropriate regulatory authority and includes a bank which may otherwise be de-scribed as failed by the Central Bank of Nigeria, Deposit Insurance Corporation or such other appropriate regulatory authority.”


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In the instant case there is no evidence before me that the licence of Bank of the North Ltd has been revoked or that the bank has been declared closed or that it has been placed under receivership. Similarly, there is no evidence before me that the control and management of Bank of the North Ltd has been assumed by the Central Bank of Nigeria or the plaintiff nor is there any evidence that its capital to risk weighted assets ratio is below the minimum prescribed by the Central Bank or any regulatory authority. In the circum-stance, I find no evidence that Bank of the North Ltd is a failed bank and not being a failed bank, I find no legal basis for the plaintiff to act for it in this case. Bank of the North Ltd is a legal entity that can sue and be sued and having re-gard to the averment in paragraph 5 of the statement of claim that the Deed of Mortgage Debenture was between Bank of the North Ltd and the third defendant, I am of the view that Bank of the North Ltd can maintain an action therein in the name.

For a party to have locus standi to maintain an action it must disclose a right in the matter. (See Thomas v Olufosoye (1986) NWLR (Part 18) 669 and Ogunsanya v Dada (su-pra)). In the instant case the plaintiff has not shown that it has a legal right to be protected and as such I am of the view that it has no locus standi to institute this action. In the cir-cumstance I find merit in the objection of the first and sec-ond defendants and I hold that this action ought to be struck out. It is accordingly hereby struck out.



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Joe Billy Ekwunife v Federal Republic of Nigeria FAILED BANKS TRIBUNAL, ZONE IV, LAGOS EDOKPAYI J Date of Judgment: 26 JANUARY, 1999 Suit No.: FBFMT/L/ZIV/2C/M5/96

Evidence – Affidavits – Failure to file counter-affidavit – Effect thereof

Failed Banks Tribunal – Judgment and Order – Setting aside thereof – Applicable principles – “Slip Rule” – Appli-cability thereof to amendment

Failed Banks Tribunal – Money deposited as security for bail – Money thereof lodged by the Tribunal in the Central Bank of Nigeria – Whether accused entitled to interest thereon having been discharged and acquitted

Failed Banks Tribunal – Whether has jurisdiction to direct that money deposited as bail be released to the accused in criminal trials when accused discharged and acquitted

Facts By an amended charge no. FBFMT/ZIV/2C/96, the appli-cant who was the second accused person, was jointly tried along with one Dr Edwin Udemegbunam Onwudiwe, who was the first accused person. The appellant/applicant was charged only in Counts 1, 2 (alternative Count 1), 4, 7 and 9. He was found not guilty as charged and was discharged and acquitted in all the counts in which he was so charged. Judgment was delivered on 11 November, 1998.

As soon as the judgment was delivered, the Tribunal im-mediately ordered that the said sum of N8.28 million depos-ited in the Tribunal by the appellant/applicant as security for bail, should be refunded to him by the Secretary to the Tri-bunal who should ensure that he signed for same.

The Tribunal further ordered that the passport of the appel-lant/applicant which was also deposited with the Tribunal during the duration of the bail, should be returned to him.


Joe Billy Ekwunife v. Federal Republic of Nigeria 91

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The appellant/applicant has filed an appeal to the Special Appeal Tribunal against a part of the said judgment.

Subsequently, the Secretary of the Tribunal Chief B.N. Osisi wrote a letter ref no. FBFMT/L/ZIV/2C/T/96 dated the 10 December, 1998 to the applicant requesting him to come to his office to collect CBN cheque issued by him on behalf of the Tribunal for the sum of N8,280,000 as well as his passport, as ordered on 11 November, 1998. The appel-lant/applicant duly signed for and collected his passport from the Secretary to the Tribunal but declined to accept the cheque issued to him for the sum of N8,280,000 on the ground that no interests were added. The various monthly statements of accounts showed that the CBN did not add in-terests to the said sum of N8,280,000. The appel-lant/applicant subsequently filed the instant motion.

Held –

1. The Failed Banks Tribunal has jurisdiction to make an order, where an accused person has been discharged and acquitted, directing that any sum of money deposited as security for bail be refunded to the accused person even though the accused did not specifically apply for the or-der. In the instant case, the Tribunal had jurisdiction to so make the order because the trial was over and the money was only deposited with the Tribunal as security for bail while the passport was deposited with the Tribu-nal for the duration of the trial. The money was not ten-dered as an Exhibit which would have been sent along with other Exhibit to the Special Appeal Tribunal, Lagos for the purpose of hearing and determination of the Ap-peal. It was deposited with the Tribunal as security for bail and could be regarded as such.

2. The appellant/applicant is entitled to be paid all the ac-crued interests on the said sum of N8,280,000 deposited in the Central Bank of Nigeria by this Tribunal since the appellant/applicant was discharged and acquitted and since it accrued interests.



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3. The Failed Banks Tribunal may set aside its own order:– (a) When the judgment was obtained as a result of

fraud perpetrated by one of the parties. (b) When the judgment is a complete nullity ab inito. (c) Where it is obvious on the face of the record that

the Court was misled into giving judgment under a mistaken belief that the parties consented to it when in fact they did not. In such a situation, the Court has a discretionary power to set aside its own judg-ment ex debito justitiae.

4. The conditions for the Failed Banks Tribunal to set aside its own order or judgment are as follows:–

“(a) The applicant must show good reasons for being absent at the hearing.

(b) The application must be brought within the prescribed pe-riod of 6 days.

(c) Where the application is brought after 6 days of the judg-ment, the applicant must apply for extension of time to bring the application, and to give good reasons for his in-ability to bring the application to set aside the judgment within the 6 days prescribed under the rule.

(d) The applicant must show that there is an arguable defence to the action which is not manifestly unsupportable.

(e) The applicant’s conduct throughout the trial must not be such as is condemnable but is deserving of sympathy.

(f) Where the judgment is shown to be with fraud or is ir-regularly obtained.

(g) Where the judgment was given for an amount in excess of what was due and claimed.

(h) The applicant must show that the respondent will not suf-fer any prejudice or embarrassment if the judgment is set aside.”

5. The law presumes the regularity of a judgment or order of a competent Court or Tribunal until it is set aside and the burden is on the party alleging the contrary. In the instant case, the burden has not been discharged by the applicant. Consequently, the Tribunal will not set aside its own order made on 11 November, 1998 as it has ju-risdiction to make it, in accordance with the provisions



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of section 263(1) and (2) and 299 of the Criminal Proce-dure Act.

6. Applying the slip rule, the order made on 11 November, 1998 will be amended and a further order made in terms of prayer 2 of the application ie that the Central Bank of Nigeria shall deposit with the Secretary to the Tribunal a Central Bank of Nigeria cheque made payable to the ap-pellant/applicant in such sum as would represent accrued interests as appropriate on the said sum of N8,280,000 deposited in the account of this Tribunal with the Central Bank of Nigeria, Tinubu Square, Lagos, as security for bail and thereafter, the appellant/applicant shall be at liberty to collect the cheque in the said sum of N8,280,000 and accrued interests from the Secretary to the Tribunal and dispose of same as he may desire.

7. It is trite law that where averment contained in an affi-davit are not controverted, they are, by the nature of our adversary system deemed to have been admitted and the Court, and indeed this Tribunal, must accept them as be-ing correct and the truth thereof. In other words, facts contained in an affidavit not denied by the opponent are deemed correct.



Nigerian Agunbiade v Okunoga and Co (1961) 1 All NLR 110 Alaka v Adekunle (1959) LLR 76 Azeez v The State (1986) 2 NWLR (Part 23) 541 Boshali v Allied Commercial Exporters Ltd (1961) 1 All NLR 917 Chief Lands Officer v Alor (1991) 4 NWLR (Part 187) 617 Egbuna v Egbuna (1989) 2 NWLR (Part 106) 773 Ekerete v Ete (1925) 6 NLR 118



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Mofam Farms and Food Ltd v I.B.W.A. (1991) 7 NWLR (Part 205) 643 Nigeria Maritime Services Ltd v Afolabi (1978) 2 SC 79 Obimonure v Erinosho (1965) 1 All NLR 250 Odulaja v Haddad (1973) 11 SC 35 Ojaka v Ogueze (1962) 1 SCNLR 112 Omoregbe v Lawani (1980) 3–4 SC 108 Sanusi v Ayoola (1992) 9 NWLR (Part 265) 275 Sken Consult v Ukey (1981) 1 SC 1 Union Bank of Nigeria Ltd v Ogboh (1995) 2 Kings Law Reports (Vol. 2) (Part 28) 401 United Bank for Africa Ltd v Taan (1993) 4 NWLR (Part 287) 368 Williams v Hope Rising Voluntary Fund Society (1982) 1–2 SC 145

Foreign Shroeder v Accountant General (1980) 2 All ER 648

Nigerian statutes referred to in the judgment Criminal Procedure Act Cap 80 Laws of the Federation of Nigeria, 1990, sections 263(1), (3) and 299 Failed Banks (Recovery of Debt) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), section 26

Book referred to in the judgment Criminal Procedure of the Southern States of Nigeria (1ed) by Fidelis Nwadialo chapter 20 paragraph B at pages 148–149

Counsel For the appellant/applicant: E.O. Sofunde, S.A.N. (with him G.N.O. Osakwe, Esq. and L.A. Ayanwale, Esq.) For the complainant/respondent: O.E. Asuquo, Esq.



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Judgment EDOKPAYI J: This is a ruling on a motion filed on 23 No-vember, 1998, by EO Sofunde, S.A.N. on behalf of the ap-pellant/applicant wherein he prayed for the following or-ders:– “1. Setting aside the order made on 11 November, 1998 direct-

ing the sum of N8,280,000 deposited with the Tribunal as security for bail, be refunded to the applicant and replacing it with an order directing that the Central Bank of Nigeria do deposit with the Secretary to the tribunal or such other person as this Honourable Tribunal may direct, a cheque made payable to the applicant in the sum of N8,280,000 with accrued interest as appropriate with liberty to the ap-plicant to collect the said cheque from the said Secretary or the person as aforesaid and dispose of same as he may de-sire.

2. In the alternative to (1) above, an order amending the said order made on 11 November, 1998 by directing that in addi-tion to the said order made on 11 November, 1998 the Cen-tral Bank of Nigeria do deposit with the Secretary to the Tribunal or such order person as this Honourable Tribunal may direct, a cheque made payable to the applicant in such sum as would represent accrued interest as appropriate on N8,280,000 with liberty to the applicant to collect the said cheque from the said Secretary or other person as aforesaid and dispose of same as he may desire.

3. Directing that the applicant’s passport deposited with the Tribunal in fulfilment of the terms of the bail granted be re-leased to him by the Secretary to the Tribunal or such other officer as the Tribunal may direct.”

And for such further and/or other orders as this Honourable Tribunal may deem fit to make in the circumstances.

And Further Take Notice that at the hearing of this appli-cation the applicant intends to use and rely on all affidavits sworn as well as the record of proceedings before this Hon-ourable Tribunal and processes filed therein.

Both the Central Bank of Nigeria and the learned Prosecut-ing Counsel, OE Asuquo, Esq. were put on Notice. In an 11 paragraph affidavit in support of the application deposed to on 23 November, 1998 by the appellant/applicant himself, Joe Billy Ekwunife, who was the second accused person in


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the criminal charge and the FBFMT/ZIV/2C/96 and now of 7A, Adebisi Close, Off Johnson/Bode Thomas Street Surul-ere, Lagos State, he deposed as follows:– “1. I am the second accused person in this matter in which I

was granted bail on the 21 August, 1996 upon the condition that I deposit the sum of N8,280,000 (Eight Million, Two Hundred and Eight Thousand Naira) in the Tribunal as se-curity for the bail and my passport, amongst others.

2. I am aware that the said sum of N8,280,000 and my pass-port were deposited with Tribunal in September, 1996.

3. I am also aware that the said sum of N8,280,000 was de-posited with the Central Bank of Nigeria.

4. On the 11 November, 1998 I was discharged and acquitted on all counts for which I was standing trial.

5. Following my acquittal, this Honourable Tribunal on 11 November, 1998 made an order that the said sum of N8,280,000 deposited be returned to me.

6. The said order for the return of the money deposited was made soon after the Tribunal’s judgment by which I was discharged and acquitted without the benefit to the Tribunal of any application thereon being moved or argument thereon being proffered on my behalf.

7. I am aware that it is the practice in the Central Bank of Ni-geria to pay appropriate interest on money deposited with it however designated.

8. I am aware that such monies deposited, including the said N8,280,000 would be part of the monies that the Central Bank of Nigeria has been using to trade in Treasury Bills and other money instruments.

9. I am aware that appropriate interest payable by the Central Bank of Nigeria on such deposits is between 12% and 15%, which is the amount payable by it on Treasury Bills and other investible instruments.

10. I am a banker by profession and experience and I crave the indulgence of this Honourable Tribunal to refer to my evi-dence at the trial where I stated in detail my qualifications and experience.

11. The aggregate sum of N8,280,000 was borrowed by me and on my behalf in batches at the rate of 30% interest per annum.

AND I SWEAR to this affidavit in good faith believing the contents to be true and correct and in accordance with the Oaths Law.”


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In moving the application, Mr EO Sofunde, S.A.N., learned Counsel for the appellant/applicant submitted that the appli-cation was dated and filed on 23 November, 1998 and seek-ing three (3) reliefs. He submitted that prayer 2 was an alter-native to Prayer 1 while Prayer 3 had already been overtaken by events since the passport had already been released to the appellant/applicant who had also signed for same. He there-fore abandoned Prayer 3. He relied on 11 paragraph affidavit deposed to by the applicant on 23 November, 1998.

Learned Counsel informed the Tribunal that he intended to commence his argument with Prayer 1 which was in part made on 11 November, 1998 while the second part was the order sought in substitution. He relied on paragraph 6 of the affidavit in support of the application. He also relied on the Court’s records. He submitted that no application was made before the order to release the money deposited for bail was made. He submitted that an order not sought was not granted. He submitted that the court had no jurisdiction to make such and cited case of Awoshile v Sotubo (1992) 5 NWLR (Part 243) 514 at 529 paragraphs E–G. He submitted that any such order was a nullity and cited the case of Od-ofin and another v Agu and another (1992) 3 NWLR (Part 229) 350 at 372 paragraph H. He submitted that the court had no jurisdiction where it was a nullity and cited the case of Okoye v Nigeria Construction and Furniture Co Ltd (1991) 6 NWLR (Part 199) 501 at 537 paragraphs F–H and Attorney-General, Anambra State and others v Okafor and others (1992) 2 NWLR (Part 224) 390 at 427 C–E.

Mr Sofunde then submitted that assuming that the order of 11 November, 1998 was set aside, he then proceeded to move the second part of Prayer 1, the order sought in substi-tution. He submitted that the appellant/applicant was entitled to refund of his money and that it was not in dispute. He submitted that what appeared to be in contention was whether he was entitled to interests on this amount. He re-ferred to paragraphs 7–10 of the affidavit in support of the applications. He submitted that the affidavit was served on Mr Asuquo, learned Counsel for the prosecution/respondent


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and the Central Bank of Nigeria and there was proof of ser-vice on the Central Bank of Nigeria, which was not a party to the criminal case but party to this application by virtue of its being put on notice. He submitted that the relief sought was to direct the Central Bank of Nigeria to do something that might be to its detriment and that was advisedly why the CBN was put on notice and further that, before an order was made against a party, he must be put on notice. He submitted that the CBN had been given the opportunity of being heard by the evidence of the proof of service in the Court’s file. He submitted that paragraphs 7–10 of the affi-davit had not been controverted and that what flew there-from was that the court ought to take the averment therein as true. He submitted that the summary of those true and es-tablished facts was that the applicant paid the sum of N8,280,000 into the account as security for bail and that this Honourable Tribunal paid over the said money to the Cen-tral Bank. Learned Counsel then submitted that the said money was paid into the CBN by this Tribunal, and that whatever account it went into and however that account was designed, the said sum earned interests. He then posed a question thus:–

“the interests which accrued on that sum of money deposited into the Court by the applicant, what should happen to it?”

Mr Sofunde also provided the answer to that poser. He sub-mitted that in so far as the appellant/applicant had not been adjudged liable to forfeit the money he deposited into court and in fact, if he was adjudged entitled to recover this money, he should he entitled to the interests. He submitted that if the money was not paid by the appellant/applicant into the Central Bank but into Tribunal as per the affidavit then the appellant/applicant would have no right to demand principal sum let alone interests from the Central Bank of Nigeria (“CBN”) except by a Court order.

Mr Sofunde further submitted that on the facts before the Tribunal, was evidence that the said N8,280,000 did earn interests. He submitted that this bare averment would have been sufficient if the Central Bank of Nigeria had joined


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issues. He submitted that the mere fact that the money was paid into the Tribunal on Court order and that the law stated that such sums of money should be paid into Court, it was irrelevant in so far as the evidence showed that the sum of money did earn interests. He submitted that in so far as the money did earn interests, the applicant was entitled to them and cited the English case of Shroeder v Accountant-General (1980) 2 All ER 648 at 649, paragraphs (a–d) and page 650. Learned Counsel submitted that his authority showed that it did not matter that the applicant paid the money into Court but what mattered was that in so far as that money paid into Court attracted interests and unless the appellant/applicant was otherwise disqualified, he was enti-tled to the interests. He cited no Nigeria case on the point.

Mr Sofunde further submitted that Prayer 2 was an alterna-tive to Prayer 1. He contended that if this Tribunal will not set aside the order as requested under prayer 1, then under the slip rule, the Tribunal should make an additional order that interests be ordered in addition to the order of 11 No-vember, 1998 and that that judgment of 11 November, 1998 be amended for that purpose and cited the case of Macron Services Nigeria Ltd v Agro Continental Nigeria Ltd (1995) 2 NWLR (Part 376) 201 at 213 paragraph (g) to page 214, paragraph (f). Finally, learned Counsel submitted that the facts and law were the same as under prayer 1. He then sought to move this application.

For his part, Mr OE Asuquo, learned Counsel for the com-plainant/respondent submitted that he had no objection to interests being paid in addition to the amount of N8.28 mil-lion deposited as security for bail. He submitted that in so far as it had been established on the facts before the Tribu-nal, the only question for determination was:–

“Who is to be paid these interests?”

Learned Counsel, himself, also provided the answer thus:– “The only parties that may be interested in the interests that have accrued on the said sum of N8.28 million are the applicant and the State (respondent) and the CBN which had custody of the money.”


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Mr Asuquo then submitted that the appellant/applicant hav-ing been acquitted, the payment of interest should follow that event, in other words, the money (N8.28 million) in ad-dition to the interests should be paid over to the appel-lant/applicant. He submitted that so long as the money was deposited for the duration of the trial, he could not attach it, for the purposes of the pending appeals as that would be in the nature of Mareva injunction. Learned Counsel further submitted that the Federal Republic of Nigeria, the com-plainant/respondent, had no interest in the said money since the appellant/applicant had already been acquitted. In addi-tion, he submitted that the Tribunal had no interest in the matter. He submitted that the Central Bank of Nigeria (“CBN”) had custody of the said money but that this Tribu-nal also had constructive custody of the said money and it might have placed this money in the Commercial Bank apart from the CBN. The CBN was unrepresented by Coun-sel.

By an amended charge no. FBFMT/ZIV/2C/T/96, the ap-plicant who was the second accused person, was jointly tried along with one Dr Edwin Udemegbunam Onwudiwe, who was the accused person. The appellant/applicant was charged only in Counts 1, 2 (alternative count 1), 4, 7 and 9. He was found not guilty as charged and was discharged and acquitted in all the counts in which he was so charged. Judgment was delivered on 11 November, 1998. As soon as the judgment was delivered this Tribunal immediately or-dered that the said sum of N8.28 million deposited in the Tribunal by the appellant/applicant as security for bail, should be refunded to him by the Secretary to the Tribunal who should ensure that he signed for same.

This Tribunal further ordered that the passport of the ap-pellant/applicant which was also deposited with the Tribu-nal during the duration of the bail, should be returned to him. The appellant/applicant has filed an appeal to the Ap-peal Tribunal against a part of the said judgment.

This Tribunal made this order having regard to the fact that the trial was over in the Tribunal and that the issue of


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bail, whether utilised or not utilised, also went overboard with the trial. The money was not tendered as an Exhibit. It was not marked as Exhibit.

Section 26, of the Decree No. 18 of 1994, under which the applicant was granted bail, provides as follows:– “26 – (1) Subject to subsection (2) of this section, the Tribunal

shall not grant bail to a person charged with an of-fence punishable with a term of imprisonment with-out the option of fine under this Decree.

(2) Notwithstanding subsection (1) of this section, the Tribunal may grant bail, for an amount equal to that involved in the offence, if the person charged with the offence

(a) deposits half the amount in the Tribunal as secu-rity for the bail;

(b) provides surety for the balance of the amount; and

(c) hands over his passport to the Tribunal for the duration of the bail.”

The amount involved in the offences charged was the sum of N16.56 million. The appellant/applicant and the first ac-cused person now an appellant/applicant applied for and were granted bail under that provision. The appel-lant/applicant met only one of the conditions under which he was granted bail on the 21 August, 1996 by this Tribunal. He deposited the sum of N8,280,000 by way of 4 (four) bank drafts with the Secretary of this Tribunal which said 4 (four) drafts were deposited into the account of this Tribu-nal with the Central Bank of Nigeria, Tinubu Square, Lagos on 6 September, 1996.

The drafts were as follows:– (1) TC 6099617 for N500,000; (2) TC 6099649 for N4,900,000; (3) C 4099601 for N2,000,000; and (4) C 4099601 for N880,000. These four local cheques amounted to the sum of N8,280,000. It was this sum which was deposited with the Tribunal by the appellant/applicant as security for bail that


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was ordered by the Tribunal on 11 November, 1998 to be refunded to the applicant since the trial was over in the Tri-bunal and he only, was discharged and acquitted. The first accused person was convicted in all the counts and sen-tenced accordingly.

The said sum of N8,280,000 was first reflected in the Statement of Account of this Tribunal with the CBN dated 13 September, 1996. Subsequently, monthly statement of account by the CBN to the Tribunal. The 4 (four drafts) were paid into the account by means of 4 (four) CBN tellers by the Finance Officer of this Tribunal, Mrs BB Ajala on 6 September, 1996.

As it turned out to be, the Secretary of this Tribunal Chief BN Osisi wrote a letter, Ref No. FBFMT/L/ZIV/2C/T/96 dated the 10 December, 1998 to the applicant requesting him to come to his office to collect CBN cheque issued by him on behalf of the Tribunal for the sum of N8,280,000 as well as his passport, as ordered on 11 November, 1998. The appellant/applicant duly signed for and collected his pass-port from the Secretary to the Tribunal but declined to ac-cept the cheque issued to him for the sum of N8,280,000 on the ground that no interests were added. The various monthly statements of accounts showed that the CBN did not add interests to the said sum of N8,280,000. The appel-lant/applicant subsequently filed the instant motion.

Now, Mr Sofunde had submitted that this Tribunal has no jurisdiction to make the order it made on 11 November, 1998 directing that the N8,280,000 so deposited with the Tribunal and was kept in the account of this Tribunal in the CBN be refunded to him as the applicant did not specifically apply for the order.

In my view, this Tribunal had jurisdiction to do so because the trial was over and the money was only deposited with the Tribunal as security for bail while the passport was deposited with the Tribunal for the duration of the trial. As I have al-ready pointed above, the money was not tendered as an Ex-hibit which would have been sent along with other exhibits to


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the Special Appeal Tribunal Lagos for the purpose of hearing and determination of the appeal. It was deposited with the Tribunal as security for bail and could be regarded as such. I am fortified in this view because by the provision of section 299 of the Criminal Procedure Act, the Tribunal or Court is not only enjoined to give its decision at the conclusion of a trial “either by dismissing or convicting the accused” but is also empowered to “make such other order as may seem just”, so that in addition to sentencing a convicted person to any form of the punishments as provided by law or to acquit-ting and discharging an accused, the Court and indeed the Tribunal, may in each case, make other orders as may seem just. With particular reference to disposal of exhibits, it is clear from the provisions of section 263(1) and (3) of the Criminal Procedure Act that at the conclusion of a trial or even in the course of it, the Court may make such order as it thinks fit for the disposal, whether by way of forfeiture, con-fiscation, destruction or delivery to any other person or oth-erwise of any property produced before it regarding which any offence appears to have been committed or which has been used for the commission of the offence. (See also the Criminal Procedure of the Southern States of Nigeria (1ed) by Fidelis Nwadialo Chapter 20 paragraph B at pages 148–149 dealing with punishments and orders.)

I must say that it beats imagination and I cannot therefore, having regard to the above, find any basis for the submission made by Sofunde, learned Senior Advocate of Nigeria (S.A.N.) that at the conclusion of the trial, this Tribunal made an order directing the refund of the said sum of N8,280,000 and the return of the passport deposited with the Tribunal as security for bail and for the duration of the trial to the appel-lant/applicant without jurisdiction and that the order was never applied for. In my view, the appellant/applicant did not have to move a motion or be heard in order to apply for such a refund of the security and the passport as the order was rightly made but certainly not out of jurisdiction and this Tri-bunal had powers on the law to do so. To this extent and with due respect, I do not agree with Mr Sofunde.


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However, I agree with him that the applicant is entitled to all the interests that have accrued on and in addition to the said sum of N8,280,000 deposited in the Central Bank of Nigeria by this Tribunal, since 6 September, 1996. The ap-plicant has deposed in his affidavit that he was a banker and was aware that the Central Bank normally paid interests on such deposits and do business with and earned interests on the deposited money. He averred in paragraphs 7, 8, 9 and 10 thus:– “7. I am aware that it is the practice in the Central Bank of

Nigeria to pay appropriate interest on money deposited with it, however designated.

8. I am aware that such monies deposited, including the said N8,280,000 would be part of the monies that the Central Bank of Nigeria has been using to trade in Treasury Bills and other instruments.

9. That I am a banker by profession and experience and I crave the indulgence of this Honourable Tribunal to refer to my evidence at the trial where I stated in detail my qualifi-cation and experience.

10. The aggregate sum of N8,280,000 was borrowed by one on my behalf in batches at the rate of 30% interest per an-num.” (Italics mine.)

Both the Motion on Notice to which was attached, the affi-davit in support of this application, were also on Notice to the Central Bank of Nigeria which motion was served on the Central Bank of Nigeria through one Mr SC Njoku on the 11 December, 1998, at 2.20pm as shown in the affidavit of service of the bailiff, Mr Babatunde Kareem. When this Motion came up for hearing on the 15 December, 1998, nei-ther the Central Bank of Nigeria nor its Counsel appeared in the Tribunal to reply to the submissions of the learned Counsel for the appellant/applicant. Even so, Mr SC Njoku who signed for those documents was also absent. The impli-cation of this in law was that the averments deposed to by the appellant/applicant in the affidavit in support of this ap-plication remain uncontradicted. It is trite law therefore, that where averment contained in an affidavit are not contro-verted, they are, by the nature of our adversary system deemed to have been admitted and the Court, and indeed


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this Tribunal, must accept them as being correct and the truth thereof. In other words, facts contained in an affidavit not denied by the opponent are deemed correct. (See (1) Mofam Farms and Food Ind. Ltd and others v

I.B.W.A. (1991) 7 NWLR (Part 205) 643 at 645 ratio 2 and 650;

(2) Union Bank of Nigeria Ltd v Chikwulo Charles Ogboh (1995) 2 Kings Law Reports (Vol. 2) (Part 28) 401 at 481;

(3) Azeez v The State (1986) 2 NWLR (Part 23) 541;

(4) Egbuna v Egbuna (1989) 2 NWLR (Part 106) 773;

(5) Isaac Omoregbe v Daniel Pender Lawani (1980) 3–4 SC 108 at 117;

(6) Odulaja v Haddad (1973) 11 SC 35; (7) Nigeria Maritime Services Ltd v Alhaji Bello

Afolabi (1978) 2 SC 79 at 81; (8) Adel Boshali v Allied Commercial Exporters

Ltd (1961) 1 All NLR (Part 4) 917.) It may well be true that the Central Bank of Nigeria was not joined as a party to the suit, but when it was served with a copy of this motion by this Tribunal, it had a duty to appear in the matter on the date fixed for hearing, moreso, when one Robinson Ukusajuyah from the Banking Examination Department of the Central Bank of Nigeria, testified as PW5 on behalf of the prosecution during the trial of the criminal charge against the appellant/applicant and Dr Edwin Ude-megbunam Onwudiwe and the money in question, N8,280,000 was deposited in the Central Bank of Nigeria which is also aware of this fact.

In my view, the Central Bank of Nigeria, has by implica-tion, shown that it did not intend to oppose this application as to why interests should or should not be added by it to the said sum of N8,280,000 deposited in the Central Bank of Nigeria as security for bail.


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In respect of Prayer 1, seeking to set aside the order of this Tribunal made in a judgment, delivered by this Tribunal on 11 November, 1998, and which matter is now on appeal by both the prosecution and the defence, I refer to the case of United Bank for Africa Ltd v Taan and another (1993) 4 NWLR (Part 287) 368 at 371 ratio 4–378 where the condi-tions for a Court to set aside its own decision were spelt out. In that case the Court of Appeal held at page 378 as fol-lows:–

“The law recognises that there are certain instances when a Court of law has the discretionary power to interfere with its own judg-ment and set it aside. Some of the instances include the follow-ing:–

(a) When the judgment was obtained as a result of fraud perpe-trated by one of the parties. Alaka v Adekunle (1959) LLR 76

(b) When the judgment is a complete nullity ab inito (1) Ojaka v Ogueze (1962) 1 SCNLR 112. (2) Ekerete v Ete (1925) 6 NLR 118. (3) Chief Lands Officer v Alor (1991) 4 NWLR (Part 187)

617. (c) Where it is obvious on the face of the record that the Court

was misled into giving judgment under a mistaken belief that the parties consented to it when in fact they did not. In such a situation, the Court has a discretionary power to set aside its own judgment ex debito justitiae.

(1) Agunbiade v Okunoga and Co (1961) 1 All NLR 110. (2) Obimonure v Erinosho (1965) 1 All NLR 250.”

See also the decision of the Supreme Court in Sanusi v Ayoola (1992) 9 NWLR (Part 265) 275 at 299 ratio 4, where the conditions for a court to set aside its own judg-ment were also listed as follows:– “(a) The applicant must show good reasons for being absent at

the hearing. (b) The application must be brought within the prescribed pe-

riod of 6 days. (c) Where the application is brought after 6 days of the judg-

ment, the applicant must apply for extension of time to bring the application, and to give good reasons for his


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inability to bring the application to set aside the judgment within the 6 days prescribed under the rule.

(d) The applicant must show that there is an arguable defence to the action which is not manifestly unsupportable.

(e) The applicant’s conduct throughout the trial must not be such as is condemnable but is deserving of sympathy.

(f) Where the judgment is shown to be with fraud or is irregu-larly obtained.

(g) Where the judgment was given for an amount in excess of what was due and claimed.

(h) The applicant must show that the respondent will not suffer any prejudice or embarrassment if the judgment is set aside.” (Italics mine.)

In that case, none of the considerations listed above, could be listed in favour of the appellant/applicant. While a judg-ment could be set aside where it was given for an amount in excess of what was due and claimed, the same cannot be said of a situation where as in the instant application, it was argued, that the judgment was given for an amount below what was due and claimed as that would not be a ground for setting the judgment aside. At page 275 ratio 2 of the said Law Report, the Supreme Court held as follows:–

“It is well settled that a Court of Law has an inherent jurisdiction to set aside its own judgment where the conditions for doing so have been met by a party seeking such setting aside. One of such is where the judgment to set aside was obtained by failure to com-ply with procedural rules.”

In Williams v Hope Rising Voluntary Fund Society (1982) 1–2 SC 145 where there was a similar prayer as in the in-stant application, the Supreme Court declined to grant the application. I am not satisfied therefore that the appel-lant/applicant herein has met any or all of the conditions listed above for this Tribunal to set aside its own order made on 11 November, 1998. The law presumes the regularity of a judgment or order of a competent Court or Tribunal until it is set aside and the burden is on the party alleging the con-trary. In my view, this burden has not been discharged by the appellant/applicant.


Edokpayi J


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On the jurisdiction to set aside orders, Obaseki, JSC stated in Sken Consult v Ukey (1981) 1 SC at 8 as follows:–

“Certainly, I have no doubt in my mind that the High Court has inherent jurisdiction to set aside its null orders on a proper appli-cation before it.”

Consequently, this Tribunal will not set aside its own order made on 11 November, 1998 as it has jurisdiction to make it, in accordance with the provisions of sections 263(1) and (2) and 299 of the Criminal Procedure Act. Accordingly, Prayer 1, is hereby refused.

However, this is not to say that the appellant/applicant is not entitled to be paid interests on the said sum of N8,280,000 deposited with the Tribunal and kept in the ac-count of this Tribunal with the Central Bank of Nigeria. In Prayer 2, the appellant/applicant seeks an amendment to the order of this Tribunal made on 11 November, 1998 by the addition thereto of an order that the Central Bank of Nigeria shall pay all the accrued interests on the deposited sum of N8,280,000 in the account of this Tribunal with the Central Bank to enable the Secretary to the Tribunal, pay both the principal sum of N8,280,000 and all the accrued interests to the appellant/applicant by means of a cheque under the Slip Rule. In respect of Prayer 2, I agree entirely with Messrs So-funde S.A.N and Asuquo that the appellant/applicant, Joe Billy Ekwunife (M) is entitled to be paid all the accrued in-terests on the said sum of N8,280,000 deposited in the Cen-tral Bank of Nigeria by this Tribunal since the appel-lant/applicant was discharged and acquitted and since it is also clear and deemed to have been admitted by the Central Bank of Nigeria that the appellant/applicant is entitled to be paid both the principal sum of N8,280,000 and the accrued interests. I am fortified in this view by the decision in Shroeder v Accountant General (supra) where it was sub-mitted at page 650 by the Accountant-General at the Queen’s Bench Division as follows:–

“The problem arises this way, when money is paid into Court as a condition for liberty to defend an action, the money is placed on deposit and while on deposit, earns interest which if nothing further happens in the course of the proceedings, results in the Court when


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it gives judgment in the action being able to deal with interests which accrued up to trial. Where, however, a notice of appropriation is given by a defendant who has paid money pursuant to an order of the type I have referred to so as to enable the money paid into Court pursuant to the order to be treated in the same way as money paid into Court voluntarily. When the money is taken from deposit, it no longer earns interest and the Accountant-General considers that the interest which he has previously approved has to be transferred and dealt with in accordance with the requirement of Rule 5(3) of the Supreme Court forms Rule, that the money including accrued inter-ests is transferred to cash account of Her Majesty’s Pay Master-General for the Credit of Administration of Justice Vote.”

In that case, the learned trial Judge held as follows:– “Accordingly, in the present case, where on the trial I had ordered that the interests which had accrued should be paid out to the de-fendant, it was an order which applied to the interests which had been earned on the money paid into Court while it was deposited in accordance with the order of the Master made RSC Order 14.”

It must be pointed out here that this decision, however illu-minating it may be, is only persuasive but not binding on this Tribunal. This is because the decision of English Court even of the highest authority, the House of Lords, are only persuasive on our Court. A Nigeria Judge cannot even allow himself to be persuaded by an English authority where the English legislation which gave rise to that decision, is dif-ferent from ours. See the following cases:– (1) Eliochini (Nigeria) Ltd and others v Mbadiwe (1986)

1 NWLR (Part 14) 47; (2) Nigeria National Supply Co Ltd v Alhaji Hamajoda

Sabana and Co Ltd and another (1986) 5 NWLR (Part 40) 240;

(3) Oladiran v The State (1986) 1 NWLR (Part 14) 75; (4) Lijadu v Lijadu (1991) 1 NWLR (Part 169) 627 at

648. On the need to cite Nigerian cases in Court, Obaseki, JSC, stated in Attorney-General, Bendel State v Attorney-General of the Federation (1981) 10 SC 1 at 115 as follows:–

“Just as Australian Courts apply Australian Law and American Courts apply American Law, be they State or Federal, Nigeria


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Courts are enjoined by the Nigeria Constitution to follow Nigerian Law which is applicable to the cases before them no matter how attractively presented before their cases and authorities from other countries of similar judicial system as ours may be.”

Finally in the circumstances and in view of the foregoing, I hereby order as prayed in Prayer 2 and by applying the Slip Rule, I hereby amend the order made on 11 November, 1998 and accordingly further order as follows:– (1) In addition to the order made on 11 November, 1998, the

Central Bank of Nigeria shall deposit with the Secretary to the Tribunal a Central Bank of Nigeria cheque made pay-able to the appellant/applicant in such sum as would repre-sent accrued interests as appropriate on the said sum of N8,280,000 deposited in the account of this Tribunal with the Central Bank of Nigeria, Tinubu Square, Lagos, as se-curity for bail.

(2) Thereafter, the appellant/applicant shall be at liberty to col-lect the cheque in the said sum of N8,280,000 and accrued interests from the Secretary to the Tribunal and dispose of same as he may desire.

(3) Prayer 3 having been abandoned, is hereby dismissed. (4) This order shall be served on the Central Bank of Nigeria

and which shall comply, forthwith.


Bulletin Construction Co Ltd v. Nigeria Deposit Insurance Corp 111

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Bulletin Construction Co Limited and others v Nigeria Deposit Insurance Corporation

SPECIAL APPEAL TRIBUNAL, LAGOS COKER, J, AJAYI-OBE S.A.N. Date of Judgment: 27 JANUARY, 1999 Suit No.: SAT/FBT/498/98

Failed Banks Tribunal – Appeal against interlocutory deci-sion thereof – Whether Special Appeal Tribunal can enter-tain – Interlocutory decision of Failed Banks Tribunal – Whether is a judgment as envisaged in section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) Facts The applicant/respondent, in its application to the Tribunal sought an order for the recovery of debt due to Allied Bank of Nigeria Plc (in liquidation) as per a consent judgment of Ilorin High Court in Suit No. KWS/168/94. The judgment was for a total sum of N497,986,300.93 and the first appel-lants had paid part of the said judgment debt leaving a bal-ance of N468,304,925.93. The applicant/respondent subse-quently brought an application under section 11(a) of the Failed Banks Decree No. 18 of 1994 to the Tribunal below against respondents/applicants jointly and severally for re-covery of the total grand balance of the judgment with inter-ests amounting to N747,492,711 (Seven Hundred and Forty Seven Million, Four Hundred and Ninety Two Thousand, Seven Hundred and Eleven Naira) only.

The respondents/appellants after entering a “Conditional Ap-pearance” to the application on the same day, 25 March, 1998, filed a Motion on Notice praying for an Order striking out and/or dismissing the application of the receiver/liquidator on the ground that the same matter had been adjudicated upon to finality in the Ilorin High Court by Gbadeyan, J.

On 4 August, 1998 the Lower Tribunal gave its ruling and held that the judgment debts are recoverable by the Tribunal and that the Tribunal possesses the power to hear and determine claims of judgment debt due to the Tribunal.



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The motion was then dismissed. Being dissatisfied the respondents appealed to the Special

Appeal Tribunal. It was contended on behalf of the appli-cant/respondent by a preliminary objection that the Special Appeal Tribunal has no jurisdiction to entertain the appeal being one against the interlocutory decision of the Lower Tribunal.

Section 5(1) Failed Banks (Recovery of Debts) and Finan-cial Malpractices in Banks Decree No. 18 of 1994 (as amended) reads:–

“Section 5(1) A person convicted or against whom a judgment is given under this Decree may, within 21 days of the conviction or judgment, appeal to the Special Appeal Tribunal established under the Recovery of Public Property (Special Military Tribunal) Decree 1984, as amended, in accordance with the provisions of that Decree.”

Held – 1. By the combined effect of sections 4(1) and 5(1) of the

Failed Banks Decree No. 18 of 1994 (as amended) the word judgment in section 5(1) of the Decree must be given a narrow interpretation to mean final judgment only. Consequently, section 5(1) of the Decree prescribes a right of appeal only against a final decision of the Lower Tribunal and not against its interlocutory decision.

In the instant case, the ruling of the Lower Tribunal dated 4 August, 1998 is an interlocutory decision and did not finally decide the rights of the parties. The Special Ap-peal Tribunal can therefore not entertain the appeal.

Preliminary objection upheld.


Nigerian Folbod Investments Limited v NDIC (1997) 1 FBTLR 165 Kwasikwu Farms Limited v Attorney-General of Bendel State (1986) 1 NWLR (Part 19) 695 Shodeinde v Registered Trustees (1980) 1–2 SC 225 Timitimi v Amabebe 14 WACA 374



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Nigerian statutes referred to in the judgment Constitution of the Federal Republic of Nigeria, 1979, sec-tion 277 Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), sections 4(1), 5(1)

Counsel For the appellant: Chief Wole Olanipekun, S.A.N. For the respondent: G.C. Igbokwe, Esq.

Judgment COKER J: The short point for decision in this matter is on the preliminary objection taken by the respondent, re-ceiver/liquidator of Allied Bank of Nigeria Plc to the jurisdic-tion of the Appeal Tribunal to hear the appeal against the Rul-ing of the Benin Zone of the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Tribunal dated the 4 August, 1998. The Receiver/Liquidator, in its application to the Tribunal sought an order for the recovery of debt due to Allied Bank of Nigeria Plc (in liquidation) as per a consent judgment of Ilorin High Court in Suit No. KWS/168/94. The judgment was for a total sum of N497,986,300.93 and the first appellants had paid part of the said judgment debt leav-ing a balance of N468,304,925.93. The Receiver/Liquidator subsequently brought an application under section 11(a) of the Failed Banks Decree No. 18 of 1994 to the Tribunal be-low against respondents/applicants jointly and severally for recovery of the total grand balance of the judgment with in-terests amounting to N747,492,711 (Seven Hundred and Forty Seven Million, Four Hundred and Ninety Two Thou-sand, Seven Hundred and Eleven Naira) only.

The respondents/appellants after entering a “Conditional Appearance” to the application on the same day, 25 March, 1998, filed a Motion on Notice praying for an Order striking out and/or dismissing the application of the re-ceiver/liquidator on the ground that the same matter had


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been adjudicated upon to finality in the Ilorin High Court by Gbadeyan, J.

They contended that the application by the respon-dent/receiver/liquidator was “oppressive, vindictive and con-stitutes a patent abuse of the process of the Honourable Tri-bunal”. In short, their contention is that once the High Court, Ilorin, had adjudicated to finality on the same subject matter the Tribunal ceases to have jurisdiction over the same matter, even though there was still part of the full judgment debt with interests accruing therefrom which remained outstanding. The affidavit in support of the Motion deposed to the fact that the liquidator/receiver, had obtained in the High Court Ilorin pursuant to the judgment a writ of attachment in execution of the judgment debt on 16 January, 1996, and “in part settle-ment of the judgment debt, respondent domiciled all pay-ments due in respect of some of the contracts executed by the applicants/appellants”. Further, “the receiver/liquidator has commenced garnishee proceedings against Kwara State Gov-ernment and Kogi State Government both before the Lagos High Court claiming a sum of money and “the said proceed-ings are now on appeal at the Court of Appeal, Lagos”. Fur-thermore, the applicant (ie receiver/liquidator) has in its cus-tody a Deed of Legal Mortgage already executed in its favour by the first respondent/applicant. Further still, that on 22 January, 1998, that the respondents/applicants have been charged for some criminal offence before the Lower Tribunal in respect of the same debt. That all these actions by the re-ceiver/liquidator were intended to victimise and oppress them (the judgment debtors).

The Tribunal below made an “order for written arguments to be exchanged and filed”.

On the 4 August, 1998, it gave its Ruling and held that “the judgment debts are recoverable by the Tribunal, that the Tribunal possesses the power and jurisdiction to hear and determine claims of judgment debts due to failed bank”.

It then dismissed the Motion and adjourned the substantive application for hearing. The respondents appealed to this


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Tribunal on 12 August, 1998 on 8 grounds against the Rul-ing.

When the matter came before this Tribunal, Mr Igbokwe, Learned Counsel to respondent, receiver/liquidator, orally indicated his intention of raising a preliminary objection to the jurisdiction of the Tribunal to hearing of the matter in as much as “the appeal” is against an interlocutory order of the Tribunal below. But Chief Wole Olanipekun, S.A.N. for the appellants insisted that Igbokwe should file a Brief stating the basis and argument in support of his objection. We ac-ceded to his request and the Tribunal made the order accord-ingly. In compliance with the order, Igbokwe filed respon-dent’s brief in which he incorporated both argument on his preliminary objection and on the substantive appeal.

As indicated at the hearing, consideration of the substan-tive appeal will arise only if the preliminary objection is overruled. In the appellant’s brief, several cases were cited in support of his contention.

The respondent relies on sections 3(1)(a), 9 and 28 of the Failed Banks Decree No. 18 of 1994 as a complete legal an-swer without joining issues on the facts.

He contended that the jurisdiction of the Appeal Tribunal in respect of matters from the Failed Banks Tribunal is con-ferred by section 5(1) of the Failed Banks Decree No. 18 of 1994 in respect of and restricted to final decisions of the Lower Tribunal and not against its interlocutory decisions. He cited the decision of the Appeal Tribunal in the case of Folbod Investments Limited and 2 others v Nigeria Deposit Insurance Corporation (1997) 1 FBTLR 165.

Learned Counsel argued that the appeal comes within the definition of an interlocutory appeal as the Ruling appealed against does not finally determine the rights of the parties in the matter.

Learned Counsel submitted that allowing appellant’s Counsel to argue the main appeal will tantamount to confer-ring right of appeal to the appellants where the Decree does not confer any.


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In his reply brief, Chief Olanipekun, S.A.N., Counsel for appellants contended that section 3(1) of Decree No. 18 of 1994, does not forbid appeal against an interlocutory deci-sion and that the case of Folbod Investment (supra) is not apposite or relevant to this appeal. In law, learned Counsel submitted “no matter is deemed to be beyond the jurisdic-tion of a superior court unless it is expressly shown to be so. (See Shodeinde v Registered Trustees (1980) 1–2 SC 225. Kwasikwu Farms Limited v Attorney-General of Bendel State (1986) 1 NWLR (Part 19) 695 and Timitime v Ama-bebe 14 WACA 374)”. He argued that:–

“The Appeal Tribunal stands on the same pedestal with the Court of Appeal. The word ‘judgment’ means decision and it also in-cludes an order or a Ruling. It includes a determination or recom-mendation – See section 277(1) of the 1979 Constitution.”

We have given very careful consideration to the submis-sions of both Counsel. We have also read the cases cited, copies of which Chief Olanipekun has kindly made avail-able. We however have to draw attention to the fact that the Special Appeal Tribunal like the Failed Banks Tribunal, are creatures of statutes or Decrees and its powers and or juris-diction are strictly defined by Decree No. 18 of 1994 and are different from those of the High Courts or any other Courts or Tribunals.

The right of appeal in any matter is statutory and not in-herent in any Court or Tribunal. The jurisdiction of each are separate and distinct and are as the legislature deem fit to confer and subject to any conditions to any particular Tribu-nal or Court.

The jurisdiction of the Appeal Courts in all the cases cited are derived from the Constitution of the Federation of Nige-ria and or in combination with a provision of an Act or a Decree.

We are therefore unable to accept the distinction which Chief Olanipekun attempted to make that the facts and circumstances of this case are different from those in


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Folbod Investments Limited and others v NDIC (1997) 1 FBTLR 165. We agree and adopt the view of this Court where it stated:–

“By the combined effect of sections 4(1) and 5(1) of the Failed Banks Decree No. 18 of 1994 (as amended) the word judgment in section 5(1) of the Decree must be given a narrow interpretation to mean final judgment only. Consequently, section 5(1) of the De-cree prescribes a right of appeal only against a final decision of the Lower Tribunal and not against its interlocutory decision.”

In the result, we are of the view that the preliminary objec-tion succeeds and is upheld. We agree that the ruling of the Tribunal dated 4 August, 1998 is an interlocutory decision and did not finally decide the rights of the parties and hold that the appeal must be and is hereby struck out for want of jurisdiction.



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Nigeria Deposit Insurance Corporation v Alpha Sofitel Hotels Plc and others

SPECIAL APPEAL TRIBUNAL, LAGOS COKER, J, AJAYI-OBE S.A.N. Date of Judgment: 27 JANUARY, 1999 Suit No.: SAT/FBT/451/98

Appeal – Special Appeal Tribunal – Whether can entertain Appeal by interested person – Section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) – Scope thereof Jurisdiction – Inherent jurisdiction – Meaning thereof – When exercisable – Whether confers jurisdiction which is not statutory Statute – Section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) whether inconsistent with section 222(a) 1979 Con-stitution – Where a provision of the Decree is inconsistent with the Constitution – Which one prevails – Section 8 Failed Banks Decree No. 18 of 1994 (as amended) considered Facts Following the application filed by Nigeria Deposit Insurance Corporation, the Failed Banks Tribunal per Mariga, J gave judgment against Alpha Sofitel Hotels and others. Thereafter, Mr Tayo Adesanya and others brought an application before the Special Appeal Tribunal seeking, inter alia, for leave to appeal against the judgment of Mariga, J as interested person on ground that they are shareholders and contractors of Alpha Sofitel Hotels Plc respectively, that section 222(a) of 1999 Constitution gave them power to so do.

Opposing the application, Nigeria Deposit Insurance Corporation argued that section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) did not include interested per-sons among those that should appeal to the Special Appeal Tribunal. The applicant (NDIC) contended that though the said section 5(1) of Decree No. 18 of 1994 is inconsistent with section 222(1) of 1979 Constitution, that section 8 of the same Decree makes the provisions of the Decree to pre-vail over that of the Constitution or any other enactment.


Nigeria Deposit Insurance Corporation v. Alpha Sofitel Hotels Plc 119

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Section 5(1) Failed Banks (Recovery of Debts) and Finan-cial Malpractices in Banks Decree No. 18 of 1994 (as amended) provides:– “Section 5(1) A person convicted or against whom a judgment

is given under this Decree may within 21 days of the conviction or judgment appeal to the Special Appeal Tribunal established under the Recovery of Public Property (Special Military Tribunal) Decree 1984 as amended in accordance with the provisions of that Decree.”

Held – 1. Section 5(1) Failed Banks Decree No. 18 of 1994 (as

amended) gives the Special Appeal Tribunal jurisdiction over appeals instituted by either a convicted person or a person against whom judgment is given and not against interested person.

2. In the instant case, the Decree which established the Special Appeal Tribunal gave it no jurisdiction to enter-tain an appeal by interested persons who are not parties in the action in the Lower Tribunal. Inherent jurisdiction can only be exercised where there is a statutory provi-sion.

3. Section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) which gives the Special Appeal Tribunal ju-risdiction over appeals instituted by either a convicted person or a person against whom judgment is given is inconsistent with the provision of section 222(a) of 1979 Constitution. However, by the provision of section 8 of Decree No. 18 of 1994 (as amended) the provision of the Decree will prevail over that of the Constitution.

Application refused.


Nigerian Folbod Investments Limited v NDIC (1997) 1 FBTLR 165 NDIC v Afro-Continental Nigeria Ltd (1997) 1 FBTLR 125



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Ojogbo Olaja – Oriri of Ugborado v Itsekiri Communal Land Trustees (1973) NMLR 908 Ojukwu v Gov of Lagos State (1985) 2 NWLR (Part 10) 806 Re Madaki (1990) 4 NWLR (Part 143) 266

Nigerian statutes referred to in the judgment Constitution of the Federal Republic of Nigeria, 1979, sec-tion 222(a) Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), sec-tions 4(1), 5(1)

Counsel For the applicants: Mrs A.O. Ibrahim For the respondents: Adetunji Oyeyipo

Judgment AJAYI-OBE S.A.N.: Tayo Adesanya, Nord France Limited and Derintee and Company Ltd brought this application praying as follows:– (1) Leave to appeal as parties interested against the ruling of

Mairiga, J of the Failed Banks Tribunal delivered on the 18 March, 1998.

(2) An order deeming the Notice of Appeal filed and served as properly filed and served.

(3) An order restraining the Nigeria Deposit Insurance Corpo-ration from enforcing and or executing the judgment or tak-ing any benefit there from until the hearing and determina-tion of this Appeal.

In support of this application is an affidavit of 13 para-graphs counter-affidavit and reply to the counter-affidavit.

The first applicant, Tayo Adesanya, is a shareholder in first respondent Company while the second applicant is a major contractor in the first respondent Company (Alpha Sofitel Hotel Ltd). Although in 1992 the applicants instituted an action in respect of mismanagement of the respondents in Suit No. FHC/L/CS/22C/92 against the respondents and


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Jimi Lawal this action was not before the Lower Tribunal and there is no such Appeal before us from that suit. The judgment of the Lower Tribunal against which the appli-cants are seeking leave to appeal against as interested parties was instituted by NDIC (Liquidators of Alpha Merchant Bank Plc) against Alpha Sofitel Hotels Plc, Mr Jimi Lawal, Dr U.J. Ilsu Eli, Alhaji Lawal Garba and Alpha Properties International Limited.

It was canvassed whether the applicants should have been joined in the action. They are not directors and even if they are, NDIC is not compelled to join all the directors. On the other hand, their interest could be better determined if they applied to be joined in the Lower Tribunal. There is enough evidence to show that the applicants were aware that NDIC on behalf of Alpha Merchant Bank Plc commenced the ac-tion to recover the debt owed by the first respondent. Uncon-troverted facts deposed by the respondents show that the ap-plicants are aware of the application by NDIC. The address of the applicants is the same as that of the respondents. The principal Counsel in this application appeared for the fourth respondent in the Lower Tribunal. Having been aware of ac-tion, they failed to apply to be joined in the Lower Tribunal. Although the principal Counsel deposed that the fourth re-spondent withdrew his instructions, the fact remains that the applicants knew about the action brought by NDIC.

The applicants deposed in their reply to the respondents’ counter affidavit that they applied to be joined in the main application. The only application exhibited is the one for stay of proceedings and nothing more was said about the ap-plication for the purported joinder.

In Re Madaki (1990) 4 NWLR (Part 143) 266 relied on by both parties, the Court of Appeal observed that section 222(a) of the 1979 Constitution is not intended to apply to a person who stands by and allows his battle to be fought to his knowledge and on his behalf by others and who after judgment applies for leave to appeal as an interested party. (See also Ojogbo Olaja-Oriri of Ugborodo and others v It-sekiri Communal Land Trustees (1973) NMLR 908.)


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The most important issue to be determined in this applica-tion is whether this Special Appeal Tribunal has jurisdiction to entertain this application. This Special Appeal Tribunal called on parties to address it on jurisdiction. Mrs A.O. Ibrahim on behalf of the applicants submitted that under section 222(a) of the 1979 Constitution, a person who had interest in a matter can appeal with leave, the right she says, the Failed Banks Decree cannot take away. She referred to Ojukwu v Gov of Lagos State (1985) 2 NWLR (Part 10) 806, section 5 of Decree No. 18 of 1994 and Re Madaki (supra). The application was brought under section 222(a) of the 1979 Constitution and the inherent jurisdiction of the Tribunal.

Adetunji Oyeyipo on behalf of the respondents submitted that the only appellate jurisdiction that can be exercised by Special Appeal Tribunal (“SAT”) is that conferred by sec-tion 5(1) Failed Banks Decree No. 18 of 1994 and that sec-tion 222(a) of the 1979 Constitution does not apply to the Tribunal as it is not a court set up by the Constitution. He referred to the Supremacy and Enforcement of Power De-cree No. 15 of 1984. The respondents’ Counsel further sub-mitted that SAT has no inherent jurisdiction to entertain the application because there is no statutory power to exercise such jurisdiction. He cited a number of authorities.

Section 5(1) of the Failed Bank (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) provides:–

“A person convicted or against whom a judgment is given under this Decree may within 21 days of the conviction or judgment ap-peal to the Special Appeal Tribunal established under the Recov-ery of Public Property (Special Military Tribunal) Decree, 1984 as amended in accordance with the provisions of that Decree.”

This section of the Decree gives the Special Appeal Tribu-nal jurisdiction over appeals instituted by either a convicted person or a person against whom a judgment is given and no more. This is inconsistent with the provision of section 222(a) of the 1979 Constitution which enables a person who


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has interest in a matter, in a judgment to which he is not a party to appeal to Court of Appeal with leave.

The Supremacy and Enforcement of Power Decree No. 13 of 1984 provides that wherever the provision of the 1979 Constitution is inconsistent with a Decree, the Decree pre-vails.

Section 8 Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) provides:–

“Where a provision of this Decree is inconsistent with that of the Evidence Act or any other enactment or law, the provisions of this Decree shall prevail and that other provisions shall, to the extent of its inconsistency, be void.”

Section 222(1) of the Constitution therefore will not apply in this case. The only appellate jurisdiction exercisable by Spe-cial Appeal Tribunal is that confirmed by section 5(1) of Decree No. 18 of 1994.

There are a good number of instances where Special Ap-peal Tribunal is not given statutory power to do certain things such as bail pending Appeal, extension of time within which to appeal against interlocutory orders and enlarge-ment of time within which to appeal.

In NDIC v Afro-Continental Nigeria Ltd (1997) 1 FBTLR 125 in a ruling delivered by Hon. Justice AGO Agbaje said:–

“It is the view of this Special Appeal Tribunal, a creation of De-cree that it can only operate within the confines of its creation. There is no provision in the Decree creating this Special Appeal Tribunal which gives it power to enlarge or abridge the time within which to appeal to it from the Lower Tribunal.”

In Folbod Investments Limited and others v NDIC (1997) 1 FBTLR 165 the Special Appeal Tribunal held that it has no jurisdiction to hear an Appeal on an interlocutory order as the Decree establishing it did not give it such jurisdiction.

Inherent jurisdiction does not confer jurisdiction which is not conferred by an Act or a Decree. The jurisdiction of the Court or Tribunal must exist before the Court can use its


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inherent jurisdiction to make necessary orders that will en-able it enforce the provisions of the Act or Decree.

Mr Jacob in an article titled:– “The inherent jurisdiction of the Court” said:–

(a) The inherent jurisdiction of the court is a concept which must be distinguished from the exercise of judicial discre-tion.

(b) It may be exercised in any given case notwithstanding that there are rules of court governing the circumstances of each case. The powers conferred by Rules of Court are generally speaking additional to and not in substitution of powers arising out of the inherent jurisdiction of the Court.

(c) The terms “inherent jurisdiction of the Court” is not used in contra distinction to the jurisdiction conferred on Court by statute. The Court may exercise its inherent jurisdiction even in respect of matters which are regulated by statute or by rule of court so long as it can do so without contraven-ing any statutory provisions.

In this case the Decree which established the Special Appeal Tribunal gave it no jurisdiction to entertain an appeal by in-terested persons who are not parties in the action in the Lower Tribunal. The inherent jurisdiction can only be in-volved where there is statutory provision. Section 5(1) of Decree No. 18 of 1994 limits the jurisdiction of Special Ap-peal Tribunal to an appeal by a person convicted or against whom judgment is given under the Decree.

We are in agreement with the learned Counsel for the re-spondent Mr Adetunji Oyeyipo that this Special Appeal Tri-bunal has no jurisdiction to entertain this application for leave by the applicants to Appeal as interested parties. This application therefore is incompetent and is refused.

[1999] 9 N.B.L.R. (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Federal Republic of Nigeria v. Mr Ore Onakoya 125

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Federal Republic of Nigeria v Mr Ore Onakoya FAILED BANKS TRIBUNAL, ZONE V, LAGOS AUGIE J Date of Judgment: 2 FEBRUARY, 1999 Suit No.: FBFMT/L/ZV/03C/97

Banking – Loan – Overdraft – Distinction

Banking – Offences – Approving the grant of facility – Amount approved unauthorised – Amount approved not yet disbursed – Whether officer can be convicted under section 19(1) Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Decree No. 18 of 1994 (as amended)

Facts The accused was charged as follows:–

“That you Ore Sylvester Adedeji Onakoya while being a Director of Savannah Bank of Nigeria Plc in Lagos, between 20 May, 1996 and 28 May, 1996 did commit a felony to wit, you approved the granting and granted credit facility of N14M (Fourteen Million Naira) to one Alhaji Gajimi Ibrahim, a customer of the Maiduguri Branch of the Savannah Bank of Nigeria Plc without lawful authority and in violation of lending rules and regulations in force at the time in Savannah Bank of Nigeria Plc particularly memorandum 119. You thereby committed an offence contrary to section 19(a), (b) and (c) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) (hereinafter referred to as ‘the Decree’) and punishable under section 20(1)(a) of the same De-cree.”

Evidence was adduced by the prosecution to show that the accused approved the facility of N14 Million to the cus-tomer while the accused contended that he only approved N1.4 Million which was within his lending limit of N2.5 Million.

The defence Counsel urged the Tribunal to disbelieve the prosecution’s witnesses whom he categorised as “witnesses with vested interest”, and he also faulted the prosecution in that the Investigating Police Officer was not called to give evidence.



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Held – 1. An officer of the bank commits an offence under section

19(1) of the Decree once he approves the grant of any amount in any of the circumstances specified in subsec-tions (i) to (iv) to section 19(1) of the Decree. The mere fact that the grant is approved constitutes the offence, whether the sum approved was actually disbursed or not.

Per curiam “Now, in his address, Mr Gana submitted and I agree with

him, that it is important to note that the accused person is not being charged with disbursing the sum of N14 Million to PW6. The charge is that of approval which was done be-tween 20 May, 1996 and 28 May, 1996. It is therefore im-material whether the money was actually disbursed or not. Section 19(1) of the Decree provides that any Director, Manager, Officer or Employee of a bank who knowingly, recklessly, negligently, willfully or otherwise grants, ap-proves the grant, or is otherwise connected with the grant or approval of a loan, an advance, a guarantee or any other credit facility or financial accommodation to any per-son, in any of the circumstances specified in subsections (i) to (iv) to section 19(1) of the Decree is guilty of an offence under the Decree. As Mr Gana rightly submitted, the mere fact that you approve the grant constitutes the offence, whether the sum approved was actually disbursed or not.”

2. Per curiam “The accused person under cross-examination, admitted

that he was misled by PW3 and PW4 on the position of the account of PW6, in approving the grant of N14 Million. From the totality of the evidence before the Tribunal, there is no doubt whatsoever that whether the accused person was misled or not, the fact still remains that the accused person had no lawful authority to approve a credit facility of N14 Million to any person. From the above definition of the words, knowingly, recklessly, negligently and willfully, it is easy to agree with learned Counsel for the prosecution that it was a reckless thing for the accused person as Execu-tive Director to do.

I am therefore satisfied from the totality of the evidence before me that the prosecution has established the case against the accused person and proved beyond reasonable doubt that the accused person approved a credit facility of



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N14 Million to one Alhaji Gajimi Ibrahim without lawful authority and also in contravention of the lending rules and regulations in force at the time in Savannah Bank. Conse-quently, I find the accused person guilty as charged and convict him accordingly.”

3. A loan differs from an overdraft in the sense that a sub-stantial amount of money is involved and a longer period of repayment is available. Again a loan is almost in-variably given under a special agreement which will spell out the terms and conditions for the lending. The bank will also demand some form of security for the lending by a loan as against an overdraft. In both cases, however, the relationship between the banker and the customer is reversed. The legal effect is that the banker becomes the creditor and the customer the debtor. Draw-ing a cheque or accepting a bill payable at the banker’s where there are no sufficient funds to meet it amounts to a request on the part of a customer for an overdraft.

Accused convicted.


Nigerian Abadom v The State (1997) 1 NWLR (Part 479) 1 Adelumola v The State (1988) 1 NWLR (Part 73) 683 Adepetu v The State (1996) 6 NWLR (Part 452) 90 Bakare v The State (1987) 1 NWLR (Part 52) 579 Chia v The State (1996) 6 NWLR (Part 455) 465 Ibeh v The State (1997) 1 NWLR (Part 484) 632 Karimu v The State (1996) 7 NWLR (Part 462) 579 Khaleel v The State (1997) 8 NWLR (Part 516) 237 Nwoye and Sons v C.C.B. Plc (1993) 8 NWLR (Part 310) 210 Oguonzee v The State (1997) 8 NWLR (Part 518) 566 Sugh v The State (1988) 2 NWLR (Part 77) 475 The State v Danjuma (1997) 5 NWLR (Part 506) 512 The State v Danjumma (1996) 8 NWLR (Part 469) 660



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Theophilus v The State (1996) 1 NWLR (Part 423) 139 UBA Ltd v Ibhafidon (1994) 1 NWLR (Part 318) 90

Nigerian statutes referred to in the judgment Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, section 138(3) Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), section 19(1)

Counsel For the prosecution: Mr Gana For the accused: Prof. Kasunmu, S.A.N.

Judgment AUGIE J: The accused person, Ore Onakoya and two others were initially arraigned before this Tribunal on a 2 count charge alleging conspiracy to grant a credit facility to a cus-tomer of the Maiduguri Branch of Savannah Bank and the approval of the said grant without lawful authority and in contravention of the loan embargo and regulations then in force, an offence contrary to section 19(1)(a), (b) and (c) of the Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Decree No. 18 of 1994 (as amended) (hereinafter referred to as “the Decree”) and punishable un-der section 20(1)(a) of the same Decree. He pleaded not guilty to the 2 count charge, but before trial could com-mence, the prosecution was granted leave to amend/alter/withdraw the charge and replace it with a fresh charge against the accused person only as the charge against the other accused persons, Alhaji Safiyanu Obeya Allah-Kayi and Mr Baba Ibrahim Imam were dropped and they were consequently discharged by the Tribunal.

The fresh charge against the accused person, to which he pleaded not guilty, reads:–

“That you Ore Sylvester Adedeji Onakoya while being a Director of Savannah Bank of Nigeria Plc in Lagos, between 20 May, 1996


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and 28 May, 1996 did commit a felony to wit, you approved the granting and granted credit facility of N14M (Fourteen Million Naira) to one Alhaji Gajimi Ibrahim, a customer of the Maiduguri Branch of the Savannah Bank of Nigeria Plc without lawful au-thority and in violation of lending rules and regulations in force at the time in Savannah Bank of Nigeria Plc particularly memoran-dum 119. You thereby committed an offence contrary to section 19(a), (b) and (c) of the Failed Banks (Recovery of Debts) and Fi-nancial Malpractices in Banks Decree No. 18 of 1994 (as amended) (hereinafter referred to as ‘the Decree’) and punishable under section 20(1)(a) of the same Decree.”

The case against the accused person as presented by the prosecution is as follows – The first prosecution witness, Oluyemi Kuforiji, an Area Manager tendered Credit Memo-randum No. 119 admitted in evidence as exhibit A and it reads as follows:–

“In order to consolidate the Bank’s financial position and concen-trate more on the recovery of bad and doubtful debts, management have decided that there should be no further lending by Area Of-fices and Branches until further notice. Requests for facilities must be with the approval of the line Executive Director in consultation with the Managing Director/Chief Executive. For the avoidance of doubt, all Lending Officers are to comply with this directive. Any breach would attract appropriate sanctions.”

PW1 also identified the accused person as his former boss, an Executive Director in the Bank, and testified that as a member of the Management of the Bank, the accused person was very much aware of the contents of exhibit A, as exhibit A was written by the accused person himself and typed in his office for PW1’s signature. He further testified that the accused person had a lending limit of up to N1 Million for unsecured limit and N2.5 Million for secured limit, and ex-plained that unsecured facilities are facilities granted without security, secured limits are those secured by cash, third party cash, or legal mortgages and properties and that by Savan-nah Banks policy, the mere deposit of title deeds is not a se-curity. He further testified that what gave rise to this trial was a N14 Million facility granted to a customer in Maiduguri which was approved by the accused person who had no power to grant such an amount even if it was N1.4 Million and not N14 Million, and that as Credit Officer, he


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could say that the facility of N14 Million was not secured and in view of exhibit A, that it is not within policy to grant the said facility.

PW2 is Jerome Chukwudozie Ezegbu, a retired Banker. He gave evidence that in September, 1995, he and the ac-cused person were appointed Executive Directors to the Transitional Supervisory Board of Savannah Bank by the CBN/NDIC but he was later appointed Acting Managing Director of the Bank in May, 1996. As to what gave rise to this trial, PW2 testified as follows – sometime towards the end of July, 1996, he received a report that the account of a customer of the bank in Maiduguri was overdrawn to the tune of between N14 and N16 Million; he was staggered by that report because the customer, Alhaji Gajimi Ibrahim, was known to be operating on creditor basis and was known to have average credit balance of about N60 Million per month, so he could not understand his account being over-drawn to that extent; he quickly summoned the Chief In-spector of the Bank and gave him the disturbing information and instructed him to proceed to Maiduguri for an on the spot investigation; shortly after, the Chief Inspector submit-ted a Preliminary Report showing that the account had been overdrawn since sometime in May, 1996 with a peak over-draft position of roughly N14 Million; the Chief Inspector’s Report contained a photocopy of a fax message from the Area Manager, Kano to the Executive Director in which the Area Manager referred to the approval already given and was asking for a continuation of that approval which was for a temporary overdraft of N14 Million; and that the Execu-tive Director in his own handwriting confirmed the ap-proval. PW2 said:–

“The next thing I did was that I invited the other Executive Direc-tor, Alhaji Muktar Alkali Mahmoud to my office. I was the Acting Managing Director/Chief Executive Officer, then I also invited the accused person. Three of us sat when I broke the news, that is the development of unauthorised overdraft of N14 Million. The ac-cused person paused for a moment and then profusely apologised to me as Acting Managing Director remarking that he knew how I felt. There was a silence, then Mr Onakoya (accused person)


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spoke again and remarked that he thought the approval he gave was for N1.4 Million and not N14 Million. Almost in unison, the two of us ie Alhaji Mahmoud and myself retorted that he should not add insult to injury. I passed the Report to him. He went through it, paused for a while and then told us that he would do his best to ensure that the full money was recovered.”

A number of documents were tendered by the prosecution and admitted in evidence through PW2 in his evidence in chief. To start with, he identified exhibit A as a circular they, including the accused person, caused to be issued sometime in December, 1995 which froze all lending powers of the Area Managers and Branch Managers and directed that any lending whatsoever would be by the Executive Di-rector in consultation with the Managing Director.

Furthermore, PW2 testified that at the same time they had to write to CBN to advise them of the financial condition of the bank and seek a dispensation to enable them review fa-cilities already extended, and extend small new facilities which was granted by CBN. A letter to CBN from Savannah Bank dated 28 December, 1995, titled “Appeal For Forbear-ance to Lend” and signed by the accused person and Mah-moud Isa Dutse Ag. Managing Director was admitted in evidence as exhibit B1. The reply from Central Bank of Ni-geria to Savannah Bank dated 11 January, 1996 with the same title was admitted as exhibit B2. Two photocopies of the fax message allegedly attached to the Chief Inspector’s Report and the photocopy of the same Fax message alleg-edly attached to the reply to a query by the accused person was also admitted as exhibits C1 and C2, and exhibit D re-spectively.

During cross-examination by Prof. AB Kasunmu S.A.N., learned Counsel for the accused person, the following documents were admitted in evidence through PW2 – ie a memo dated 21 March, 1996 titled “Lending Limits” as ex-hibit E1–D; A memo dated March 18, 1996 titled “Lending Limits” as exhibit E2–D; A copy of the 88th Board Minutes dated 3 June, 1993 and headed “Review of the Lend-ing/Expenditure Limits of the Executive Committee, Manag-ing Director and Executive Directors” as exhibit E3–D; A


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query issued to the accused person by GA Ogunleye, Chairman – Transitional Supervisory Board, dated 26 Au-gust, 1996 and titled “Chief Inspectors Interim Report on Unauthorised Overdraft of N14 Million at Maiduguri Branch to Alhaji Gajimi Ibrahim Current Account 1521039862” as exhibit F–D; A letter dated August 13, 1996 and titled “Re-Gajimi Ibrahim’s Account – Maiduguri Branch” from the accused person to the AGM (North) as exhibit G1–D; A memo from the MD/CEO to the accused person dated 15 August, 1996 and titled “Re-your memo dated 13 August, 1996 to AGM (North) – Alhaji Gajimi Ibrahim’s A/C – Maiduguri Branch” as exhibit G2–D.

PW3 is Alhaji Safiyanu Allah-Kayi, who was discharged as the second accused person. He gave evidence that some-time in 1996, on the 24 May, 1996, the accused person called him on the phone from Lagos and informed him that Alhaji Gajimi Ibrahim was in his office the previous day to request for a temporary overdraft facility of N14 Million, that he had asked Alhaji Gajimi to go to Maiduguri and de-posit the two C of O’s to cover the exposure, and that he has approved the request for him so PW3 should get Maiduguri on the phone to find out whether he had actually deposited the two C of O’s as he had been trying but was finding it difficult to get Maiduguri on the phone. PW3 further testi-fied that he got the Branch Manager in Maiduguri on the phone and the Manager confirmed that Alhaji Gajimi Ibra-him had given him the two C of O’s due for his personal house and the other for his guest house; thereafter he re-duced the confirmation to a handwritten memo which he faxed to the accused person so that the accused person would give his approval in writing, which the accused per-son did and faxed to them and he, PW3, conveyed same to Maiduguri. He explained that the approval was in the same document faxed to the accused person, and identified exhib-its C1 and C2 as his handwritten note to the accused person on which was minuted an approval for N14 Million and ex-hibit D as a copy of same except for two dots in the figures, which he alleged were inserted to make the approved sum


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that for N1.4 Million and not N14 Million. He further testi-fied that it is not true that the accused person approved N1.4 Million and insisted that what was approved was N14 Mil-lion which was conveyed to them.

PW4 who was discharged as the third accused person is Baba Ibrahim Imam, the then Branch Manager in Maiduguri. He testified that PW3 telephoned him to inform him that a facility of N14 Million had been approved for Al-haji Gajimi by the accused person and that the only condi-tion for disbursement was his two C of O’s and when he gets the C of O’s he could disburse the money. PW4 said he also rang the accused person to confirm from him and the ac-cused person informed him that he had told PW3 that he ap-proved the facility of N14 Million and that he should discuss the details with PW3, so he, PW4, went ahead to disburse the funds. A copy of exhibits C1, C2 and D lifted from the Maiduguri Branch of Savannah Bank was identified and admitted in evidence through PW4 as exhibit H. During cross-examination, a copy of two cheques for N3.5 Million and N10 Million was admitted through PW4 as exhibit I.

Shamsudeen Adelani Bakare, an Assistant Chief Inspector with Savannah Bank testified as PW5. He gave evidence that he was directed by his Chief Inspector on the instruc-tions of the MD/CEO to proceed to Maiduguri and investi-gate an alleged granting of an unauthorised overdraft of N14 Million and that his findings were – that the Area Manager faxed a message to the accused person on the 24 May, 1996 and the accused person in turn faxed the same message back to the Area Manager with his authority for three days for the facility to be granted to the customer, effective 27 May, 1996; that according to the fax message, there was a request for N14 Million and the accused person approved the grant-ing of the accommodation of N14 Million facility for three days; that exhibit C2 shows that the Area Manager requested for N14 Million, exhibit D indicated that the Area Manager requested for N1.4 Million as there is a point between 1 and 4, and exhibit H indicated N14 Million.

The customer in question, Alhaji Gajimi Ibrahim testified on behalf of the prosecution as PW6. He gave evidence that


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sometime on the 23, 24 or 25 May, 1996 he came to Lagos from Maiduguri to see the accused person and requested for a loan of N14 Million and the accused person told him to go back to Maiduguri that he will inform the staff in Maiduguri to give him the money and that when he got back to Maiduguri, the staff of the Bank came to him and informed him that the accused person directed them to give him N14 Million. He confirmed that they gave him the money in in-stalments and he also gave them documents for two of his houses and was given two papers to sign. He further testi-fied as follows:–

“I have two things to tell the Court. By my position as a Moslem and being 40 years old with 17 children, the loan granted me was N14 Million and I was given N14 Million and I have paid the N14 Million. So I will not come to this Court to deny that he gave me N14 Million. It was on the basis of the N14 Million that I was de-tained in Lagos for 9 days. If I see the Area Manager, Kano I will not know him because I have not seen him in a long time. It was the accused person that I asked for the N14 Million and it was on his directions that his staff came to tell me he had approved the loan of N14 Million. It is not a case of me conniving with the Branch Manager of the Maiduguri Branch. As I said earlier, I have never gone to see the Area Manager, Kano. As for the Branch Manager, he came to me in the house one afternoon to inform me about the approval by the accused person of N14 Million and he came with papers and I signed. They did not give me the money immediately until after I had given them the documents for my house. I have never asked the accused person for a loan of N1.4 Million before or after the N14 Million transaction.”

During cross-examination by Prof. Kasunmu, the summons for bail on behalf of Alhaji Safiyanu Obeya Allah-Kayi (PW3) and the Affidavit of Alhaji Gajimi Ibrahim (PW6) was admitted in evidence through PW6 as exhibits J–D1 and J–D2 respectively.

The last witness for the prosecution, Mouktar Alkali Mahmoud, an Executive Director in Savannah Bank, testi-fied as PW7. He gave evidence that sometime in the middle of August, 1996, PW2 invited him to his office where he also met the accused person, and that it was at that time that PW2 asked the accused person why he granted a facility of


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N14 Million to a customer of Maiduguri, and the accused person responded by saying he was sorry to PW2, that he would do everything possible to get the customer to repay the money, and also added that he thought he only approved N1.4 Million. PW7 further testified that such a grant is not a normal transaction which he considered was outside the au-thority of a Director. He explained that the procedure for such a grant is that the customer must have a banking rela-tionship with the bank; he must apply through the branch where he has the account normally; this is processed to Head Office for appropriate consideration; the consideration will be done by the Line Director; it will be brought to the Ex-ecutive Committee where it will be deliberated upon; if it is within the Executive Committee’s power they will take a decision otherwise they will forward the recommendation to the Board; when it is considered, a decision will be con-veyed to the Branch who will advise the customer.

In the case of the defence, Wudaya Idris Abbas, the Branch Manager of Maiduguri Branch of Savannah Bank, was subpoenaed to tender documents. A copy of a subpoena duces tecum ad testificandum, statements of account in re-spect of Account Number 1521039862 belonging to PW6 were admitted in evidence through him as exhibits K–D and L–D respectively.

The accused person himself testified as DW2. He gave evidence that he had met PW6 three times – The first time in January, 1996 at Maiduguri when he went on a familiarisa-tion tour of the Northern Regional Administration and since he could not understand Hausa, PW3 and PW4 interpreted during their discussions; the second time was the day PW6 came to Lagos in March, 1996 at the request of PW4 who called the accused person and told him that PW6 had run out of cash and that he would want the accused person to allow him draw some money in Lagos, on that occasion, PW6 was accompanied by a retired Wing Commander friend of his called Ibrahim who interpreted for them; the third time, the accused person was at an Executive Committee meeting when he was informed that PW6 wanted to see him urgently,


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and as an important customer, he was allowed to go out briefly to meet him. He then said:–

“He was already seated in my office and I discovered that he was not accompanied by anybody to interpret our discussions so there was no basis to hold discussions. When I came in, I said ‘Alhaji, how are you?’ And he answered ‘I dey’ and started speaking in Hausa I did not understand. He said ‘ED, me want OD’ or some-thing like that. ‘OD’ to me meant overdraft. No figure was men-tioned, how could I give it. My response was ‘Alhaji’ me dey meeting, go branch go branch. Prior to my meeting with him, I did not have any discussions with the Area Manager in Kano or the Branch Manager in Maiduguri. I did not discuss with anybody. On the 23 May, PW3 called me from Kano and said ‘Sir, the Branch Manager has been trying to contact you on the phone on a request from Alhaji Gajimi Ibrahim’. I said to him ‘the customer was in my office the day before and we could not discuss because he was alone and I was in a meeting’. He said what the customer (PW6) want was a TOD (Temporary Overdraft) of N1.4 Million that the customer needed the money to add to his own money to buy some produce for export to a West African country. He said PW6 was expecting a Bank Draft of about N10 Million within the next two days from the Dangote Group and he said he was wondering if I could give an approval. My response was that given the impor-tance of Gajimi (PW6) to the Branch, with a turnover of N3 Bil-lion in a year and the Bank earns over N12 Million on charges alone in a year, I would not object to considering the request. But I told PW3 that the amount must be fully secured in line with the Bank’s credit policy.”

The accused person as DW2 further testified that he in-structed the Manager to obtain some form of tangible secu-rity to protect the bank’s position, and that he should not do anything until he received his written confirmation and PW3 replied that he would not leave the Bank unduly exposed. Thereafter, he said, he did not hear anything from PW3 until Monday, 27 May, 1996 when he came back to his office and saw a fax from PW3 in his urgent file requesting for N1.4 Million after confirming that they had obtained two title documents as security and payment would be made by 30 May, 1995. The accused person admitted he approved the request for N1.4 Million and minuted his approval on the fax that came through the fax with his red ink and then put it in his out tray for his staff to handle, explaining that he


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expected his staff to fax the fax message back to PW3 and then they will make a photocopy for his personal file and they will mail the original fax that had his comment in red ink back to PW3, and that there was no need for PW3 to send the original handwritten memo as all he needed was the approval in red ink on the fax that was in his urgent file.

In addition to his oral testimony, the following documents were admitted in evidence through the accused person as DW2 – A copy of the 82nd Board Minutes dated 7 May, 1996 describing what a security is, as exhibit M–D; A copy of the reply to a query dated 19 August, 1996 as exhibit N–D; A copy of a statement of account marked “IV” admitted as exhibit O–D; copies of queries, Reports, Statements, Min-utes of meeting and memos on the subject “Payment of N83,500,000 against non-existing uncleared effect at Maiduguri to Alhaji Gajimi Ibrahim, holder of Current Ac-count Number 1521039862” as exhibits P1–D to P9–D re-spectively.

Now, the accused person is being charged with an offence contrary to section 19(1)(a), (b) and (c) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) (hereinafter referred to as the “Decree”). Section 19(1)(a), (b) and (c) of the afore-said Decree reads as follows:– “19(1) Any Director, Manager, Officer or Employee of a bank

who:– (a) knowingly, recklessly, negligently, willfully or oth-

erwise grants, approves the grant, or is otherwise connected with the grant or approval of a loan, an advance, a guarantee or any other credit facility or financial accommodation to any person:–

(i) without adequate security or collateral con-trary to the accepted practice or the bank’s regulations;

(ii) with no security or collateral where such se-curity or collateral is normally required in ac-cordance with the bank’s regulations;

(iii) with a defective security or collateral; or (iv) without perfecting, through his negligence or

otherwise, a security or collateral obtained; or


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(b) grants, approves the grant, or is otherwise con-nected with the grant or approval of a loan, an ad-vance, a guarantee or any other credit facility which is above his limit as laid down by law or any other regulatory authority or the bank’s regula-tions; or

(c) grants, approves the grant, or is otherwise con-nected with the grant or approval of a loan, an ad-vance, a guarantee or any other credit facility to any person in contravention of any law for the time being in force, any regulation, circular, or proce-dure as laid down, from time to time, by the regu-latory authorities or by the bank.”

In his address, Mr GM Gana, learned Counsel for the prose-cution submitted that to sustain a conviction under the charge, the prosecution must prove the following:– (1) That the accused is a Director, Manager, Officer or

Employee of a bank. (2) Whether in such capacity as above, he knowingly,

recklessly, willfully or otherwise granted, or ap-proved the grant or is otherwise connected with the grant or approval of a credit facility to Alhaji Gajimi Ibrahim in the sum of N14 Million.

(3) Whether he did so without lawful authority between 20 May, and 28 May, 1996.

(4) Whether in doing so, he violated any rules and regu-lations in force at the time in Savannah Bank par-ticularly memorandum 119.

On his own part, Prof. Kasunmu S.A.N. submitted that based on the charge, it will be necessary for the Tribunal to focus attention and give answers to the following issues for the prosecution to secure a conviction against the accused person:– 1. What is the credit policy of Savannah Bank in place

at the time the incident occurred? 2. Did the accused person breach this credit policy,

thus committing an offence under the section of the law under which he was charged?


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To start with, there is no dispute as to the fact that the ac-cused person was an Executive Director of Savannah Bank. The accused person as DW2 admitted that he was at Savan-nah Bank as the Executive Director in charge of Retail and Corporate Banking from September 15, 1995 to August 22, 1996, that he had responsibility for 83 Branches of the Bank with four Regional Offices reporting directly to him, and that he was in charge of Lending, Debt Recovery, Marketing and Legal Departments.

Now, section 19 of the Decree speaks of “the grant or ap-proval of a loan, an advance, a guarantee or any other credit facility or financial accommodation to any person”. There is equally no dispute as to the fact that the accused person ap-proved the grant of a credit facility to PW6, what is in dis-pute however is – how much was approved by the accused person? The prosecution alleged that the accused person ap-proved the sum of N14 Million Naira, while the accused person claims he only approved the sum of N1.4 Million Naira and not N14 Million Naira as alleged by the prosecu-tion.

At this stage, I must address the issue of weight raised by Prof. Kasunmu, S.A.N. on the evidence of the seven prose-cution witnesses whom he categorised into “A – Independ-ent Witnesses with no Axe to Grind” and “B – Witness with Vested Interest”. It was his submission that PW1, PW5 and PW7 who are officials and director respectively of Savannah Bank are in category “A” as they were merely called to ten-der documents or to testify on the role they played in inves-tigating the alleged offence, and that PW2, PW3, PW4 and PW6 are in category “B”, ie witnesses with vested interest. He pointed out that PW3 and PW4 were jointly charged with the accused until they were dropped and used as prosecution witnesses against the accused person, and argued that even though they were aware of the provisions of section 23(1) of the Decree which provides that no witness shall “be pre-sumed to be unworthy of credit by reason only that he took part in the commission of the offence”, the section means no more than to place the evidence of accomplices on the same footing as that of an ordinary witness, subject however to the


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well established principle that the court has the power to treat a witness as unreliable not because he is an accomplice but because on a proper evaluation of his evidence, he should not be believed on oath.

In the case of PW6, he was of the view that since he was the one who took benefit of the credit facility forming the subject matter of the charge, and being a customer of the bank, his relationship was much closer with PW3 and PW4 than with the accused person and this relationship therefore affected his ability to testify truthfully before the Tribunal, furthermore, that the fact that he is not literate in English presents another problem for the Court in deciding whether or not he understood the questions put to him or that he was simply dodging.

In respect of PW2 who was the Acting MD/CEO at the time of the incident, Prof. Kasunmu S.A.N. argued that there appeared to be no love lost between him and the accused person, and that the role he played and manner he carried out the investigation of the alleged offence said to have been committed by the accused person clearly demonstrated his prejudice. He referred the Tribunal to areas where PW2 ex-hibited his prejudice against the accused person which will be considered later in this judgment, suffice it to say that the accused person had testified that:–

“My relationship with my Managing Director (PW2) was not cor-dial at all. This was traceable to the fact that as Executive Director in charge of debt recovery, I was asked by the then Managing Di-rector, Alhaji Isa Dutse to compile a list of bright officers for our debt recovery drive and the name of PW2’s Executive Assistant was on the list and he fumed that he should have been consulted. We thought it was not a serious matter but he took it in such a way that the Chairman of the Bank, Mr Ogunleye and Alhaji MK Ah-med, an NDIC Director of the Board had to come in to settle the matter. Then that led to the issue of the extra-ordinary meeting of the bank where Directors were to be appointed. For your informa-tion, the morning of the 12 August, 1996 was the time the Board gave approval to our proposal for holding that AGM on the 12 September. It was later on that day that the onslaught against me started. I was queried on the 15 August, I responded on the 19th, I was removed on the 22 August and arrested on the


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23 August before even a written complaint was sent to the Police or the NDIC. I believe that the objective was to put me in the cooler for or to prevent me from being considered as the MD or ED at the proposed Extra-Ordinary General Meeting. I was inter-ested in running, he was acting then and he saw me as a threat. He contested and lost.”

In his reply to the address by defence Counsel, Mr Gana contended that the defence had tried to give the impression that all the witnesses for the prosecution ganged up to tell lies against the accused especially PW2, PW3, PW4 and PW6 as they had been described as witnesses with vested interest in the case. He submitted that whatever vested inter-est these witnesses have in the case, they had told the truth of what took place between them and the accused person. He was of the view that the demeanour of these witnesses do not portray them as liars especially PW2 and PW6, as they were very consistent and articulate in their testimony and remained unshaken even under cross-examination. He ad-mitted that it is true that PW3 and PW4 were initially charged along with the accused person and later dropped to become prosecution witnesses but argued that the charge against PW3 and PW4 which was dropped was that of con-spiracy which the accused person was also charged with and he equally benefitted from the magnanimity of the com-plainant when the conspiracy charge was dropped against the three accused persons. He further pointed out that PW3 and PW4 were never charged for approving any facility for PW6, nor is anybody charged for disbursing money to PW6. He also contended that the fact that PW6 decided to speak Hausa in this Tribunal ought not to be made an issue by the defence and urged the Tribunal to hold that PW2, PW3, PW4 and PW6 are all credible witnesses and had no preju-dice of any kind against the accused person.

To start with, I refuse to categorise the prosecution wit-nesses into “independent witnesses with no axe to grind”, and “Witnesses with vested interest” as learned Counsel for the accused person would want this Tribunal to do. The proper role of the Court or Tribunal in a criminal trial is to evaluate all the evidence before it and be sure that the case


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for the prosecution has been proved beyond reasonable doubt, but if there is doubt, whether based on material con-tradictions or lack of sufficient evidence, the benefit of that doubt must be given to the accused person. See Ibeh v The State (1997) 1 NWLR (Part 484) 632 where Belgore, JSC stated on page 651:–

“It must however be clearly herein expressed that the learned Judge made a fundamental error, contrary to our jurisprudential tradition, in the assessment of the evidence of the prosecution wit-nesses and this unfortunately goes to the very basis of the convic-tion. He divided the prosecution witnesses into two ie the ‘official witnesses’ comprising the Policemen, and the ‘non-official wit-nesses’ comprising the civilians. There is nothing like this division of prosecution witnesses in the Evidence Act or the procedural law as to criminal prosecution; neither is there a division like this in even civil matters. Learned trial Judge then went ahead to dis-believe the ‘official witnesses’ and believed the ‘non official wit-nesses.’”

It is also the law that where evidence led in a case is reliable and true in fact, the fact that the witness has a grouse against the accused person will not weaken the validity or credibil-ity of his evidence. So long as such evidence has been care-fully considered and is found to be direct, unassailable and true, the mere fact that the witness is the mortal enemy of the accused person will not render his evidence unreliable. (See Karimu v The State (1996) 7 NWLR (Part 462) 579 and Chia v The State (1996) 6 NWLR (Part 455) 465.) In any case, no event happens in a vacuum without being caused or causing other facts or influencing them. These other facts, the antecedent facts and the subsequent events form the surrounding circumstances of each case. The evi-dence of a witness to command and commend belief must therefore accord with the surrounding circumstances of each case as a whole. The credibility of a witness may also de-pend upon his knowledge of the facts of which he testifies. Other facts to be considered before believing a witness are his disinterestedness, his integrity, his veracity and his being bound by oath to speak the truth. (See Adelumola v The State (1988) 1 NWLR (Part 73) 683 and also the case of


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Sugh v The State (1988) 2 NWLR (Part 77) 475 where the Court held that:–

“It is trite law that the assessment of credibility of a witness is a matter within the province of the trial Court, as it is only that Court that has the advantage of seeing, watching and observing the witness in the witness box. It has the liberty and privilege of be-lieving him and accepting his evidence either as a whole or in part in preference to the evidence adduced by the defence.”

The question for determination at this stage is – how much credit facility was approved for PW6 by the accused person? Let us now examine the evidence before the Tribunal on this issue. PW6, the customer in the centre of it all who benefited from the transaction, stated as follows in his evidence in chief “the loan granted me was N14 Million and I was given the N14 Million and I have paid the N14 Million. So I will not come to this Court to deny that he gave me N14 Mil-lion”. He testified that he met the accused person at Savan-nah Bank Headquarters; that he asked the accused person to give him a loan of N14 Million; that the accused person told him to go back to Maiduguri that he will inform the staff in Maiduguri to give him the money; that when he got back to Maiduguri, the staff of the Bank came to him and informed him that the accused person had directed them to give him N14 Million; that they gave him the money but not immedi-ately; that he gave them documents for two of his houses and he was given two papers to sign.

During cross-examination by Prof. Kasunmu, S.A.N., PW6 replied as follows:–

“Yes, the accused person was called out of a meeting to see me. I am not sure if it is a meeting or not but he was not in his office and some women working with him went to call him to see me. I had met the accused person before. He used to tour round the branches and he even came to my own house in Maiduguri. I can not say whether it was three times or not that I met with the accused per-son but I have sworn to tell the Tribunal the truth. What I know is that I went to his office, sat there, they called him and I was given a Fanta to drink. I laid my complaint to the accused person and we discussed and I left. The accused person can understand Hausa and I spoke Hausa. The Hausa I spoke, the accused person will under-stand and the English he spoke I would understand also. When


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they come on tour, he was in company of women and others so we discuss in group not me and him directly. To me he would say ‘ranke dede, sanu, etc’ So to me he understands Hausa and we did not discuss directly in my house. I came to him in Lagos and he told me to return to Maiduguri that the people in Maiduguri will give me the money. This is the first time I went to look for loan in Savannah Bank. The Manager in Maiduguri has not given me N30 not to mention N80 Million without authority. I do not know any-thing about the query that the Manager mentioned before the Tri-bunal given to him for giving me N80 Million without authority. I do not know Kusamotu and I never took N16 Million loan from her when she was ED. I requested for N14 Million from the Bank and that was what I was given. If I did not mention N14 Million to the accused person how will they give me the N14 Million in Maiduguri. I asked him for a loan for my business since I am a trader. I was sitting in my own house when officers of the Bank, the Manager came to my own house and told that the ED had ap-proved. When I left Lagos for Maiduguri after two days or so be-cause I travelled overnight by flight. I was sitting in my office in the Market when the Manager came to inform me that the request that took me to Lagos had been approved. There and then they brought some papers which I signed. I did not go to the Manager before then. And on seeing the staff of the Bank in my office I as-sumed that the man in Lagos had communicated to them and I am not going to lie for what the Manager did not do or what the ac-cused person did not do. Before I went to Lagos to see the accused person, I did not go to Kano to see the Area Manager. It was my decision to see the accused person in Lagos without seeing the Branch Manager in Maiduguri. They always bring me my state-ments of account regularly. I am not educated enough to read the statements to check but if I have N2,000 in my account I know I have N2,000 in my account. I swear to God that I did not agree with the Managers in Kano and Maiduguri to get the N14 Million and I do not know about any N10 Million used to cover me. I can not identify this statement because I can not read. I will be sur-prised if a witness testified as to an agreement between us to do such a thing but I know that I did not do anything like that. I was in Lagos one Thursday, the 23rd or so but I did not know when the accused signed the approval. I do not know and I cannot tell whether he gave the approval before the accused person gave the approval. All I know is that I came to Lagos and he told me that I should go back to Maiduguri and the staff thereafter came to tell that he had approved my request. In the affidavit (exhibit J–D2) I am referring to the approval he gave before I was given the money. This is an affidavit written when the second accused


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(PW3) was granted bail but I cannot read it. I have sworn to tell the truth and that is what I have said before this Tribunal. All I know is that I was given the money after I came back from Lagos. So I do not know if it was before or after the accused person gave the approval.”

During the above cross-examination of PW6, the defence tendered the summons for bail on behalf of PW3 before this Tribunal and the attached affidavit of PW6 admitted in evi-dence as exhibits J–D1 and J–D2 respectively. Paragraphs (1) and (3) of exhibit J–D2 dated 10 October, 1996 reads as fol-lows:– (1) That I was to re-confirm that the loan of N14,000,000 was

approved by the Executive Director Mr Ore Onakoya when I visited him in Lagos Head Office on the 23 May, 1996.

(2) . . . (3) That it was after the approval was sent to Maiduguri

through Kano Area Office that the said amount of N14,000,000 was paid to me.

On his own part, PW3 testified as follows – That sometime in 1996 on the 24 May, 1996 the accused person called on the phone from Lagos to tell him that PW6 was in his office the previous day to request for a temporary overdraft facility of N14 Million and that he had asked PW6 to go back to Maiduguri and deposit the two C of O’s to cover the expo-sure as he has approved the request for PW6 but that PW3 should get Maiduguri on the phone to find out whether PW6 had actually deposited the two C of O’s as he had been try-ing and it was difficult to get Maiduguri on phone that he immediately got the Branch Manager of the Maiduguri Branch to confirm whether PW6 had given him the two C of O’s and the Branch Manager confirmed that the PW6 had deposited the two C of O’s for his personal house and the other for his guest house; that after getting the confirmation, he reduced it to a handwritten memo and faxed it to the ac-cused person so that he would give them approval; that the accused person faxed the approval back to them which he conveyed to Maiduguri; that the approval was in the same document he faxed to the accused person; and that exhibits C1 and C2 are two of the handwritten notes to the accused


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person and exhibit D is the same except the two dots that were inserted.

PW4, the Branch Manager of the Maiduguri Branch of Savannah Bank who actually disbursed the fund to PW6, testified that PW3 telephoned him and informed him that a credit facility of N14 Million was approved by the accused person for PW6 and the only condition for disbursement was his two C of O’s and when he got those, he could dis-burse; that he also rang the accused person and confirmed from him that he had told PW3 that he approved the facility of N14 Million; that the accused asked him to discuss the details with PW3, that thereafter he went ahead and dis-bursed the funds; that the approval of the 24th was used to disburse and the approval letter of the 27 May, 1993 was the confirmation of the approval. A copy of exhibits C1, C2 and D lifted from the Maiduguri Branch reflecting the amount approved as N14 Million was admitted in evidence through PW4 as exhibit H.

Now, the accused person in his evidence in chief as DW2 admitted that he had met PW6 before including when he went to Maiduguri on a familiarisation tour of the Northern Regional Administration; he admitted that PW6 came to see him in Lagos on the 22 May, 1996 and he was called out of his office to meet PW6 who was already seated in his office; he admitted that PW6 asked for OD which to him meant overdraft; he denied the fact that any figure was mentioned and claimed that he merely asked PW6 to “go branch, go branch” as he could not understand what PW6 was saying in Hausa; contrary to what PW3 said, he claimed it was PW3 who telephoned him to discuss a request from PW6 for Temporary Overdraft of N1.4 Million, that his response was that given the importance of PW6 to the branch, with a turn-over of over N3 Billion in a year, he would not object to considering that request, and that he told PW3 that the amount of the request must be fully secured in line with the Bank’s Credit Policy; he admitted he instructed PW3 to ob-tain some form of tangible security to protect the Bank’s po-sition but that he told PW3 not to do anything until he has


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received his written confirmation and that PW3 replied “Sir, I will not leave the Bank unduly exposed; he admitted that on the 27 May, 1996 he received a fax message from PW3 confirming that they had received two title documents from PW6 as security; he admitted he minuted an approval on the fax message with his red ink which he put in his out tray for his staff to handle; he denied approving the sum of N14 Mil-lion and claimed that he approved N1.4 Million only.

During cross-examination by Mr Gana, he replied as fol-lows:–

“Yes, I approved N1.4 Million for PW6. PW6 did not discuss any amount when he came to Lagos. That is what it is, that PW6 with a turnover of N3 Billion from whom the bank makes N12 Million on charges alone could leave Maiduguri to ask for N1.2 Million, from even the Manager or Area Manager. It is not true that I ap-proved N14 Million and when I realised my action was wrong I inserted a heavy dot in 1 and 4 to make it appear as N1.4 Million.”

Now, certain facts are easily discernible from the totality of the above evidence:– 1. The accused person and PW6 knew themselves. 2. The accused person acknowledged that PW6 was an impor-

tant customer to the bank, and this is further corroborated by his assertion in paragraph 10(e) of his reply to the query issued to him (Exhibit N–D) as follows:–

“The global turn over on the customer’s account in Sa-vannah Bank had always been in excess of N2.5 Billion P.A. and the fact the substantial credit balances were sources of cheap funds for Bank influenced my decision to agree (sic) a temporary overdraft of N1.4 Million which one would expect should be repaid within three days. The account performance notwithstanding, I in-sisted that some form of security must be taken and the 2 title documents obtained from the customer attested to this. (Please see attachment V).”

3. PW6 came to Lagos to see the accused person and was al-ready seated in the office of the accused person before the accused person was called out of a meeting to attend to him.

4. Whether it was PW3 who called the accused person on the 23 May, 1996 as claimed by the accused person or the ac-cused person who called PW3 as claimed by PW3, the fact still remains that PW3 and the accused person had a discus-


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sion on the request of a credit facility for PW6, and this is evident from the opening paragraph in exhibits C1, C2, D and H, which reads “We discussed the TOD request of Alh. Gajimi Ibrahim of our Maiduguri Branch.”

5. PW3 and PW4 complied with the instructions of the ac-cused person to obtain some form of tangible security to protect the Bank’s position and PW4 collected two title documents from PW6. This is also corroborated by the statement of the accused person in exhibit N–D and the second paragraph of exhibits C1, C2, D and H, which reads “The Branch Manager has confirmed the receipt of two title documents of one of his personal house and the second his guest house. They are worth more than the exposure. I have asked him to obtain his personal guarantee in addition”.

6. The accused person minuted his approval on a handwritten fax message from PW3 in the following words clearly visi-ble on exhibits C2 and D but barely so on exhibits C1 and H – “AGM (N), Approved for three days effective today – signed Ore Onakoya Executive Director, 27 May, 1996.”

These are established facts from the evidence of PW3, PW4, PW6 and the accused person. What is in dispute however is whether the approval granted by the accused person was for N1.4 Million as claimed by the accused person or N14 Mil-lion as alleged by the prosecution witnesses. The third para-graph of exhibits C1, C2 and H reads “Please confirm your action in approving this TOD of N14 Million for on (sic) week payable on 30 May, 1996” while the third paragraph on exhibit D reads “Please confirm your action in approving this TOD of N1.4 Million for on (sic) week payable on 30 May, 1996”. Exhibits C1, C2 and D were admitted in evi-dence through PW2 who explained that exhibits C1 and C2 were photocopies of the fax message attached to the Chief Inspector’s Report while exhibit D is a photocopy of the same fax message attached to the reply to a query by the ac-cused person. Exhibit H is a photocopy of the same fax mes-sage from the file in the Maiduguri Branch of a Bank.

In his address, Prof. Kasunmu, S.A.N. submitted that for the Tribunal to come to a decision based on these exhibits that what the accused approved was N14 Million and not


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N1.4 Million, the Tribunal must give answers to the follow-ing issues:– (1) Where did PW2 obtain exhibits C1 and C2 which he

tendered in Court and on which he concluded that it was N14 Million that the accused person approved. PW2 stated that he got these from the Inspection’s Report submitted by PW5 while PW5 stated that he never attached any fax message to his Report.

(2) If C1 and C2 are photocopies of the same docu-ments, who inserted telephone numbers on one of these documents. When was this done and how?

(3) If what PW5 saw at the Maiduguri Branch in the course of his inspection in August, 1996 was exhibit C (the message without telephone numbers), how and when did PW4 come in possession of exhibit H which PW5 said was not in the file in Maiduguri when he inspected the Branch in August, 1996.

(4) If exhibit D attached to the accused person’s reply is the same as exhibit H, exhibit C and exhibit D is the clearest of these exhibits, how come that exhibit D will show distinctly that the amount approval was sought for is N1.4 Million while there will be any argument as to whether the figure in exhibit H and exhibits C1 and C2 was N14 Million.

He further submitted that the most damaging aspect of this case is the existence of a fax message with telephone num-bers on the message. And this was clearly a forgery – a document doctored and prepared to nail the accused person, furthermore, that it would seem from the above that both the original of the fax sent by PW3 and the original of the handwritten approval of the accused person were suppressed and or destroyed. He also argued that the Tribunal is handi-capped by the failure of the prosecutor to call the IPO whose investigation would have been crucial on this issue, and concluded that from the analysis of the exhibits, it cannot be said that the prosecution has proved beyond reasonable doubt that what the accused approved was N14 Million and


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not N1.4 Million, as in his view, the documents are so unre-liable in terms of their source that one would hesitate to mar the otherwise distinguished banking career of the accused person based on those documents.

Learned Counsel for the accused person also contended that while recognising the principle of law that the choice of what witnesses to call is the prerogative of the prosecutor, it has also long been recognised that a key witness for a suc-cessful criminal prosecution is the IPO, and that to leave him out is like trying to make hay without straw. He was of the view that the non-calling of the IPO in the instant case has left a lot of gaps in the case for the prosecution, and posed the question – How for example, can the prosecutor explain the following?:– (a) The whereabouts of the original fax message sent by

PW3 from Maiduguri to Lagos? Did the IPO ask for this and what was the response which he got.

(b) Where is the original of the handwritten approval of the accused?

(c) Did the IPO see the various versions of the fax mes-sages and did he investigate the discrepancies in these documents?

(d) Why for example should there be telephone numbers in one but not in the others?

(e) Was there any investigation by the IPO of the lodg-ment of N10 Million into the account of PW6 after the transaction giving rise to this prosecution and its reversal? It will be recalled that the accused person raised the issue in his reply to the query issued by the chairman.

(f ) Was any credit information ever sent by PW4 to La-gos via Kano and if so, how and when was this sent and why was it not available in Lagos?

(g) Did the IPO not investigate the issue as to when payments were in fact made to PW6 on the cheques issued to him?


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(h) Which Statement of Account did the bank make available to the IPO – Is it exhibit O or the freshly prepared and doctored Statement of Account ten-dered by DW1 under subpoena as exhibit L?

He further submitted that these are but a few of the unan-swered questions in this case, and was of the view that they do not see how a guilty verdict could be returned in this case based on the evidence the prosecutor has decided to put for-ward before the Tribunal. He therefore urged the Tribunal to discharge and acquit the accused.

In his reply to the address by learned Counsel for the ac-cused person, learned Counsel for the prosecution who had informed the Tribunal during the trial that the IPO was in Angola, submitted that the defence did not tell the Tribunal what law or authority says an IPO must be called in all criminal trials and argued that not calling the IPO did not in any way affect the case of the prosecution, because all the persons directly involved in this case and whom the IPO must have interrogated gave evidence as such, whatever an-swers the defence is looking for from the IPO could have been obtained from these witnesses and that it was a pity if the defence failed to do so.

I agree with Mr Gana. The right of the prosecution to call the witnesses it decides to prove its case is not a mere privi-lege but a prerogative. Accordingly, the prosecution is not bound to call a host of witnesses. Even one credible witness, if believed, is enough. (See Theophilus v The State (1996) 1 NWLR (Part 423) 139; Adepetu v The State (1996) 6 NWLR (Part 452) 90 and Oguonzee v The State (1997) 8 NWLR (Part 518) 566.) As learned Counsel for the prosecution rightly observed, all the persons directly involved in this case gave evidence. The Investigating Police Officer (“IPO”) would have given evidence of his investigation of the case and testified on the information elicited from the aforementioned persons during interrogation but they were in Court to give evidence directly and any unanswered ques-tions could have been elicited from them during the trial, straight from the horse’s mouth so to speak. Leaving him out


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could not in my view be likened to making hay without straw. The straws were in Court themselves and could there-fore make hay.

I also agree with Mr Gana that the defence seems to be at-taching too much emphasis on the fax message, the long and short of it all is that exhibits C1, C2, D and H are exactly the same except for the figure “N1.4 Million” in exhibit D. PW3 did not deny that the fax message in all the exhibits were in his handwriting. He merely stated:–

“Then I conveyed approval to Maiduguri. I sent a copy to them for their records having kept a copy for ourselves. That distinction be-tween C1, C2 and D are that C1 and C2 are the ones that were sent to us which I conveyed to Maiduguri Branch for their records and disbursement of the N14 Million. The amount on exhibits C1 and C2 is N14 Million. That of exhibit D, one can not really tell what it is about, the figures are different. What I see here is N1.4 Mil-lion which I do not know what it means. It is not true that the ac-cused person approved N1.4 Million, what he approved was N14 Million that was what was conveyed to us. This is not the first time the accused has been conveying such approval to us. If there is any cause to be different from what is requested for, the amount is written in words to guide the branches. The other distinction on exhibits C1 and C2 are my fax numbers and the Executive Direc-tor’s fax number back to us, which indicates an action between my office and his, while in exhibit D, there is no such number. The Executive Director’s number is written on top of exhibit C1 ie 633557, the one from my office is 636437 on the same exhibit. The same on exhibit C2. There is nothing like that on exhibit D.”

During cross-examination, PW3 replied as follows:– “The comment was cut off in exhibit C1 but it is in exhibit C2. There is an indication there but it was cut off in the machine. His comment and approval was clearly shown in exhibit C2. It was cut off on exhibit C1 by the machine.”

PW2 through whom exhibits C1, C2 and D were admitted in evidence testified that:–

“In my comments having received the reply of the accused person to the query, I observed the discrepancy on the fax message at-tached to the accused person’s reply, on that copy it read N1.4 Million. I recalled in my comments further pointing out that the decimal point was too heavy for normal writing. I observed on the time spent to make the decimal point was to ensure that the figure


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was N1.4 Million. I would have expected the accused person to have written the word in words. I also commented that when I con-fronted him with the overdraft in the presence of my colleague, Alhaji M.A. Mahmoud, I should have expected him to have screamed at the amount of N14 Million but rather he seemed to have accepted the figure only to react subsequently to say that he thought his approval was for N1.4 Million.”

In addition to these exhibits, exhibits G1–D and G2–D were admitted in evidence by the defence during the cross-examination of PW2. Paragraphs 1–6 of exhibit G1–D read:–

“You would recollect that you faxed a handwritten memo to me sometime in May, 1996 requesting for a temporary facility of N1.4 Million for our above valued customer. You also confirmed on that memo that you had obtained security in excess of the request which I approved for three days only. Since I spoke to you di-rectly, you were to instruct the Branch Manager to regularise by CR. I was shocked to learn from the Managing Director today that this bank faces a possible loss of N14 Million on the account be-cause it is now hardcored. The revelation by the Managing Direc-tor was most embarrassing especially when consideration is given to the fact that you confirmed in June that the account was in credit. Could you please let me know the true position and confirm efforts being made to recover this debt.”

Exhibit G2–D, a memo from PW2 to the accused person reads as follows:–

“I have just read my copy of your above memo which I find very misleading and diversionary. I had told you plainly that the copy of the telex containing your approval on N14 Million overdraft was/is unambiguous and clear. I plead that you do not add insult to injury by querying the Assistant General Manager (North) as it would tend to trivialise this embarrassing and scandalous situation. I have no reason to believe that you are right in your conscience to order the AGM (North) to concentrate in recovery. The least I would ask you to do formally, which I and our other colleague had privately, personally and collectively demanded on you is that you should primarily, urgently and most expeditiously address the full recovery of the unsecured and unauthorised exposure you had made on the above named. But you do not have to leave the office for the time being until I am put in a position to advise you further. This note is without prejudice to any formal official response to the unfolding saga.”


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The accused person himself did not deny that the handwrit-ten minutes on the aforesaid exhibits were his. During cross-examination, he replied thus:–

“Exhibit C2, carries my name and signature. The amount stated here looks like N14 Million. Exhibit H is not very clear so I can-not confirm that it carries my name and signature. From exhibit C2, it looks like what is required to be approved is N14 Million. In exhibit D, yes I approved N1.4 Million and it is clearer than the ones you showed to me.”

Prof. Kasunmu, S.A.N. had in his address, submitted that there is no way the Tribunal can evaluate the evidence in-cluding the exhibits in this case, without reference to the evidence and conduct of the accused person, PW3, PW4 and PW6. I wholeheartedly agree with him. It all boils down to who to believe, the prosecution witnesses who allege that the accused person approved the sum of N14 Million or the accused person who claims he only approved the sum of N1.4 Million. In every criminal case, there is always a key or star witness and any conviction will naturally be based on the evidence of such a witness. The star witness in this case is obviously PW6. He benefited from the transaction with the actual disbursement of N14 Million to him by the Maiduguri Branch of Savannah Bank on the alleged ap-proval of the accused person who was the Executive Direc-tor in the Bank in charge of lending.

Prof. Kasunmu, S.A.N. had also submitted that the unreli-ability of PW6 as a witness of truth is evidenced by his de-nial of his ever taking credit facility from the Bank when in fact, he was a recipient of an unauthorised N80 Million overdraft again from PW4. The defence tendered exhibits P1–D to P9–D which are copies of queries, reports, state-ments, minutes of meetings and memos on the subject “Payment of N83,000,000 against non-existing uncleared effects at Maiduguri to Alhaji Gajimi Ibrahim”, to show that PW4 in June, 1995 acted on verbal instruction from ADGM to disburse N80 Million to PW6. It goes without saying that the fact that PW4 had once disbursed N80 Million to PW6 on the verbal instructions of his then DGM is irrelevant and is without doubt impertinent to these proceedings. To my


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mind, the issue at this stage is whether the Tribunal can rely on the evidence of PW6 in coming to a decision in this criminal matter before the Tribunal. In this regard, I agree with learned Counsel for the prosecution, that the evidence of PW6 in this case was consistent with the oral and docu-mentary evidence presented by the prosecution. I have gone to great lengths to present in this judgment the evidence of PW6 in examination in chief and his entire replies under cross-examination, and I am of the firm view that he re-mained unshakened throughout the cross-examination.

Be that as it may, the position of the law, is that in consid-ering conflict in the testimony of a witness in criminal mat-ters, it is not the minor discrepancies but material conflicts that are crucial. (See Nwaemereji v The State (1997) 4 NWLR (Part 497) 65). For any conflict or contradiction to be fatal, it must be substantial and fundamental to the main issue in question before the Court. What is material depends on the facts of the case. (See Khaleel v The State (1997) 8 NWLR (Part 516) 237 and The State v Danjuma (1997) 5 NWLR (Part 506) 512.) Contradiction, in its ordinary sense, simply connotes absence of agreement between statements or facts in a given situation. A contradiction is regarded as material when a piece of evidence affirms the opposite of what the other evidence has stated not when there is just a minor discrepancy in matters of details. To make it material also, the contradiction must go to the essential of something being, rather than of not being. Moreover, discrepancy may depend on a witness’s astuteness and capacity for observing meticulous details. (See The State v Danjumma (1996) 8 NWLR (Part 469) 660.)

The main thing is that I watched PW6 in Court and I be-lieve him that he came to Lagos to request for a N14 Million credit facility from the accused person and I am convinced from the totality of the evidence before the Tribunal that the accused person granted his request for the following rea-sons:– (i) The accused person had variously described PW6 as

a valued customer of the Bank. He testified that – “I


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was at the Executive Committee Meeting and a message was passed to me that Alhaji Gajimi (PW6) wanted to see me urgently. As an important customer of the Bank, my colleagues allowed me to go out briefly to meet him”. Bearing this in mind, I agree with Mr Gana that it is hard to believe that PW6 will be treated the way the accused person de-scribed in his evidence by telling him “go branch, go branch” without even hearing the details of what PW6 had come all the way from Maiduguri to La-gos to request from him.

(ii) PW6 would not have immediately handed over two title documents to the Bank for his personal house and guest house to secure a temporary overdraft from Savannah Bank for the sum of N1.4 Million Naira, when the accused person himself acknowl-edged that he had a turnover of N3 Billion P.A.

The Court may presume the existence of any fact which it thinks likely to have happened regard being had to the common course of natural events, human conduct and pub-lic and private business in their relation to the facts of the particular case. See section 149 of the Evidence Act. In this regard, I do not believe the accused person that it was PW3 who telephoned him to inquire about the request of PW6 for a credit facility of N14 Million. Contrary to the submissions of learned Counsel for the accused person, it is evidently clear from the third paragraph of exhibits C1, C2, D and H which reads “Please confirm your action in approving this TOD of N14 Million (or N1.4 Million) for a week payable by 30 May, 1996 ”, that PW3 was asking for a written ap-proval to cover an earlier approval on the telephone from the accused person. I have also critically examined exhibits C1, C2, D and H and I have no doubt whatsoever in my mind, that a dot was clearly inserted between 1 and 4 to make it appear that the sum approved was N1.4 Million.

I am also strengthened in my view that the sum approved by PW6 was N14 Million and not N1.4 Million, by the fact that PW3 stated in exhibits C1, C2, D and H that “The


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Branch Manager has confirmed the receipt of two title documents of one of his personal house with the second his guest house. They are worth more than the exposure. I have asked him to obtain in addition his personal guarantee”. To my mind, two title documents for his personal house and guest house would be more than enough to cover the expo-sure of a mere N1.4 Million but will not be out of place if it was to cover an exposure of N14 Million. In the instant case, I am satisfied that the evidence of PW6 is sufficiently proba-tive of the offence charged and can therefore be relied on, and find as a fact that the accused person approved N14 Mil-lion.

Now, by virtue of section 138(3) of the Evidence Act, if the prosecution proves the commission of a crime beyond reasonable doubt, the burden of proving reasonable doubt is shifted on to the accused. Thus, although the onus of proof does not shift in criminal case, it behoves the defence to es-tablish its own assertion. In other words, there is something like the shifting of evidential burden in criminal case. There are occasions when evidential burden could shift on to an accused person. See Bakare v The State (1987) 1 NWLR (Part 52) 579 and also Abadom v The State (1997) 1 NWLR (Part 479) 1, where the court held that, if in a criminal case, the defence asserts an impossibility or a non-existence situa-tion, he cannot expect the prosecution to prove the impossi-bility or to bring into existence what does not exist.

Be that as it may, the law is that when a defence, however weak, however foolish, however unfounded, however con-flicting is raised by the person charged with crime, that de-fence should fairly and impartially be considered. Such de-fence or defences need not be specifically put forward. It is enough if they arise from the totality of the evidence led. (See Nwuzoke v The State (1988) 1 NWLR (Part 72) 529.)

As Mr Gana rightly submitted the accused person tried to put up the following defences against the charge:– (1) That he only approved N1.4 Million.


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(2) That the N1.4 Million is within his lending limit of N2.5 Million as provided for in exhibit E–D.

(3) That exhibit A did not apply to him. (4) That the approval was to take effect from 27 May,

1996. To start with, I must point out that the banks from time to time lend money to their customers as loans or overdrafts. A loan differs from an overdraft in the sense that a substantial amount of money is involved and a longer period of repay-ment is available. Again, a loan is almost invariably given under a special agreement which will spell out the terms and conditions for the lending. The bank will also demand some form of security for the lending by a loan as against an over-draft. In both cases, however, the relationship between the banker and the customer is reversed. The legal effect is that the banker becomes the creditor and the customer the debtor. Drawing a cheque or accepting a bill payable at the banker’s where there are no sufficient funds to meet it amounts to a request on the part of a customer for an over-draft. (See UBA Ltd v Ibhafidon (1994) 1 NWLR (Part 318) 90 and Nwoye and Sons v C.C.B. Plc (1993) 8 NWLR (Part 310) 210.)

The evidence before the Tribunal, which is confirmed by the accused person is that as Executive Director, he had a lending limit of N2.5 Million for a secured loan and N1 Million for an unsecured loan. The accused person con-firmed that he attached exhibit D to his reply to the query and heading of the memo reads “TOD of N1.4 Million to Alhaji G. Ibrahim Maiduguri Branch”. In his evidence in chief, stated as follows “He said ‘ED, me want OD’ or something like that. OD to me meant overdraft”. Later on in relation to his conversation with PW3, he stated as follows – “He said what the customer wanted was a TOD (‘Tempo-rary Overdraft’) of N1.4 Million that the customer needed the money to add to his own money to buy some produce for export to the West African Country. He said PW6 was expecting a Bank Draft within the next two days from the Dangote Group.” In paragraph (1) of exhibit N–D, his reply


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to the query, he wrote that “You will observe that what I ap-proved was a N1.4 Million TOD NOT N14 Million as indi-cated on the unclear copy of the fax attached to your letter.”

Obviously, what the accused person approved was a Tem-porary Overdraft (“TOD”) and not a loan, which as I stated earlier, is almost invariably given under a special agreement which will spell out the terms and conditions for the lending. PW1, in his evidence in chief, testified that by Savannah Bank Policy, the mere deposit of Title Deeds is not a secu-rity, he then said – “On record, no individual in Savannah Bank during that period has such an approval limit of N14 Million. Even if the amount was N1.4 Million, no individual had power to grant that amount. As a Credit Officer, I would say that the facility of N14 Million was not secured” PW2 also testified that:–

“Even at N1.4 Million and I am saying so only for argument, it was outside his discretionary powers. Secondly, the purpose of the lending, no matter how temporary was not disclosed, so if the mat-ter was referred to me in that form I would certainly have declined it. Thirdly, the customer was never known to us to require any bor-rowing. Therefore any request for any borrowing would really raise many questions among which is, what had happened to the man’s business which had been giving the bank daily average credit balance in excess of N60 Million average daily. The nature of the customer’s business currency dealer is cash before supply. I just do not know how to describe the approval of N14 Million given the position of the bank, because it was outrageous and it was even outside the authority of the Executive Committee. In theory, assuming also that it was such a first class banking propo-sition, that we must treat it, assuming also that it was a very tem-porary nature, the full proposal would have passed through the three working Directors and if all three concurred to the applica-tion, I would take it to the Chairman of the Board for his concur-rence to avoid any embarrassment when the paper will be subse-quently presented to the Board. This did not happen in this case.”

PW5 also testified that – “The facility was unsecured and therefore the lending of N1.4 Million is a violation. From my investigation, Alhaji Gajimi Ibrahim (PW6) deposited title documents to his properties in Maiduguri as a security against the borrowing. But the title documents for it to be properly deposited as a security there were some documents,


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some Savannah Bank Forms that had to be signed. It is called ‘Memorandum of Deposit’ but as at the time I was in Maiduguri, the Form had not been executed by Alhaji Ga-jimi Ibrahim but the title documents were there in Maiduguri. The deposit of the title documents was therefore not a security”. PW7, who is also an Executive Director of the Bank had this to say “The accused person responded by saying sorry to the MD that he would do everything possible to get the customer to repay the money. He also added that he thought he only approved N1.4 Million. That is what happened. Such a grant is not a normal transaction. I con-sider that it is outside the authority of a Director”.

Now, in his address, Mr Gana submitted and I agree with him, that it is important to note that the accused person is not being charged with disbursing the sum of N14 Million to PW6. The charge is that of approval which was done be-tween 20 May, 1996 and 28 May, 1996. It is therefore im-material whether the money was actually disbursed or not. Section 19(1) of the Decree provides that “any Director, Manager, Officer or Employee of a bank who knowingly, recklessly, negligently, willfully or otherwise grants, ap-proves the grant, or is otherwise connected with the grant or approval of a loan, an advance, a guarantee or any other credit facility or financial accommodation to any person”, in any of the circumstances specified in subsections (i) to (iv) to section 19(1) of the Decree is guilty of an offence under the Decree. As Mr Gana rightly submitted, the mere fact that you approve the grant constitutes the offence, whether the sum approved was actually disbursed or not.

The operative words in section 19(1)(a) of Decree No. 18 of 1994 as amended, ie “knowingly”, “recklessly”, “negli-gently”, and “willfully” are defined in Black’s Law Diction-ary (6ed) as follows:–

Knowingly – With knowledge; consciously; intelligently; will-fully; intentionally; – A person acts knowingly with respect to a material element of an offence when: (i) if the element involves the nature of his conduct or the attendant circumstance, he is aware that his conduct is of that nature or that such circumstances exist; (ii) if the element involves a result of his conduct, he is


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aware that it is practically certain that his conduct will cause such a result. – The use of the word in an indictment is equivalent to an averment that the defendant knew what he was about to do, and with such knowledge, proceeded to do the act charged. Knowingly and willfully – This phrase, in reference to violation of a statute, means consciously and intentionally. Recklessly – A person acts recklessly with respect to a material element of an offence when he consciously disregards a substantial and unjustifiable risk that the material element exists or will result from his conduct. The risk must be of such a nature and degree that, considering the nature and purpose of the actor’s conduct and the circumstances known to him, its disregard involves a gross de-viation from the standard of conduct that a law-abiding person would observe in the actor’s situation. Negligently – A person acts negligently with respect to a material element of an offence when he should be aware of a substantial and unjustifiable risk that the material element exists or will result from his conduct. The risk must be of such a nature and degree that, the actor’s failure to perceive it, considering the nature and purpose of his conduct and the circumstances known to him, in-volves a gross deviation from the standard of care that a reason-able person would observe in the actor’s situation. Willfully – An act or omission is “willfully” done, if done volun-tarily and intentionally and with the specific intent to do some-thing the law forbids, or with the specific intent to fail to do some-thing the law forbids, or with the specific intent to disobey or to disregard the law. Willfully and knowingly – An act is done willfully and know-ingly when the actor intends to do it and knows the nature of the act. Deliberately.

The accused person under cross-examination, admitted that he was misled by PW3 and PW4 on the position of the ac-count of PW6, in approving the grant of N14 Million. From the totality of the evidence before the Tribunal, there is no doubt whatsoever that whether the accused person was mis-led or not, the fact still remains that the accused person had no lawful authority to approve a credit facility of N14 Mil-lion to any person. From the above definition of the words, knowingly, recklessly, negligently and willfully, it is easy to agree with learned Counsel for the prosecution that it was a reckless thing for the accused person as Executive Director to do.


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I am therefore satisfied from the totality of the evidence before me that the prosecution has established the case against the accused person and proved beyond reasonable doubt that the accused person approved a credit facility of N14 Million to one Alhaji Gajimi Ibrahim without lawful authority and also in contravention of the lending rules and regulations in force at the time in Savannah Bank. Conse-quently, I find the accused person guilty as charged and convict him accordingly. That is the judgment of this Tribu-nal.

Accused person convicted as charged. Sentence Chairman:–

I have listened to the allocutus of Mr D.A. Awosika, learned Counsel for the convict, who has leaned his argu-ment on the principle of equity and justice. He has urged the Tribunal to invoke the provisions of section 20(5) of the Decree which reads “where by reasons of the confiscation or voluntary surrender of property, under this section there is full or substantial recovery of the amount involved in the offence, the Tribunal may, if it deems it equitable reduce or decline to impose the penalty specified in subsection (1) of this section”.

Now section 20(1) clearly provides that “A person who commits an offence under section 19 of this Decree is liable on conviction, subject to subsection (4) of this section, in the case of an offence.” (a) Under subsection (1)(a), (b) or (c) of that section, to im-

prisonment for a term not exceeding 5 years without an op-tion of a fine. The convict was charged and found guilty of an offence contrary to section 19(1)(a), (b) and (c) which the Decree specifies a mandatory tem of imprisonment without an option of fine:–

Now, section 20(1) makes reference to “subject to subsec-tion 4 of this section” – subsection 4 provides that a prop-erty confiscated or surrendered under section 20 shall be forfeited to:–

“(a) the bank that suffered the loss or


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(b) in the case of a Failed Bank, to the receiver or liquida-tor for the benefit of that bank.

(c) to such other person who in the opinion of the Tribunal deserves to be compensated for loss suffered.”

There is no question of any property confiscated or surren-dered in this case. The customer who benefitted from the transaction was not arraigned before the Tribunal and he paid back the credit facility approved for him by the convict – sec-tion 20(5) of the Decree on which Mr Awosika has hinged his allocutus, specifically states:–

“Where by reason of the confiscation or voluntary surrender of property there is full or substantial recovery of the amount in-volved.”

To my mind the peculiar circumstances of the convict’s case cannot fall under the umbrella of the cases envisaged to in-voke the provisions of section 20(5) of the Decree.

Be that as it may, I have taken into consideration, the pecu-liar circumstances of which the convict found himself in try-ing to source what he termed “cheap funds” for the bank and I am prepared to be lenient on him but within the confines of the provisions of section 20(1) of the Decree. I therefore sentence the convict to three months imprisonment without an option of a fine. Sentence – Three months imprisonment.

[1999] 9 N.B.L.R. (FAILED BANKS TRIBUNAL, ZONE I, ABUJA)


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Federal Republic of Nigeria v Joseph George Pepple and others

FAILED BANKS TRIBUNAL, ZONE I, ABUJA ABUBAKAR J Date of Judgment: 9 FEBRUARY, 1999 Suit No.: FBT/ABJ/CR/002/98

Banking – Offences – Under sections 3(1)(c), 19(1)(c) of the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended) Criminal law and procedure – Confession – Principles ap-plicable Criminal law and procedure – Onus on prosecution – Fail-ure to discharge – Effect Facts The accused persons were charged as follows:–

“First Head of the Charge:– That you, Joseph George Pepple, Male, of 69, Abba Street,

Port Harcourt, and Pius Areprekumo, Male, of Ojoba Town, via Warri, while being Officer in charge, and super-visor respectively of Oporoma Branch of Savannah Bank of Nigeria Plc between November, 1994 and August, 1995 agreed to do the following illegal acts to wit: knowingly and willfully approved and granted unauthorised overdraft facilities and other financial accommodation to the South Ijaw Local Government Council amounting to over N12,000,000 (Twelve Million Naira only) (excluding inter-est and other charges) in contravention of the bank’s proce-dure, rules and regulations as laid down for such facilities and that you thereby committed an offence contrary to sec-tion 23(4) of the Failed Banks (Recovery of Debts) and Fi-nancial Malpractices in Banks Decree No. 18 of 1994 (as amended) and punishable under section 20(1)(a) of the same Decree.

Second Head of the Charge:– That you, Joseph George Pepple, Male, of 69, Abba Street,

Port Harcourt, between November, 1994 and August, 1995 while being Officer-in-charge of Oporoma Branch of Savannah Bank of Nigeria Plc did the following illegal acts to wit: Knowingly and willfully granted unauthorised


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overdraft facilities and other financial accommodation to the South Ijaw Local Government Council amounting to over N12,000,000 (Twelve Million Naira only) (excluding interest and other charges) in contravention of the Bank’s procedure, rules and regulations as laid down for such fa-cilities contrary to section 19(1)(c) of the Failed Banks (Re-covery of Debts) and Financial Malpractices in Banks De-cree No. 18 of 1994 (as amended) and punishable under section 20(1)(a) of the same Decree.

Third Head of the Charge:–

That you, Joseph George Pepple, Pius Areprekumo, Bennett Isaac Ado and Patrick A.O. Akoghene (now at large and abroad) while being Officer-in-charge, Supervisor, Clerk and Typist respectively of Oporoma branch of Savannah Bank of Nigeria Plc between July, 1993 and July 1995 con-spired with one another to commit a felony to wit: with in-tent to defraud falsified Account No. 752 (Suspense Re-sources Account), Account No. 178100071, operated by South Ijaw Local Government Council, Account No. 815 in the name of Ogbunu Toty and made false periodic account-ing reports with respect to the said Accounts to the man-agement of the bank, contrary to and punishable under sec-tion 516 of the Criminal Code Act Cap 77 Laws of the Fed-eration of Nigeria, 1990 and triable under section 3(1)(c) of the Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Decree No. 18 of 1994 (as amended).

Fourth Head of the Charge:–

That you, Joseph George Pepple, Pius Areprekumo, Bennett Isaac Ado and Patrick A.O. Akoghene (now at large and abroad) while being Officer-in-charge, Supervisor, Clerk and Typist respectively of Oporoma Branch of Savannah Bank of Nigeria Plc between July, 1993 and July, 1995 did commit a felony to wit: with intent to defraud falsified Ac-count No. 752 (Suspense Resources Account) Account No. 178100071 operated by the South Ijaw Local Government Council, Account No. 815 in the name of Ogbunu Toty and made false periodic accounting reports with respect to the said Accounts to the management of the bank, and thereby committed an offence punishable under section 435(2) of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 and triable under section 3(1) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).”



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When the charge was first read to the accused persons, the first accused, Joseph George Pepple pleaded guilty to all the counts. As the prosecution did not object to the summary conviction of the first accused, the Tribunal convicted him on the pleas of his guilt as charged.

The second accused also pleaded guilty while the third ac-cused was discharged and acquitted for want of evidence. The fourth accused was tried in absentia, having fled the country, while on Police bail, but before he did so, he made a confessional statement. Held – 1. The onus is on the prosecution to prove its case against

an accused person. In the instant case since the case against the third accused person has not been proved be-yond reasonable doubt and the prosecution has conceded as much, the third accused person ought to be dis-charged and acquitted.

2. Confession is an admission made at any time by a per-son charged with a crime stating or suggesting that he committed the crime.

3. A confessional statement should be tested as to its truth. This can be done by examining it in the light of the other evidence to determine these questions:–

(1) Is there anything outside it to show that it is true? (2) Is it corroborated? (3) Are the facts stated in it true as far as can be tested? (4) Did the accused person have the opportunity of

committing the offence? (5) Is the accused person’s confession possible? (6) Is the confession consistent with other facts, which

have been ascertained? In the instant case, the confessional statement of the

fourth accused have met the laid down criteria. The prosecution has therefore proved its case beyond rea-sonable doubt against the fourth accused.

First, second and fourth accused convicted.



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Nigerian Dawa v The State (1980) 8–11 SC 236 Ikemson v The State (1989) 3 NWLR (Part 110) 455

Nigerian statutes referred to in the judgment Criminal Code Act Cap 77 Laws of the Federation of Nige-ria, 1990, sections 435, 516 Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), sections 3(1)(c), 20(1)(a), 23(4), 27(2)

Judgment ABUBAKAR J: The four accused persons were arraigned be-fore the Tribunal for various offences under Decree No. 18 of 1994 and the Criminal Code Act Cap 77 Laws of the Fed-eration of Nigeria, 1990.

At the commencement of the trial, the first, second and third accused persons were present while the fourth accused Patrick Akogbene was said to be at large and out of the shores of this country. Upon the prosecution’s application, this Tribunal ordered the trial of the fourth accused person in absentia in line with the provisions of section 27(2) of The Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994. The accused persons present were all represented but by different Counsel.

Charges against the accused persons read as follows:– “First Head of the Charge:–

That you, Joseph George Pepple, Male, of 69, Abba street, Port Harcourt, and Pius Areprekumo, Male, of Ojoba Town, via Warri, while being Officer in charge, and supervisor respectively of Oporoma Branch of Savannah Bank of Nigeria Plc between November, 1994 and August, 1995 agreed to do the following illegal acts to wit: Knowingly and willfully approved and granted unauthorised overdraft facilities and other financial accommodation to the South Ijaw Local Government Council amounting to over


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N12,000,000 (Twelve Million Naira only) (excluding inter-est and other charges) in contravention of the bank’s proce-dure, rules and regulations as laid down for such facilities and that you thereby committed an offence contrary to sec-tion 23(4) of the Failed Banks (Recovery of Debts) and Fi-nancial Malpractices in Banks Decree No. 18 of 1994 (as amended) and punishable under section 20(1)(a) of the same Decree.

Second Head of the Charge:– That you, Joseph George Pepple, Male, of 69, Abba Street,

Port Harcourt, between November, 1994 and August, 1995 while being Officer-in-charge of Oporoma Branch of Sa-vannah Bank of Nigeria Plc did the following illegal acts to wit: Knowingly and willfully granted unauthorised over-draft facilities and other financial accommodation to the South Ijaw Local Government Council amounting to over N12,000,000 (Twelve Million Naira only) (excluding inter-est and other charges) in contravention of the Bank’s pro-cedure, rules and regulations as laid down for such facilities contrary to section 19(1)(c) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 as amended and punishable under section 20(1)(a) of the same Decree.

Third Head of the Charge:– That you, Joseph George Pepple, Pius Areprekumo, Ben-

nett Isaac Ado and Patrick A.O. Akoghene (now at large and abroad) while being Officer-in-charge, Supervisor, Clerk and Typist respectively of Oporoma branch of Sa-vannah Bank of Nigeria Plc between July, 1993 and July 1995 conspired with one another to commit a felony to wit: with intent to defraud falsified Account No. 752 (Suspense Resources Account), Account No. 178100071, operated by South Ijaw Local Government Council, Account No. 815 in the name of Ogbunu Toty and made false periodic account-ing reports with respect to the said Accounts to the man-agement of the bank, contrary to and punishable under sec-tion 516 of the Criminal Code Act Cap 77 Laws of the Fed-eration of Nigeria, 1990 and triable under section 3(1)(c) of the Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Decree No. 18 of 1994 as amended.

Fourth Head of the Charge:– That you, Joseph George Pepple, Pius Areprekumo, Bennett

Isaac Ado and Patrick A.O. Akoghene (now at large and abroad) while being Officer-in-charge, Supervisor, Clerk


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and Typist respectively of Oporoma branch of Savannah Bank of Nigeria Plc between July, 1993 and July, 1995 did commit a felony to wit: with intent to defraud falsified Ac-count No. 752 (Suspense Resources Account) Account No. 178100071 operated by the South Ijaw Local Government Council, Account No. 815 in the name of Ogbunu Toty and made false periodic accounting reports with respect to the said Accounts to the management of the bank, and thereby committed an offence punishable under section 435(2) of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 and triable under section 3(1) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 as amended.”

When the charge was first read to the accused persons, the first accused, Joseph George Pepple pleaded guilty to all the counts. As the prosecution did not object to the summary conviction of the first accused, the Tribunal convicted him on the pleas of his guilt as charged. He was accordingly sen-tenced as follows:– (1) On Counts 1 and 2 the first accused was warned and

discharged. (2) On Count 3, to 12 months imprisonment without op-

tion of fine. (3) On Count 4, to 12 months imprisonment without op-

tion of fine. The sentences were ordered to run concurrently and retro-spectively from the time of arrest and detention by the po-lice.

The prosecution called two witnesses and tendered six exhibits in all during the trial. PW1 was one Anthony Orji Ihua a civil servant in the employment of the Rivers State Local Government Service Commission. The witness testi-fied that he was on posting to South Ijaw Local Government as the council’s treasurer between September, 1994 and September, 1995. He went on to enumerate his duties as treasurer which include among others; signing and issuance of cheques, cashing of cheques and payments and lodgments into banks. The witness told the Tribunal that, while he was the treasurer of South Ijaw Local Government, the


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council was maintaining two bank accounts at the Savannah Bank Plc, Oporoma branch and at Pan African Bank Plc, Yanegoa branch. PW1 went on to inform the Tribunal that he knew all the accused persons in their capacities as staff of Savannah Bank Plc, Oporoma branch while he, PW1 was treasurer of South Ijaw Local Government. He said that the Local Government maintained an operational account with the bank and had two approved facilities; an overdraft facil-ity to the tune of N1.5 Million and immediate/direct credit of N1.5 Million. This arrangement, said the witness, was made on the understanding that the statutory monthly allo-cation of the Local Government was to be paid into the ac-count and the bank was to clear any indebtedness before the Council could make withdrawals. That was the arrangement the witness said he met when he took over and it was the same arrangement he left when he was transferred in Sep-tember, 1995.

Testifying further, PW1 told the Tribunal that sometimes in March, 1996 he was invited by the police from Port Har-court over an investigation of a case of fraud involving the accused persons and the account of South Ijaw Local Gov-ernment. He said he was interrogated by the police and was shown some debit notes purported to have been signed by him. At a close look he discovered that the signatures on some of the debit notes were not his but were forged. The witness identified the debit notes which the prosecution ten-dered through him and which the Tribunal admitted and marked exhibit A1 to A7. PW1 was able to identify debit notes of 25 May, 1995 and that of 18 April, 1995 as bearing his name and signature while the debit notes of 13 January, 1995, 25 January, 1995, 30 January, 1995 and 25 July, 1995 bore his name but the signature thereon was not his and therefore forged. PW1 maintained that in the course of inter-rogation the third accused person, Patrick Akogbene con-fessed to having forged his signature and exonerated him from knowledge of any impropriety. PW1 informed the Tri-bunal that as at the time he left South Ijaw Local Govern-ment, the Council was not indebted to the Savannah Bank Oporoma branch. He confirmed that he knew of transit


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expenses being charged by the bank on withdrawals re-quested by the council when such withdrawal has to be made from Port Harcourt branch. PW1 finally informed the Tribunal that he had never given instructions for the coun-cil’s account to be debited and was not aware that it had ever been debited for that purpose.

On cross-examination by the second accused person (pres-ently the first accused) PW1 said that he remembered when they met with the staff of Oporoma branch at the bank’s re-gional office in Port Harcourt on 27 February, 1996. The witness said that they were at the regional office for the pur-pose of reconciliation. It was discovered that all the cheques and transfers issued and instructed by the South Ijaw Local Government from its Pan African Bank, Yanegoa branch to Savannah Bank Oporoma branch were not credited to the council’s account but were all cleared and none was returned unpaid.

On further cross-examination by Counsel to the third ac-cused person (presently the second accused), PW1 main-tained that the third accused person (presently the second accused) was there when the fourth accused person (pres-ently the third accused) confessed before the police that he forged the signature of PW1.

When the prosecution was about calling its second witness the second accused person (presently the first accused) sought indulgence of the Tribunal and informed me that he wanted to change his plea to admit being guilty to the charge. Having asked the accused and having been con-vinced that the accused fully comprehended the implication of change of his plea, the Tribunal proceeded and convicted the second accused person. Consequent upon the conviction, the accused was sentenced as follows:– (1) On Counts 1 and 2 the first accused was warned and

discharged. (2) On Count 3, to 12 months imprisonment without op-

tion of fine. (3) On Count 4, to 12 months imprisonment without op-

tion of fine.


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As in the case of the first accused person earlier convicted upon his plea of guilty sentences were ordered to run con-currently and retrospectively from the time of arrest and de-tention by the police.

The IPO one Ahmad M. Azare, a Superintendent of Police attached to the Failed Banks Inquiry Unit, Force CID annex Lagos testified as PW2. He told the Tribunal in his testi-mony that he knows all the accused persons among whom was one Patrick that was granted police bail after his arrest but who absconded and is still at large. The witness said that he came to know the accused persons when the NDIC through a written complaint dated 4 April, 1997 based on another written complaint from Savannah Bank reported a case of fraud and financial malpractices against the accused persons. PW2 identified the two letters of complaint, which the prosecution tendered, and which were admitted and marked exhibits 2A and 2B respectively.

PW2 went on to narrate the step by step investigation he conducted on the reported case, how the statements of the accused persons were taken. He identified the statement and the additional statement of the third accused person (pres-ently the first accused) to the police. The two statements were tendered and admitted and were marked as exhibits 3 and 4 respectively. The witness said that when they took over the case from the state CID Port Harcourt the accused persons had already been granted police bail and while the first three accused persons were traced, neither the fourth accused person nor his surety was traced. The witness said that when they took over the case they discovered that even the 4th accused person had given his statement to the police. PW2 identified the statement of the fourth accused person which was tendered, admitted and marked exhibit 5.

Continuing his testimony, PW2 informed the Tribunal that the investigation took him to both the bank and the Local Government Council where the reported forged documents were retrieved. He said those principally involved were also invited and interrogated after which the four accused per-sons were arraigned before the tribunal. He also gave the


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number of the account through which the alleged fraud was conducted as Account No. 17810000071.

On cross-examination by Counsel to the third accused per-son (presently the first accused) the witness maintained that the transactions were never authorised by the South Ijaw Local Government Council. The witness agreed that the third accused person (presently the first accused) was the youngest entrant to the branch set up but denied that the bank relied on the suspense account to maintain the facility granted to the Council. The witness described suspense ac-count as one for transactions that were not completed.

In re-examination the witness confirmed that the sum of N9 Million that was involved in the malpractice had been recovered and paid to the bank.

With the testimony of PW2 the prosecution closed its case. When called to enter defence, Counsel to the third accused person (presently the first accused) informed the Tribunal that they were resting the case of the accused person on the prosecution’s case but had an address to submit. Thereafter both Counsel to the third accused person (presently the first accused) and the prosecution Counsel addressed the Tribu-nal.

Presenting his address for the third accused person (pres-ently the first accused), Larry S. submitted that the third ac-cused person, Bennet Isaac Ado was arraigned before the Tribunal on Counts 3 and 4 of the charge for the offences of conspiracy and falsification of records respectively. Counsel argued that to prove a charge of conspiracy the prosecution must establish that the accused has in agreement with an-other or others committed a felony. This he contended the prosecution has not done in the case of the third accused person. He said that from the entire evidence adduced there was no link between the third accused and the other accused persons in the commission of any of the offences alleged in the charge. Counsel therefore urged the Tribunal to hold that the prosecution has not proved conspiracy against the third


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accused praying the Tribunal to discharge and acquit the third accused person on this count of the charge.

On Count 4, learned Counsel to the third accused person submitted that there was no evidence adduced to show that the third accused had willfully or fraudulently falsified any record. Similarly the Counsel maintained, there was no evi-dence to show that the accused made entries that he knew were false. Learned Counsel to the accused contended that facts as contained in a charge remain a mere allegation until substantiated by evidence. This he maintained was not done by the prosecution which entitled the third accused person to a discharge and acquittal. He finally urged the Tribunal to discharge the accused.

Addressing the Tribunal, the prosecution Counsel submit-ted that the first and second accused persons who earlier pleaded guilty to the charges were convicted and sentenced. What remained as contended by Counsel was to link the third and fourth accused persons to the allegation. This the prosecution argued had been linked through exhibit 5 the confessional statement of the fourth accused in which he admitted having, in agreement with the first and second ac-cused persons, conspired and forged the signatures of the treasurer and cashier of South Ijaw Local Government. That alone, maintained the prosecution, is enough to secure con-viction. Beside, PW1 whose signature was forged has testi-fied to the effect that it was his signature that was forged. The prosecution thus urged the Tribunal to hold that it has proved the charge of conspiracy and falsification of account against the fourth accused person. On the third accused, the prosecution had drawn the attention of the Tribunal that the evidence adduced did not properly link the third accused person conceding that the charge against the third accused person has not been proved.

After a careful consideration of the evidence adduced, and with the conviction and sentence of the first and second ac-cused persons, what remained is the charge against the third and 4th accused persons. Learned Counsel to the third ac-cused had rested its case on the prosecution’s case. The


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prosecution on the other hand had conceded that the prose-cution has not proved the case against the third accused. Since the onus is on the prosecution to establish a charge against an accused, the Tribunal has no alternative than to hold that the charge against the third accused has not been proved. This leaves us with the fourth accused person.

The prosecution had submitted that exhibit 5 and the testi-mony of PW1 were adequate proof of the charge of conspir-acy and falsification of account as corroborated by the ad-mission of guilt by the first and second accused persons. What amount to confession was stated by the Supreme Court in the case of Ikemson v The State (1989) 1 NWLR (Part 110) 455:–

“. . . an admission made at any time by a person charged with a crime stating or suggesting that he committed the crime.”

In another case the Supreme Court has laid down the criteria of testing confessional statement when it held in Dawa v The State (1980) 8–11 SC. 236 that; A confessional statement should be tested as to its truth. This can be done by examin-ing it in the light of the other evidence to determine these questions:– (1) Is there anything outside it to show that it is true? (2) Is it corroborated? (3) Are the facts stated in it true as far as can be tested? (4) Did the accused person have the opportunity of committing

the offence? (5) Is the accused person’s confession possible? (6) Is the confession consistent with other facts, which have

been ascertained?

From the evidence adduced, I find the confessional state-ment has met the laid down criteria. I have no hesitation in holding that the prosecution has proved the case against the fourth accused person beyond reasonable doubt.

On the whole, I find that the case against the third accused has not been proved as required by the standard of proof in criminal case. Consequently the third accused person is hereby discharged and acquitted. I find the fourth accused


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person guilty as charged and do accordingly convict the fourth accused person as charged.

Sentence The convict convicted on Counts 3 and 4 of the charge

was tried in absentia in line with the provisions of section 27(2) of The Failed Banks (Recovery of Debts) and Finan-cial Malpractices in Banks Decree No. 18 of 1994. The con-duct of the convict in absconding when he was granted po-lice bail during the pendency of investigation has demon-strated the recalcitrant tendency in him. For this reason, the convict deserves to be punished in a way that would show that the long arm of the law will not spare a person that breached the law of the land only to escape from the shores of the country in order to escape punishment. In view of the foregoing, the convict Patrick Akogbene is sentenced as fol-lows:– (1) On Count 3 he is to serve prison term of five years without

option of fine. (2) On Count 4 he is sentenced to imprisonment for five years

without option of fine. The sentences are to run concurrently.

Right of appeal by any dissatisfied party is allowed to the Special Appeal Tribunal within the period specified under the Decree.

Sentencing and Ruling on the First Accused Person

Tribunal: The convict, Joseph George Pepple was ar-raigned along with three other accused persons before this Tribunal. The charge against the convict and the three others was a four head count of conspiracy, granting unauthorised banking facilities, falsification of account and falsification of financial report contrary to and punishable under the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 and the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 respectively.

When the charge was read and explained to the accused persons, the convict Joseph G. Pepple who was the first ac-cused person pleaded guilty to all the counts. The second


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and third accused persons pleaded not guilty while the fourth accused plea could not be taken as he did not appear before the Tribunal and was said to be at large. Upon the plea of the convict and the no objection admission of the prosecution on summary conviction, the convict Joseph G. Pepple was ac-cordingly convicted as charged.

When called upon by the Tribunal for any plea after con-viction, the convict pleaded for leniency predicating his plea on a number of grounds. The grounds of the convict’s plea could be summed up thus:– – That all he did in the cause of committing the of-

fences for which he was convicted was done in good faith and in the interest of the bank.

– That though unauthorised, the loan for which he was charged of granting had been fully repaid to the bank.

– That since his arrest in 1995 he had been on suspen-sion without pay and that he had been in detention with the police for 2 years.

The convict finally urged the court to take into consideration the forgone and fact that the offence for which he was con-victed was the first he ever committed.

The learned prosecution Counsel informed the tribunal of non-availability of record of previous conviction giving rise to the presumption that the convict is a first offender. The prosecution Counsel further submitted that the tribunal may consider the remorse shown by the convict and the fact that the money had been fully recovered and paid to the bank in punishing the convict.

I have carefully considered the plea of the convict and the circumstances surrounding the commission of the offences for which he was convicted. I have taken into consideration the remorse shown by the convict in his admission of guilt. Equally considered is the fact that the convict has no record of previous conviction. However, these notwithstanding the offences for which the convict was charged and convicted are serious in nature and rampant in happening. This therefore


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calls for punishment that will serve as deterrent to others. Though the convict pleaded good faith and good intention in the commission of the offence, that does not in anyway exon-erate him from criminal liability. An illegality remain illegal-ity no matter the good faith of the perpetrator.

Be that as it may, in view of the remorse shown by the convict and in appreciation of his being a first offender and particularly that the amount involved in the commission of the offences had been fully recovered I will exercise my dis-cretion under subsection 5 of section 20 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 in imposing sentence – Accordingly, the convict is hereby sentenced on each of the counts in the charge as follows:–

The convict is warned and discharged in Counts 1 and 2. On Count 3 he is sentenced to 12 months imprisonment and on Count 4, he is to serve 12 months imprisonment. The sentences are to run concurrently and retrospectively from the time of the convict’s arrest by the police. Since the cu-mulative period of the convict’s detention was over 1 year as confirmed by the prosecution, it is to be taken that he has already served the imprisonment period.

Right of appeal is allowed within the specified period un-der the Decree by any dissatisfied party.

Sentencing and Ruling on the Second Accused Person

Tribunal: Having listened to the plea in mitigation by the convict and the submission of the prosecution Counsel thereto, I am disposed at being lenient with the convict that it will serve as a corrective measure to him in the future.

Though the amount illegally granted by the accused with his co-hort had been fully recovered and paid, the convict had committed an illegal act and it is the culmination of such acts that has really brought to collapse the entire bank-ing industry in this country and of course our image as a na-tion to the outside world. These acts such as committed by the convict could not go unpunished.


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In view of his plea and in appreciation of his being a first offender, the convict is hereby sentenced on each of the counts as follows:–

On Count 1 he is warned and discharged. On Counts 3 and 4 he is sentenced to a term of 12 months imprisonment without option of fine. The sentences are to run concurrently and retrospectively from the time of his detention by the po-lice. Thus by implication the convict has already served the term of imprisonment.

The convict, and that is, anybody not satisfied with the conviction and sentence may appeal within the stipulated period.

[1999] 9 N.B.L.R. (SUPREME COURT OF NIGERIA)


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Federal Mortgage Bank of Nigeria v Nigeria Deposit Insurance Corporation

SUPREME COURT OF NIGERIA BELGORE, WALI, OGUNDARE, OGWUEGBU, MOHAMMED, ONU, IGUH JJSC Date of Judgment: 12 FEBRUARY, 1999 Suit No.: SC/66/1997

Banking – Bank – Meaning of – Federal Mortgage Bank – Whether falls within the meaning of “Bank” as envisaged by Banks and Other Financial Institutions Decree (“BOFID”) No. 25 of 1991 Banking – Disputes between two Banks – Action to recover money placed on short term deposit by one bank with an-other – Whether the State High Court or Federal High Court can entertain in view of section 230(1)(d) of the Con-stitution of Federal Republic of Nigeria, 1979 (as amended) Facts The plaintiff (now appellant) placed the sum of N5,000,000 (Five Million Naira) on a short term deposit with the United Commercial Bank (hereinafter is referred to as “the defen-dant”) on 8 December, 1992 at an interest of 40% per an-num. There were roll-overs. The deposit eventually matured on 6 March, 1994. The defendant defaulted in paying back the said deposit and interest despite numerous demands made by the plaintiff. By a writ of summons filed on 31 May, 1994, the plaintiff claimed from the defendant. “(i) The sum of Five Million Naira (N5,000,000) being the

principal amount paid on the short-term deposit/placement made on the effective date of 8 December, 1992 by the plaintiff with and in favour of the defendant and which sum finally matured on 6 March, 1994 after four roll-overs which the defendant has refused and failed to repay despite demands by the plaintiff.

(ii) Interest on the above-mentioned sum at the agreed rate of 40% per annum from 6 December, 1992 to 6 March, 1994 being the effective and maturity dates respectively on the fourth roll-over.

(iii) Interest on the said sum at the agreed rate of 40% per an-num from 6 March, 1994 (being the agreed maturity date of


Federal Mortgage Bank of Nigeria v. Nigeria Deposit Insurance 181

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the fourth roll-over) until judgment is given and thereafter at the rate of 15% per annum until full repayment.”

On failure of the defendant to enter appearance and file its pleadings, judgment was entered for the plaintiff. The defen-dant did not appeal against the judgment. Rather, on the plaintiff taking steps to levy execution on the movable prop-erty of the defendant in satisfaction of the judgment debt, the defendant brought a Motion for Stay of Execution. Before the motion could be heard Nigeria Deposit Insurance Corporation was appointed liquidator of the defendant Bank. On being appointed, Nigeria Deposit Insurance Corporation took over the properties. Further, the plaintiff brought a motion compel-ling Nigeria Deposit Insurance Corporation to produce all the attached properties of the bank.

Responding to the Motion by the plaintiff, Nigeria Deposit Insurance Corporation averred that on being appointed liq-uidator of the Bank, that the plaintiff can only sue by leave of the Court, and that the State High Court has no jurisdic-tion to entertain the matter by virtue of section 230(1)(d) of the Constitution of Federal Republic of Nigeria, 1979 (as amended) by Decree No. 107 of 1993. The High Court as-sumed jurisdiction and dismissed the application for Stay of Execution. The Nigeria Deposit Insurance Corporation ap-pealed against this decision to the Court of Appeal.

The Court of Appeal in its unanimous decision held that disputes between two Banks was not restricted to the exclu-sive jurisdiction of the Federal High Court but depending on the nature of the transaction. Dissatisfied, both parties ap-pealed to the Supreme Court.

Held – 1. The word “Bank” is not defined in the Constitution nor

in the Interpretation Act. In its ordinary grammatical meaning, the word “Bank” means an organisation or place that provides financial service. Having regard to the provisions of the law setting up the appellant, par-ticularly section 5(1)(a) and section 6(1)(a) and (b) of the Federal Mortgage Bank of Nigeria Decree No. 82 of 1993, the appellant falls within this ordinary meaning.



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Besides, by section 29 Failed Banks (Recovery of Debt) and Financial Malpractices in Banks Decree No. 18 of 1994, “Bank” has the meaning assigned to it under the Banks and Other Financial Institutions Decree No. 25 of 1991 and includes:–

a. “A Financial Institution as defined under the Decree or under the Nigeria Deposit Insurance Corporation Decree 1988, and

b. A development Bank and any other Bank estab-lished by law”.

Therefore the Federal Mortgage Bank is a Bank and comes within section 230(1)(d) of the Constitution of Federal Republic of Nigeria, 1979 (as amended).

2. The proviso to section 230(1)(d) of the Constitution of Federal Republic of Nigeria, 1979 (as amended) would not apply where in a customer/banker relationship the Customer is a Bank. To say that where there is a dispute between two Banks, the forum for the resolution of the dispute is the Federal High Court is to read into section 230(1)(d) what is not there. A lot depends on the nature of the transaction between the two Banks.

In the instant case, the appellant like any other customer, placed a short-term deposit with the defendant on agreed interest. After some roll-overs, the appellant sought to retrieve its deposit and interest but the defendant de-faulted. In the absence of any evidence to the contrary about the custom in the industry, it is a simple customer/ banker relationship which the proviso in section 230(1)(d) of the 1979 Constitution exempts from the ex-clusive jurisdiction of the Federal High Court.

Appeal and cross-appeal dismissed.


Nigerian Adio v Attorney-General Oyo State (1990) 7 NWLR (Part 163) 448 Atoyebi v Gov Oyo State (1994) 5 NWLR (Part 344) 290



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Attorney-General of Oyo State v Fairlakes Hotel Ltd (1988) 5 NWLR (Part 92) 1 Bi Zee Bee Hotels Ltd v Allied Bank (Nigeria) Ltd (1996) 8 NWLR (Part 465) 176 Commerce Assurance Ltd v Alli (1992) 3 NWLR (Part 232) 710 Ede v Omeke (1992) 5 NWLR (Part 242) 428 Globe Fishing Ind. Ltd v Coker (1990) 7 NWLR (Part 162) 265 Metal Construction (W.A.) Ltd v Migliore: In Re Ogundare (1990) 1 NWLR (Part 126) 299

Nigerian statutes referred to in the judgment Banking Act Cap 28 Laws of the Federation of Nigeria, 1990, section 43(1)(a) Banks and Other Financial Institutions Decree No. 25 of 1991, sections 2, 51 and 61 Companies and Allied Matters Act Cap 59 Laws of the Fed-eration of Nigeria, 1990, sections 417, 500(1) and (2), 501(1)–(3) and 650 Constitution (Suspension and Modification) Decree No. 107 of 1993, section 1(3) Constitution of the Federal Republic of Nigeria, 1979 (as amended), section 230(1)(d) Court of Appeal Act Cap 75 Laws of the Federation of Nige-ria, 1990, section 16 Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), section 29 Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks (Amendment) Decree No. 18 of 1995, section 7 Federal Mortgage Bank of Nigeria Decree No. 82 of 1993, sections 5(1)(a), 6(1)(a) and (b)



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Nigerian rules of court referred to in the judgment Court of Appeal Rules Cap 62 Laws of the Federation of Nigeria, 1990, Order 3 Rules 2(1), (2) and (3) and 22

Counsel For the appellant: FO Fagbohungbe, Esq. (with him A Ajayi, Esq.) For the respondent: Prof. GA Olawoyin, S.A.N. (with him Dr A Olawoyin and Adewuyi, Esq.)

Judgment OGUNDARE JSC: (Delivering the lead judgment) The plain-tiff (now appellant) placed the sum of N5,000,000 (Five Million Naira) on a short term deposit with the United Commercial Bank (hereinafter referred to as the defendant) on 8 December, 1992 at an interest of 40% per annum. There were roll overs. The deposit eventually matured on 6 March, 1994. The defendant defaulted in paying back the said deposit and interests despite numerous demands made by the plaintiff. By a writ of summons filed on 31 May, 1994, the plaintiff claimed from the defendant. “(i) The sum of Five Million Naira (N5,000,000) being the

principal amount paid on the short-term deposit/placement made on the effective date of 8 December, 1992 by the plaintiff with and in favour of the defendant and which sum finally matured on 6 March, 1994 after four roll-overs which the defendant has refused and failed to repay despite demands by the plaintiff.

(ii) Interest on the above mentioned sum at the agreed rate of 40% per annum from 6 December, 1992 to 6 March, 1994 being the effective and maturity dates respectively on the fourth roll-over.

(iii) Interest on the said sum at the agreed rate of 40% per an-num from 6 March, 1994 (being the agreed maturity date of the fourth roll-over) until judgment is given and thereafter at the rate of 15% per annum until full repayment.”

The plaintiff filed simultaneously a statement of claim by paragraph 14 of which it finally claimed as hereunder:– “(i) The sum of Five Million Naira (N5,000,000) being the

principal amount of the short-term deposit/placement made


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on the effective date of 8 December, 1992 by the plaintiff with and in favour of the defendant and which said sum fi-nally matured 6 March, 1994 after four (4) roll-overs which the defendant has refused and failed to repay despite nu-merous demands by the plaintiff.

(ii) Interest on the above mentioned sum at the agreed rate of 40% per annum from 6 March, 1994 (being the agreed ma-turity date of the fourth roll-over) until judgment is given and thereafter at the rate of 15% per annum until full re-payment.

On failure of the defendant to enter appearance and file its pleadings, judgment at the instance of plaintiff was on 12 July, 1994 entered against it. The defendant did not appeal against this judgment. Rather on the plaintiff taking steps to levy execution on the movable property of the defendant in satisfaction of the judgment debt, the latter on 6 September, 1994, by way of motion applied for:– “1. An order of stay of execution restraining the plaintiff from

further levying execution and sale of the goods and chattels of the defendant pursuant to the judgment of this Honour-able Court dated 12 July, 1994;

2. An order of this Honourable Court allowing the defendant to liquidate the entire judgment debt instalmentally.”

In the supporting affidavit, the defendant’s company secre-tary/legal adviser, Mrs Nkoyo Egbedi, deposed, inter alia:– “2. that I have the authority of my employers to depose to this

affidavit; 3. that judgment was given in this suit by this Honourable

Court on the 12 July, 1994 in favour of the plain-tiff/respondent for the sum of N6,252,245.13 (Six Million, Two Hundred and Fifty-two Thousand, Two Hundred and Forty-five Naira, Thirteen Kobo only);

4. that on 5 September, 1994 the representative of the plaintiff and the deputy sheriff came to levy execution pursuant to the said judgment by attaching the goods and chattels of the defendant at Victoria Island;

5. that on the said 5 September, 1994, the defendant paid the Counsel to the plaintiff N2,500,000 (Two Million, Five Hundred Thousand Naira only) vide a Commercial Trust Bank Limited Bank draft No. 15592;

6. that now shown to me and attached as exhibit A is a copy of the bank draft referred to in paragraph 5 (supra);


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7. that the defendant is desirous of liquidating the debt by paying instalmentally upon terms and conditions to be agreed upon by both parties;

8. that in proof of the fact that the defendant wishes to liqui-date the debt, I repeat paragraph 5 (supra);

9. that the defendant will suffer substantial injustice if a stay is not granted, as it will be unable to fulfil its obligations to its numerous customers if its goods and chattels are sold by the plaintiff;

10. that it will be equitable and in the interest of justice if the defendant is allowed to liquidate the judgment debt instal-mentally;

11. that the current political and economic crisis in the nation makes it impossible for the defendant to liquidate the judg-ment debt immediately;

12. that the defendant is acting in good faith.” This motion was yet to be heard when on 19 September, 1994 the plaintiff, too, brought a motion praying for:– “(i) An order of this Honourable Court compelling the respondent

(‘NDIC’) to produce forthwith and deposit in the Lagos High Court premises all the defendant’s attached properties listed in the inventory attached herewith and marked exhibit A which said properties were attached on 5 September, 1994 by a bail-iff of the Lagos High Court in the name of the plaintiff in exe-cution of the judgment of this Honourable Court given on 14 July, 1994 and which said properties have now been removed and detained by the respondent (‘NDIC’) and which still re-main in the respondent’s possession and custody.

(ii) An order of this Honourable Court directing the deputy sheriff of the Lagos High Court to take custody and control of the said properties and to immediately effect the sale of same in accordance with section 22(2) of the Sheriffs and Civil Process Law of Lagos State.”

The respondent to the motion was the Nigerian Deposit In-surance Corporation (“NDIC”, for short) who had been ap-pointed on 9 September, 1994 by the Governor of the Cen-tral Bank of Nigeria (“CBN”) as liquidator to the defendant following the revocation by the CBN of the defendant’s li-cence. Francis Adewale, a legal practitioner, swore to an af-fidavit in support of the motion. In it he deposed:– “3. That on 31 May, 1994, the plaintiff instituted this action

against the defendant (United Commercial Bank) claiming


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the sum of Five Million Naira (N5,000,000) with substan-tial accrued interest being a short-term deposit or invest-ment made on 8 December, 1992 by the plaintiff in favour of the defendant.

4. That on 12 July, 1994 judgment was given by this Honour-able Court in favour of the plaintiff for the sum of Six Mil-lion, Two Hundred and Fifty-two Thousand, Two Hundred and Forty-five Naira, Thirteen Kobo (N6,252,245,13).

5. That on 5 September, 1994, the plaintiff acting in concert with a bailiff of the Lagos High Court levied execution of the said judgment at the defendant’s head office at Adeola Odeku Street, Victoria Island, Lagos.

6. That due to the inability of the defendant to readily pay the amount of the judgment debt, the said bailiff was con-strained to attach all the goods and chattel of the defendant in the name of the plaintiff.

7. That the said bailiff took an inventory of the defendant’s attached goods and chattel and the said inventory was duly signed by the defendant’s Managing Director, the said bail-iff and a police officer as being a correct list of the defen-dant’s goods and chattel duly and completely attached down within the defendant’s premises in the name of the plaintiff. A copy of the said inventory is attached herewith and marked exhibit A.

8. That the said goods and chattel were attached down within the defendant’s premises because the defendant had issued a post-dated Chattered Bank cheque to mature on 5 Sep-tember, 1994 for the sum of Two Million Naira (N2,000,000.) in part satisfaction of the judgment debt. A copy of the said cheque is attached herewith and marked exhibit B.

9. That at maturity the said cheque was returned unpaid through the plaintiff’s letter dated 14 September, 1994 a copy of which is attached herewith and marked exhibit C.

10. That on Friday, 9 September, 1994 (4 days after the plain-tiff had attached the said goods and chattel) the Central Bank of Nigeria revoked the defendant’s banking licence and appointed the respondent (NDIC) to liquidate the de-fendant.

11. That on Monday, 12 September, 1994, the plaintiff’s Coun-sel, Messrs F.O. Fagbohungbe and Co promptly wrote to the respondent notifying the respondent of the earlier at-tachment of the defendant’s goods and chattel and advising


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the respondent to restrain from tampering or intermeddling with the attached properties as they no longer constituted part of the defendant’s assets. A copy of the plaintiff’s Counsel’s letter is attached herewith and marked exhibits D and D1.

12. That I am verily informed by the plaintiff and I do believe same that in spite of the aforesaid notice of the said attach-ment given to the respondent (NDIC), the respondent still proceeded to remove the defendant’s attached goods and chattel and now detains same, which remains presently in the possession and control of the respondent.

13. That I am informed by the plaintiff and I verily believe same that in brazen defiance and contempt of the judgment of this Court, the respondent has evinced a clear intention to depose (sic) of the said attached goods and chattel im-mediately unless otherwise ordered and/or restrained.

14. That if the respondent is allowed to dispose of the attached goods and chattel, it will render nugatory and set aside both the judgment of this Honourable Court and execution of same levied on 5 September, 1994.

15. That the five (5) days of grace which the defendant has to redeem its attached goods and chattel by satisfying the judgment debt has since elapsed on 12 September, 1994.

16. That the defendant’s attached goods and chattel are now ripe for sale by the deputy sheriff of this Honourable Court.”

The plaintiff’s motion was argued on 23 September, 1994 and ruling was reserved to 14 October, 1994. On 5 October, 1994, however, the NDIC through its Counsel, brought a motion on notice praying for:– “1. An order for the arrest of the ruling on the motion on notice

of the plaintiff/ respondent dated 15 September, 1994 and fixed for delivery on 14 October, 1994.

2. An order for stay of proceedings in respect of this matter pending the outcome of the appeal.”

upon the ground that the trial court had no jurisdiction “to adjudicate on this matter and or to deliver a ruling on it.” In the affidavit in support of the motion, Joseph Enukit, a Counsel in the chambers of Olawoyin and Olawoyin, solici-tors to the NDIC, deposed:– “2. By a motion on notice dated 15 September, 1994. the plain-

tiff/respondent sought amongst other things for an order


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compelling the present applicant to produce and deposit in the premises of the Lagos High Court properties which were attached by a bailiff in favour of the plain-tiff/respondent in execution of the judgment of this Hon-ourable Court dated 14 July, 1994.

3. On 23 September, 1994, the motion on notice referred to in paragraph 2 above was argued by both the plaintiff and the present applicant and ruling on same was reserved for 14 October, 1994.

4. I am informed by Professor G.A. Olawoyin of Counsel and I verily believed him as follows:–

(a) That the action between the plaintiff and the defendant relates to a short term investment made by the plaintiff in the defendant’s bank.

(b) That the subject matter of the action concerns two banks and/or arose from banking transactions.

5. I am further informed by Professor G.A. Olawoyin of Counsel and I verily believed him that the plaintiff’s action is governed by the provisions of the Constitution (Suspen-sion and Modification) Decree No. 107 of 1993 which con-fer exclusive jurisdiction in banking transactions on the Federal High Court.

6. I am also informed by Professor G.A. Olawoyin of Counsel and whose information I sincerely believed that this hon-ourable court does not have jurisdiction to adjudicate on this matter and/or entertain any arguments relating to the present action.

7. Further to paragraph 6 hereof, I am informed by Professor G.A. Olawoyin of Counsel and I verily believed him that this honourable court does not have jurisdiction to entertain the plaintiff’s application dated 15 September, 1994 and to deliver a ruling on same.

8. I am also informed by Professor G.A. Olawoyin of Counsel and I verily believed him as follows:–

(i) That by reason of lack of jurisdiction of the honour-able court it is necessary for the applicant to arrest the delivery of the ruling slated for 14 October, 1994.

(ii) That the issue of jurisdiction of the court can be raised by a party at any stage of the proceedings.

(iii) The stay of proceedings in this matter is necessary pending the determination of the appeal. Attached herewith and marked exhibits NDIC 1 and 2 are


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photo-copies of the notice of appeal filed by the ap-plicant and the treasury receipts respectively.”

This application was predicated on an appeal filed on 4 Oc-tober, 1994 against the judgment of 12 July, 1994. The no-tice of appeal contained two grounds of appeal to wit:– “(i) The learned trial Judge lacks jurisdiction to entertain the

case by virtue of section 230(1) of the Constitution (Sus-pension and Modification) Decree No. 107 of 1993.

Particulars (a) The action is one between one bank and another. (b) Section 230(1)(d) of Decree No. 107 of 1993 vests

exclusive jurisdiction in the Federal High Court to en-tertain all such actions between one bank and another.

(c) The Lagos State High Court has no jurisdiction to en-tertain the claims of the plaintiff bank against the de-fendant bank.

(ii) The decision of the learned trial Judge entering a final judgment for the respondent without jurisdiction amount to a nullity and has no effect whatsoever.

Particulars (a) The claims of the plaintiff/respondent against the de-

fendant/appellant comes within the provision of sec-tion 230(1)(d) of Decree No. 107 of 1993.

(b) The Lagos State High Court presided over by the Hon. Justice Adeniji lacks the jurisdiction and competence to entertain the action and to make any pronounce-ments thereon;

(c) The judgment of the learned trial Judge in the matter made in favour of respondent herein is a nullity.”

This appeal was not pursued with by the NDIC in that the Corporation took no steps to prosecute it and Counsel at the hearing of the present appeal informed us that the said ap-peal had been abandoned by them.

The NDIC’s motion was argued on 14 October, 1994 and refused. Thereupon, the learned trial Judge delivered his rul-ing on the plaintiff’s motion of 15 September, 1994 and granted the prayers sought therein. Being dissatisfied with the grant of plaintiff’s prayers, the NDIC appealed to the


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Court of Appeal upon four grounds which, without their par-ticulars, read:– “(1) The learned trial Judge erred in law when he failed to con-

sider the relevance of section 38(3) of Banks and Other Fi-nancial Institutions Decree (‘BOFID’), 1991 and sections 500(1) and (2) and 501 of CAMA, 1990 by holding that the appellant as liquidator of the defendant does not come within the provisions of those sections.

(2) The learned trial Judge erred in law by assuming jurisdic-tion to try and determine the matter and make pronounce-ments thereon by virtue of the provisions of section 230(1)(d) of the Constitution (Suspension and Modifica-tion) Decree No. 107 of 1993.

(3) The learned trial Judge erred in law to have proceeded to de-liver a ruling on the respondent’s motion on notice dated 15 September, 1994 without jurisdiction in spite of the appel-lant’s application to arrest the said ruling and to stay proceed-ings in the matter pending the outcome of the appeal.

(4) The learned trial Judge erred in law in failing to consider first the judgment debtor’s application for stay of execution dated 6 September, 1994 before hearing arguments on the respondent’s motion on notice dated 15 September, 1994.”

Pursuant to the rules of the Court of Appeal, the NDIC and the plaintiff filed and exchanged their respective briefs of arguments. On the appeal coming up for hearing before the Court of Appeal on 18 April, 1996 (after previous adjourn-ments), the court, suo motu, observed:–

“Court: The issue of the so-called registry judgment fundamental we need to fully addressed (sic) on the point. Prof. Olawoyin: I shall file the necessary papers including leave to argue the issue in due course. I agree it is a fundamental matter. Mr Ajayi: I have no objection. Hearing of the appeal was adjourned to 14 October, 1996.”

On 9 May, 1996 Professor Olawoyin, on behalf of the NDIC filed a motion praying for the following orders:– “1. An order of this Court for leave to amend the notice of ap-

peal herein by the addition of two (2) new grounds of ap-peal as shown in the proposed additional grounds of appeal attached to the affidavit in support hereof as exhibit A.


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2. An order of this Court deeming the proposed amended no-tice of appeal attached hereto as exhibit B as properly filed and served.

3. An order of this Court for leave to file a supplementary ap-pellant’s brief of argument in respect of the additional grounds of appeal.”

The application was granted. The court below ordered as hereunder:–

“Court: Order as prayed. Leave is granted to the applicant to amend the notice of appeal by the filing of additional two grounds of appeal. The notice of appeal as amended should be filed and served within 7 days from today. The appellant should file the supplementary brief within 14 days from today and the respondent supplementary brief be filed 21 days thereafter.”

The amended notice of appeal filed by the NDIC pursuant to the above order contained six grounds of appeal which, without their particulars, read:– “(1) The learned trial Judge erred in law when he failed to con-

sider the relevance of section 38(3) of Banks and Other Fi-nancial Institutions Decree (‘BOFID’) 1991 and sections 500(1) and (2) and 501 of CAMA, 1990 by holding that the appellant as liquidator of the defendant does not come within the provisions of those sections.

(2) The learned trial Judge erred in law by assuming jurisdic-tion to try and determine the matter and make pronounce-ments thereon by virtue of the provisions of section 230(1)(d) of the Constitution (Suspension and Modifica-tion) Decree No. 107 of 1993.

(3) The learned trial Judge erred in law to have proceeded to deliver a ruling on the respondent’s motion on notice dated 15 September, 1994 without jurisdiction in spite of the ap-pellant’s application to arrest the said ruling and to stay proceedings in the matter pending the outcome of the ap-peal.

(4) The learned trial Judge erred in law in failing to consider first the judgment debtor’s application for stay of execution dated 6 September, 1994 before hearing arguments on the respondent’s motion on notice dated 15 September, 1994.

(5) The learned trial Judge erred in law when he gave his ap-proval for the registry judgment entered in favour of the re-spondent in chambers in the absence of the defendant bank and thereby denied it the opportunity to be heard contrary to


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the provisions of section 33(3) of the 1979 Constitution as amended.

(6) The learned trial Judge erred in law by approving the pur-ported registry judgment when same was not delivered in ac-cordance with the mandatory provisions of section 258(1) of the 1979 Constitution, as amended and Order 36 Rule 1 of the High Court of Lagos State (Civil Procedure) Rules, 1979.”

Supplementary briefs were filed by the parties and oral ar-guments proffered by their learned Counsel. The court be-low, sitting as a full court, allowed the appeal of the NDIC. In the lead judgment of Uwaifo, JCA (as he then was) with which the other Justices agreed, the court held:– 1. “I think placing deposits with a bank to get attractive inter-

est rates will fall within a lawful transaction. I hold the view that when it does that, it becomes an individual customer of that bank for that purpose.”

2. “I hold that the Federal Mortgage Bank Limited (the re-spondent) is a bank envisaged in section 230(1)(d) of De-cree No. 107 of 1993.”

3. “But I find it difficult with due respect to accept the sub-mission of Professor Olawoyin that the action arising from the transaction which took place between the appellant, and the respondent is an action between one bank and another falling within the purview of section 230(1)(d) through what he called inter bank placement, which, however, he did not define as to see whether it excludes every aspect of individual customer and bank relationship.”

4. “What the provision (in section 230(1)(d) of the Constitu-tion as amended) renders necessary and results in upon the circumstances contemplated is, as I apprehend it, four fold in its ramifications: (i) that the State High Court shall have jurisdiction in the circumstances indicated in the proviso; (ii) that the Federal High Court shall not have exclusive ju-risdiction. as given to it under the main section, when it comes to matters falling within circumstances of the pro-viso: (iii) that the fact that the Federal High Court’s exclu-sive jurisdiction in paragraph 230(1)(d) ‘shall not apply’ (to use the language of the proviso thereto) in those circum-stances does not entirely remove jurisdiction therein from the Federal High Court: and (iv) that both the Federal High Court and the State High Court therefore have and can ex-ercise concurrent jurisdiction in such circumstances.” (Box brackets supplied by me.)


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5. “I think the Lagos State High Court would have jurisdiction to hear the dispute as to liability under the proviso to sec-tion 230(1)(d) of Decree No. 107 of 1993.”

6. “First, the section 38(3) of the BOFID, the NDIC may be appointed by the Governor of the Central Bank of Nigeria (‘CBN’) as the official receiver or as a provisional liquida-tor of a company. When so appointed, the NDIC shall have the powers conferred by or under the CAMA and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for that purpose. Under section 425(1)(a) of the Companies and Allied Matters Act, 1990 (‘the CAMA’) the liquidator shall have the powers to bring or defend any action or other legal proceeding in the name and on behalf of the company to a large extent. For all practical purposes, a provisional liquidator exercises the powers of a liquidator unless limited or restricted by the court: see section 422(2) of the CAMA.”

7. “In the present case, the order of the court to attach the ap-pellant’s property was made on 5 September, 1994 while the NDIC was appointed provisional liquidator on 8 Sep-tember. By law, as argued by Professor Olawoyin, sale could not be effected by the deputy sheriff until at least five days after attachment (see section 22(1) of the Sheriffs and Civil Process Law (Cap 127) Laws of Lagos State.) I think Professor Olawoyin is right to say that the Deputy Sheriff who had notice of the appointment of provisional liquidator was bound to deliver the goods attached to the appellant and that the appellant was entitled to take custody thereof.”

8. “The true position is that once a provisional liquidator is appointed for a company, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court given on such terms as the court may impose (see section 417 of the CAMA). The court meant there is the Federal High Court. If, therefore, such action was intended to be proceeded with or commenced against the company in a State High Court, it cannot be done with-out obtaining the leave of the Federal High Court (see Abekhe v Nigeria Deposit Insurance Corporation (1995) 7 NWLR (Part 406) 228 at 242–243). No such leave was ob-tained here. It follows that the proceeding in respect of that motion was conducted without jurisdiction and the order made was accordingly a nullity.”

9. “How very appropriate to adapt the reasoning in the above quoted observation to the circumstances of this case. The


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1979 Constitution has provided for which functionaries can constitute a court in Nigeria and how decisions are to be reached. No rules or laws which tend to create a contradic-tion to or short circuit those provisions can be valid. Having regard to the constitutional provisions under the 1979 Con-stitution which I have already considered here but to which the attention of this Court was not drawn in Narva Com-pany of Nigeria Ltd v J.A. Monster BV (supra), I hold that that case was decided per in curiam and is therefore, not binding on this Court. I further hold that Order 36 Rules 8 and 9 and all other rules which permit the so called registry judgment or the like are inconsistent with the 1979 Consti-tution and are accordingly declared void to the extent of the inconsistency.”

10. “Finally, I hold that the ‘judgment’ of 12 July, 1994, got as registry judgment by which the respondent was awarded the sum of N5,000,000 with interest, is unconstitutional, invalid and unenforceable.”

The Court below set aside both the judgment of 12 July, 1994 and the ruling of 14 October, 1994 on the ground that the latter was given without jurisdiction “or in any case, which has no inundation any longer to rest on”.

Being aggrieved with the judgment of the Court of Appeal the plaintiff has now appealed to this Court upon eleven grounds of appeal. The NDIC also cross-appealed against that part of the judgment of the court below which held that the State High Court had jurisdiction to entertain the suit be-fore it pursuant to the provision of the proviso to section 230(1)(d) of Decree No. 107 of 1993.

The parties filed and exchanged their respective briefs of arguments and, at the hearing of the appeal, their learned Counsel proffered oral arguments in elucidation of argu-ments in their briefs. In the plaintiff’s brief. the following six questions are set down as calling for determination:– “1. Was the Court of Appeal vested with jurisdiction and did it

act properly when it heard and determined issues) regarding the validity of the judgment of the Lagos High Court dated July 12, 1994 when, in fact and in law, there was no valid appeal against the said judgment pending before the Court of Appeal for hearing and determination?


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2. Is the judgment of the Lagos High Court dated July 12, 1997 given in favour of the appellant constitutional, valid and enforceable?

3. Is the appellant a ‘bank’ within the contemplation of sec-tion 230(1)(d) of the Constitution (Suspension and Modifi-cation) Decree No. 107 of 1993?

4. Does Lagos State High Court share a concurrent jurisdic-tion with the Federal High Court in respect of banker cus-tomer disputes/transactions as provided in the proviso to section 230(1)(d) of Decree No. 107 of 1993?

5. Was the Lagos High Court deprived of jurisdiction to enter-tain the appellant’s motion for the production of the at-tached goods of United Commercial Bank limited as a re-sult of the failure of the appellant to seek and obtain leave of the Federal High Court before filing the said motion?

6. Who, as between the appellant and the respondent, is entitled to the goods and chattels of the defendant (United Commer-cial Bank Limited) which had already been attached by a bailiff of the Lagos High Court in favour of the appellant be-fore the appointment of the respondent as provisional liqui-dator of defendant, particularly in the light of the ruling of the Lagos High Court dated October 14, 1994?”

The NDIC, in its brief, sets down four questions as arising for determination in the main appeal and cross appeal. These are:– “1. Whether the issue of the constitutionality of the registry

judgment of 12 July, 1994 was properly before the Court of Appeal when it heard arguments in respect of the matter on 21 January, 1997?

2. Whether the registry judgment of the Lagos High Court dated 12 July, 1994, was constitutional, valid and enforce-able.

3. Whether the appellant is a bank and, if so, can a State High Court exercise jurisdiction in respect of a matter between it and another bank by virtue of section 230(1)(d) of the Con-stitution (Suspension and Modification) Decree No. 107 of 1993.

4. Whether by virtue of section 38(3)of the Banks and Other Financial Institutions Decree No. 25 of 1991 and sections 500 and 501(1) of the Companies and Allied Matters Act, 1990, the respondent has the statutory right to take and re-tain custody of the goods in question in the circumstances of this case.”


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The two sets of questions essentially raise the same issues. I shall, however, adopt the questions as raised in the plaintiffs brief. Question 1:–

Mr Fagbohungbe, learned Counsel for the plaintiff, both in his brief and in oral argument, submits that grounds 5 and 6 contained in the amended notice of appeal before the court below were incompetent as they did not relate to the High Court ruling of 14 October, 1994 which was the decision on appeal to the court below. Those grounds, according to Counsel, related only to the main judgment of 12 July, 1994 which was not on appeal before the court below as the ap-peal against that decision had been abandoned. He urges us to declare incompetent the pronouncements of the court be-low relating to those grounds. Learned Counsel refers to Atoyebi v Governor of Oyo State (1994) 5 NWLR (Part 344) 290 at 305 B–C; Commerce Assurance Ltd v Alli (1992) 3 NWLR (Part 232) 710 at 724–725 H–A; Ede v Omeke (1992) 5 NWLR (Part 242) 428, 434 G–H and Globe Fish-ing Industries Ltd v Coker (1990) 7 NWLR (Part 162) 265, 282 E–F and submits that before the issue of the validity or otherwise of the decision of a court of record can be validly and properly raised, considered and pronounced upon by an appellate court, there must be an existing appeal filed against the decision which is in dispute, otherwise the appel-late court may end up acting in vain if it is shown that there was no appeal against the decision of the lower court in the first place.

It is argued in the brief of the NDIC (hereinafter referred to as “the respondent”) as follows:–

“It will be recalled that the respondent filed two notices of appeal to the court below. The first one filed on 4 October, 1994 was against, the registry judgment. while the second one dated 27 Oc-tober, 1994 was against the ruling of 14 October, 1994. That the respondent initially elected to pursue the second appeal was dic-tated by the circumstances already referred to in paragraph 2.14 above. As indicated in paragraphs 2.15 to 2.20 hereof, the court below was constrained by what looked like the absence of a judg-ment from the records before it to request for more facts about the judgment of the Lagos High Court, if ever there was any.


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Furthermore, when the appellant in its verifying affidavit exhib-ited the said ‘judgment’ the court below was rightly left in no doubt that the validity of the judgment itself was crucial to the de-termination of the issues arising from the ruling of 14 October, 1994, which naturally could not be divorced from the registry judgment. It is submitted that the only proper course open to the court below in the circumstances was to set in motion, as it did, the machinery for the determination of the validity or otherwise of the registry judgment. It is instructive to recall that the amended notice of appeal specifi-cally called into question the constitutionality of the registry judgment. It is also significant that both the appellant and the re-spondent specifically addressed the issue of the constitutionality of the registry judgment in their respective supplementary briefs. It is therefore, quite evident that the parties were fully aware of the fact that the validity of the registry judgment was crucial to the determination of the other issues before the court below. As rightly pointed out by the appellant in various paragraphs of its brief, one cannot put something on nothing. Accordingly, if there appears to be no real judgment upon which a subsequent ruling by a court can he sustained, reason and prudence clearly dictate that an appellate court called upon to review such subsequent ruling has a duty to examine, determine and also pronounce on the sus-tainability of such judgment. The respondent submits that that was precisely the sensible and logical step taken by the court below in this case. The references by the appellant to certain cases in para-graphs 4.16 to 4.18 of its brief are most inappropriate and, indeed, irrelevant to the present case. The dictum of the Supreme Court in Atoyebi v Governor of Oyo State (1994) 5 NWLR (Part 344) 290 at 305 paragraphs B–C was clearly quoted out of context. Con-trary to the impression sought to be created by the appellant, there was in fact a complaint in the present case, as clearly evidenced by the grounds of appeal in the amended notice of appeal. Simi-larly, the other cases cited in those paragraphs have been taken out of their contexts. There is no doubt that the appellant itself recog-nised the fact that the validity of the registry judgment was clearly in issue before the court below. None of the parties was at any time misled into thinking that this was not so. Arising from the above, it is submitted that all the appellant sought to do in its brief was merely to avoid the real issue in the present case by raising essentially technical points in the hope that this Honourable Court would feel inclined not to determine the funda-mental issue of the constitutionality of the registry judgment ob-tained by the appellant in the Lagos High Court on 12 July, 1994.


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The respondent therefore urges your Lordships to hold that the is-sue of the constitutionality of the registry judgment of 12 July, 1994 was properly before the Court of Appeal when it heard ar-guments in respect of the matter on 21 January, 1997.”

Professor Olawoyin, for the respondent, in his oral argu-ments, observes that there was an appeal filed against the High Court judgment on 12 July, 1994 but that that appeal was not prosecuted and it was in the process of prosecuting that appeal that the issue of the validity of the judgment of 12 July, 1994 was raised. He then amended the notice of ap-peal in that second appeal to accommodate the issue and submits that it is irrelevant that grounds 5 and 6 thereof did not arise out of the ruling of 14 October, 1994. He cites At-torney-General of Oyo State v Fairlakes Hotel (1988) 5 NWLR (Part 92) 1 at 23 B–E and submits that the status of the judgment of 12 July, 1994 was a necessary and relevant consideration for the appeal against the ruling of 14 October, 1994. Professor Olawoyin further submits that by virtue of section 16 of the Court of Appeal Act the court below had the power to raise the issue and make order necessary for determining the real question in controversy.

I have given careful consideration to the submissions of learned Counsel for the parties. It is not in dispute that the decision on appeal before the court below was the ruling of 14 October, 1994 and not the judgment of 12 July, 1994. In-deed, the defendant (now in liquidation) which was con-cerned with that judgment was content to abide by it and had, infact, taken steps to satisfy it. It was in the process of doing so that the Central Bank withdrew the licence of the defendant and appointed the NDIC as liquidator. The liqui-dator thought differently and proceeded to appeal against the judgment of 12 July, 1994 but, strangely enough, did not pursue the appeal. The liquidator pursued rather its appeal against the ruling of 14 October, 1994 that ordered the sale of the defendant’s movable property on attachment pursuant to the execution of a writ of fieri facias issued by the High Court. The question that arises is: can the validity of the judgment of 12 July, 1994 be raised in the appeal against the ruling of 14 October, 1994? I rather think not.


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Grounds 5 and 6 in the respondent’s amended notice of appeal in the court below read as follows:– “(5) The learned trial Judge erred in law when he gave his ap-

proval for the registry judgment entered in favour of the re-spondent in chambers in the absence of the defendant bank and thereby denied it the opportunity to be heard contrary to the provisions of section 33(3) of the 1979 Constitution, as amended.

(6) The learned trial Judge erred in law by approving, the pur-ported registry judgment when same was not delivered in accordance with the mandatory provisions of section 258(1) of the 1979 Constitution, as amended and Order 36 Rule 1 of the High Court of Lagos State (Civil Procedure) Rules, 1979.”

The particulars to these grounds are omitted. There can be no doubt that these grounds do not relate to

anything decided by the High Court in its ruling of 14 Octo-ber, 1994 on appeal before the court below. Those grounds would be relevant in an appeal against the High Court judg-ment of 12 July, 1994. As this Court, per Karibi-Whyte, JSC put it in Metal Construction (West Africa) Ltd v D.A. Migli-ore and others. In Re Miss C. Ogundare (1990) ANLR 142 at page 148; (1990) 1 NWLR (Part 126) 299 at 311:–

“What then is a ground of appeal? I consider it presumptuous, but will still venture to define a ground of appeal as consisting of error of law or fact alleged by an appellant as the defect in the judgment appealed against and relied upon to set it aside.” (Italics is mine for emphasis.)

It follows from this that any complaint that does not relate to the judgment appealed against cannot be relevant in the appeal and will therefore, be incompetent. This is so be-cause it is settled law that a judgment subsists until it is set aside and an aggrieved person who has not appealed against a judgment stands no chance of seeking to have the judg-ment set aside in an appeal against another judgment, ex-cept, perhaps, in the circumstances covered by Order 3 Rule 22 of the Court of Appeal Rules which requires that an in-terlocutory judgment against which there is no appeal is not to prejudice an appeal before the court or where that other


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judgment is a nullity and it is being set up to support a plea of res judicata.

Prof. Olawoyin has argued that section 16 of the Court of Appeal Act enabled the court below to raise the issue of the validity of the judgment of 12 July, 1994. Now, section 16 provides:– “16. The Court of Appeal may from time to time, make any or-

der necessary for determining the real question in contro-versy in the appeal, and may amend any defect or error in the record of appeal; and may direct the court below to in-quire into and certify its findings on any question which the Court of Appeal thinks fit to determine before final judg-ment in the appeal and may make an interim order or grant any injunction which the court below is authorised to make or grant and may direct any necessary inquiries or accounts to be made or taken and generally shall have full jurisdic-tion over the whole proceedings as if the proceedings had been instituted in the Court of Appeal as court of first in-stance and may re-hear the case in whole or in part or may remit it to the court below for the purpose of such re-hearing or may give such other directions as to the manner in which the court below shall deal with the case in accor-dance with the powers of that court, or, in the case of an ap-peal from the court below in that court’s appellate jurisdic-tion, order the case to be re-heard by a court of competent jurisdiction.”

As wide as the powers given the Court of Appeal appear to be they do not include, in my humble view, power to con-sider incompetent grounds of appeal such as grounds 5 and 6 in the appeal before it were. It is one thing for the court to raise an issue, suo motu, and ask to be addressed on it. It is, however, another thing to consider and pronounce on in-competent grounds of appeal which, in duty, it ought to have been struck out.

Finally, on question (1), I hold that Grounds 5 and 6 in the respondent’s amended notice of appeal in the court below were incompetent and ought to have been struck out by that court. The pronouncements and decisions by the court below on these grounds are incompetent and are hereby set aside.


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Question 2:– This question has been answered under question (1). As

the judgment of the Lagos High Court given on 12 July 1994 was not on appeal before the Court below or this Court, its validity could not be decided in the appeal before the court below nor in the appeal now before us. Question 3:–

The court below found that the plaintiff is a “bank” envis-aged in section 230(1)(d) of Decree No. 107 of 1993. I think there is an error here. For Decree No. 107 of 1993 titled Constitution (Suspension and Modification) Decree has no section 230(1)(d). What I believe the court below and all parties had (and still have) in minds section 230(1)(d) of the Constitution of the Federal Republic of Nigeria, 1979 as amended by section 1(3) of Decree No. 107 of 1993. The plaintiff, in this appeal, contends that the finding of the court below is wrong and relies on the definition of the word “bank” in section 61 of the Banks and Other Financial Institutions Decree No. 25 of 1991 (“BOFID”, for short).

Now section 230(1)(d) of the 1979 Constitution (as amended) provides:– “230(1) Notwithstanding anything to the contrary contained in

this Constitution and in addition to such other jurisdic-tion as maybe conferred upon it by an Act of the Na-tional Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion to any other court in civil causes and matters arising from:–

(d) banking, banks, other financial institutions, includ-ing any action between one bank and other, any ac-tion by or against the Central Bank of Nigeria aris-ing from banking, foreign exchange, coinage, legal tender, bills of exchange, letter of credit, promis-sory note and other fiscal measures:–

Provided that this paragraph shall not apply to any dis-pute between an individual customer and his bank in re-spect of transactions between the individual customer and the bank.”

The word “bank” is not defined in the Constitution nor in the Interpretation Act. In its ordinary grammatical meaning, the


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word “bank” means an organisation or place that provides financial service. Having regard to the provisions of the law setting up the plaintiff, particularly. Section 5(1)(a) and sec-tion 6(1)(a) and (b) of the Federal Mortgage Bank of Nigeria Decree No. 82 of 1993; I think it is right to say that it falls within this ordinary meaning. Whatever difficulty one may have is dispelled by the definition of the word “bank” in sec-tion 29 of the Failed Banks (Recovery of Debts) and Finan-cial Malpractices in Bank Decree No. 18 of 1994 which de-fines the word thus:–

“Bank has the meaning assigned to it under the Banks and Other Financial Institutions Decree No. 25 of 1991 and includes:–

(a) a financial institution as defined under that Decree or under the Nigeria Deposit Insurance Decree, 1988, and

(b) a development bank and any other bank established by law.”

In my respectful view, therefore, the court below is right in holding that the plaintiff is a bank and comes within section 230(1)(d) of the Constitution (as amended). Question 4:–

The Court below per Uwaifo, JCA observed:– “But I find it difficult, with due respect, to accept the submission of Professor Olawoyin that the action arising from the transaction which took place between the appellant and the respondent is an action between one bank and another falling within the purview of section 230(1)(d) through what he called ‘inter bank placement’ which, however, he did not define, as to see whether it excludes every aspect of individual customer and bank relationship. The mere fact that a bank takes an action against another bank does not make such action triable exclusively by the Federal High Court under section 230(1)(d). It must depend on the nature of the trans-action and the capacity in which one of the banks dealt with the other. There is therefore the need to examine such transaction and to look at the proviso which, talks of transactions between an indi-vidual customer and his bank to ascertain its applicability.”

After considering the nature of the transaction between the plaintiff and the defendant, the court concluded:–

“It must however be realised that the horizon left for the State High Court under the proviso must not be shrunken into absurdity, or perhaps undue insignificance, by a restrictive interpretation to


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oust its jurisdiction whenever two banks are involved, simply be-cause they are banks. A bank is an individual legal entity. It can be an individual customer to any other person when not acting as a bank. So it is that it can be an individual customer to a bank in any particular transaction depending on the type of transaction. There-fore, a possible scenario where one bank as an individual legal en-tity plays the part of an individual customer to another bank in a given transaction must be appreciated and not ruled out. For in-stance, when one bank (say a merchant bank) renders service to another bank as an ‘issuing house’, any dispute arising from that transaction between the two banks must be heard in the Federal High Court. But if one bank as an individual is interested in earn-ing interest from another bank through deposit, then the relation-ship of individual customer and bank is established as in the pre-sent case. Any dispute arising from that transaction is triable in the State High Court as well as in the Federal High Court. It must be taken, I think, that by depositing money with the appellant bank for a given period so as to earn interest payable by that bank, the re-spondent (though a bank) created the relationship, in respect of that transaction of an individual customer and its bank. The N5,000,000 deposit for 90 days duration had been rolled over four times at 40% interest per annum. The dispute came about when at the maturity of the fourth roll over period the appellant defaulted in repayment of the interest for that last quarter and the principal. I think the Lagos State High Court would have jurisdiction to hear the dispute as to liability under the proviso to section 230(1)(d) of the Constitution of the Federal Republic of Nigeria, 1979 as amended by Decree No. 107 of 1993.”

The respondent was unhappy with this conclusion and this forms the kernel of its cross appeal. It is contended that by virtue of the provisions of section 230(1)(d) of the Constitu-tion, the High Court of Lagos State lacked competence and jurisdiction to entertain the action brought by the plaintiff against another bank, the defendant in this case. It is the fur-ther contention of the respondent that any action between one bank and another falls within the exclusive jurisdiction of the Federal High Court.

It is contended for the plaintiff that the transaction be-tween the plaintiff and the defendant leading to the action in the High Court of Lagos State was a dispute between an in-dividual customer and his bank which is exempted from the


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exclusive jurisdiction of the Federal High Court by the pro-viso in section 230(1)(d). It is submitted that the plaintiff, in relation to that transaction, was an individual customer to the defendant. Reliance placed on Bizee Bee Hotels Ltd v Allied Bank (Nigeria) Ltd (1996) 8 NWLR (Part 465) 176 at 185–186 C.A.

I have considered the arguments advanced by the parties. I agree entirely with the reasoning of the Court below. With respect to the learned Counsel for the respondent. I do not share the view that the proviso in section 230(1)(d) would not apply where in a customer/banker relationship the cus-tomer is a bank. To say that where there is a dispute between two banks, the forum for the resolution of the dispute is the Federal High Court is to read into section 230(1)(d) what is not there. A lot depends on the nature of the transaction be-tween the two banks. The facts show that plaintiff, like any other customer, placed a short term deposit with the defen-dant on agreed interest. After some roll overs, plaintiff sought to retrieve its deposit and interest but defendant de-faulted. In the absence of any evidence to the contrary about the custom in the industry I must hold that it is a simple cus-tomer/banker relationship which the proviso in section 230(1)(d) exempts from the exclusive jurisdiction of the Federal High Court.

With this conclusion, I must hold that the cross appeal fails and it is hereby dismissed by me. Question 5:–

In the course of his judgment with which the other Justices agreed, Uwaifo, JCA said:–

“The issue, or matter arising therefrom, does not quite end there. After it became known that the NDIC had become the provisional liquidator of the United Commercial Bank Limited. The respon-dent as plaintiff/applicant commenced or still continued proceed-ings against it culminating in the ruling of 14 October, 1994 given by Adeniji J. There was an objection that the court had no jurisdic-tion to entertain the application which was to compel the NDIC to bring the company’s goods to the court premises to be sold. The NDIC had taken possession of the goods by law as the provi-sional liquidator as I have already shown. The learned trial Judge


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overruled the objection and granted the motion. The ruling is, of course, a subject of this appeal. The true position is that once a provisional liquidator is appointed for a company. No action or proceeding shall be proceeded with or commenced against the company except by leave of the court given on such, terms as the, court may impose: see section 417 of the CAMA. The court meant there is the Federal High Court. If there-fore such action was intended to be proceeded with or commenced against the company in a State High Court, it cannot he done with-out obtaining the leave of the Federal High Court (see Abekhe v Ni-geria Deposit Insurance Corporation (1995) 7 NWLR (Part 406) 228 at 242–243). No such leave was obtained here. It follows that the proceeding in respect of that motion was conducted without ju-risdiction and the order made was accordingly a nullity.”

It is the conclusion reached in the passage above that has come under attack in this appeal. It is submitted in the plain-tiff’s brief thus:– “5.43 With respect, the appellant submits that the Court of

Appeal erred when it adverted to section 417 of CAMA on this issue when, in fact, section 417 is totally inap-plicable to the appellant’s said motion given the sur-rounding circumstances.

5.44 It is submitted that section 417 of CAMA is only appli-cable to action which are just about to be freshly insti-tuted or proceedings which are already pending in court against a company for which a provisional liquidator has been appointed. Accordingly, section 417 would be rendered inapplicable in respect of matters which had already been concluded before the appointment of the provisional liquidator.

5.45 The appellant’s action against the defendant (United Commercial Bank Limited) had been concluded on 12 July, 1994 when judgment was obtained against the de-fendant. Therefore the action was neither pending nor fresh as at the date the respondent was appointed as provisional liquidator.

5.46 Therefore, the appellant’s motion for the production of the attached goods simply sought, at best, an ancillary or consequential relief, since judgment had already been obtained in the substantive suit on 12 July, 1994 about two (2) months before the respondent’s appoint-ment as the provisional liquidator.


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5.47 In fact, the respondent was appointed as provisional liq-uidator of the defendant not just after the date of judg-ment, but in fact, after the appellant had levied execu-tion of same and the defendant had paid N2 million and also issued a cheque in settlement of the balance of the judgment debt.

5.48 It is submitted that section 417 CAMA does not apply to applications filed after judgment (ie after the final con-clusion of an action) consequential or ancillary reliefs such as applications for stay of execution, instalmental payment of a judgment debt, setting aside of a default judgment or production of goods which had been at-tached in the course of levying execution of a judgment which predates the appointment of the provisional liqui-dator.”

The respondent offered no arguments on this issue. What proceedings did the court below hold could not be

continued with without the leave of the Federal High Court? It was the proceedings leading to the High Court ruling of 14 October, 1994. The proceedings commenced with a motion on notice dated 15 September, 1994 in which the plaintiff sought against the respondent, for orders:– “(i) An order of this Honourable Court compelling the respon-

dent (NDIC) to produce forthwith and deposit in the Lagos High Court premises all the defendant’s attached properties listed in the inventory attached herewith and marked exhibit A which said properties were attached on 5 September, 1994 by a bailiff of the Lagos High Court in the name of the plaintiff for an execution of the judgment of this Honour-able Court given on 14 July, 1994 and which said properties have now been removed and detained by the respondent (NDIC) and which still remain in the respondent’s posses-sion and custody.

(ii) An order of this Honourable Court directing the deputy sheriff of the Lagos High Court to take custody and control of the said properties and to immediately effect the sale of same in accordance with section 22(2) of the Sheriffs and Civil Process Law of Lagos State.”

The respondent was the party to the proceedings and not the defendant. For the respondent had taken possession of the defendant’s goods under attachment and the purpose of the motion on notice was to take the goods from the possession


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of “the respondent and to hand same to the deputy sheriff”. Is this the action or proceeding envisaged in section 417 of CAMA? I rather think not.

Section 417 reads:– “If a winding up order is made or a provisional liquidator is ap-pointed, no action or proceeding shall be proceeded with or com-menced against the company except by leave of the court given on such terms as the court may impose.”

Surely, the plaintiff’s motion cannot be described as an ac-tion or proceeding proceeded with or commenced against the defendant. We must not lose sight of the fact that at the stage of the proceeding, the respondent was brought in its own behalf and not as representing the defendant. In any event, what is prohibited by section 417 except with leave of court, is an action or proceeding pending or instituted in the Federal High Court for that is the meaning of the word “court” as used in the section – see section 650 of the CAMA. I think, therefore, that the court below was in error when it held that leave was required before the plaintiff could proceed with its motion against the respondent in the High Court of Lagos State. I resolve question 5 in favour of the plaintiff. Question 6:–

Again, the Court below, per Uwaifo, JCA observed:– “The NDIC on being appointed the official receiver or as a provi-sional liquidator of a company shall have the powers of a liquida-tor conferred by or under the CAMA. One of such powers as given under section 501(1) of the CAMA is that where any goods of a company are taken in execution and before the sale thereof or, the completion of the execution by the receipt or recovery of the full amount of the levy; notice is served on the sheriff that a provi-sional liquidator has been appointed; the sheriff shall, on being so required, deliver the goods and any money seized or received in part satisfaction of the execution to the liquidator. In the present case, the order of the court to attach the appellant’s property was made on 5 September, 1994 while the NDIC was appointed provisional liquidator on 8 September. By law, as ar-gued by Professor Olawoyin, sale could not be effected by the Deputy Sheriff until at least five days after attachment (see section 22(1) of the Sheriff’s and Civil Process Law (Cap 127) Laws of Lagos


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State). I think Professor Olawoyin is right to say that the deputy sheriff who had notice of the appointment of provisional liquidator was bound to deliver the goods attached to the appellant and that the appellant was entitled to take custody thereof.”

The plaintiff contends that the court below was in error in its conclusion. The respondent contends to the contrary.

Now section 38(1)–(3) of the BOFID provides:– “38(1) Where the Governor makes an order revoking the li-

cence of a bank and requiring the business of that bank to be wound up, the bank shall, within 14 days of the date of the order, apply to the Federal High Court for an order winding up the affairs of that bank and the Federal High Court shall hear the application in priority to all other matters.

(2) If the bank fails to apply to the Federal High Court within the period specified in subsection (1) of this sec-tion, the Governor may apply to the Federal High Court for the winding up of the bank.

(3) If the Governor is satisfied that it is in the public interest to do so, he may, without waiting for the period men-tioned in subsection (1) of this section to elapse, appoint the Nigerian Deposit Insurance Corporation or any other person as the official receiver or as a provisional liqui-dator and the Corporation or such other person shall have the power conferred by or under the Companies and Allied Matters Decree 1990 and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for the purpose of that Decree.”

Other relevant statutory provisions are sections 500 and 501 of the CAMA and these run thus:– “500(1) Where Company is subsequently wound up, the credi-

tor shall not be entitled to retain the benefit of the exe-cution or attachment against the liquidator in the wind-ing up of the company, unless he has completed the execution or attachment before the commencement of the winding up:–

Provided that:– (a) where any creditor has had notice of a meeting

having been called at which a resolution for vol-untary winding up is to be proposed, the date on which the creditor so had notice shall for the


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purposes of the foregoing provision, be substi-tuted for the date of the commencement of the winding up;

(b) if a person purchases in good faith under a sale by the sheriff any goods of a company on which an execution has been levied, he shall acquire a good title to them against the liquidator:

(c) the rights conferred by this subsection on the liq-uidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks fit.

(2) For the purposes of this section, an execution against goods shall be taken to be completed by seizure and sale, and an attachment of a debt shall be deemed to be completed by receipt of the debt, and an execution against land shall be deemed to be completed by sei-zure and, in the case of an equitable interest, by the appointment of a receiver.

501(1) Subject to the provisions of subsection (3) of this sec-tion, where any goods of a company are taken in exe-cution and before the sale thereof or the completion of the execution by the receipt or recovery of the full amount of the levy, notice is served on the sheriff that a provisional liquidator has been appointed or that a winding up order has been made or that a resolution for voluntary winding up has been passed the sheriff shall, on being so required, deliver the goods and any money seized or received in part satisfaction of the execution to the liquidator, but the costs of the execu-tion shall be a first charge on the goods or money so delivered, and the liquidator may sell the goods, or a sufficient part thereof, for the purpose of satisfying that charge.

(2) Subject to the provisions of subsection (3) of this sec-tion, where under an execution in respect of a judg-ment for a sum exceeding N100 the goods of a com-pany are sold or money is paid in order to avoid sale the sheriff shall deduct the costs of the execution from the proceeds of the sale or the money paid, and retain the balance for fourteen days: and if within that time notice is served on him of a petition for the winding up of the company having been presented or of a meeting having been called at which there is to be proposed a resolution for the voluntary winding up of the


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company and an order is made or a resolution is passed, as the case may be, for the winding up of the company, the sheriff shall pay the balance to the liqui-dator, who shall be entitled to retain it as against the execution creditor.

(3) The rights conferred by this section on the liquidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks fit.

(4) In this section and section 500 of this Act:– (a) ‘goods’ includes chattels personal; and (b) ‘sheriff’ includes any officer charged with the

execution of a writ or other process.”

I think the above provisions are clear enough and present no difficulty in interpretation. It is not in dispute that the re-spondent was appointed by the Governor of the Central Bank, on his revoking the defendant’s licence, to act as pro-visional liquidator of the defendant. This was on 8 Septem-ber 1994. On 5 September, 1994 the Deputy Sheriff of the High Court of Lagos State had, at the instance of the plain-tiff, attached the goods of the defendant. By law, sale could not take place until five clear days after attachment of the goods, that is, 10 September, 1994. Thus at the time the re-spondent was appointed, the sale of the defendant’s goods had not taken place. By section 500(2) of CAMA, execution begun on 5 September, 1994 had not been completed and by section 500(1) the plaintiff could not retain the benefit of the execution. unless the rights conferred on the respondent by the section were set aside by the court in favour of the plain-tiff. The “court” is the Federal High Court see section 650 of the Act and not the High Court of Lagos State as argued by learned Counsel for the plaintiff. There has been no such or-der made by the Federal High Court. The position, in law, then is that the respondent was in lawful possession of the goods of the defendant seized by the deputy sheriff in execu-tion levied on 5 September, 1994. This is so because section 501(1) enjoined the deputy sheriff, in the circumstances of this case to deliver the seized goods to the respondent.

In my respectful view the court below is right in its con-struction of the statutory provisions applicable in this case.


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It was wrong of the learned trial Judge to have granted the application before him. The respondent was in lawful pos-session of the defendant’s goods which on 8 September, 1994 could no longer be sold by the deputy sheriff. I resolve question 6 in favour of the respondent.

With this conclusion, I must hold and I so do that the plain-tiffs appeal must fail notwithstanding that questions 1, 4 and 5 are resolved in its favour. It is hereby dismissed by me. The order of the court below setting aside the High Court ruling of 14 October, 1994 is affirmed by me but its order in respect of the judgment of 12 July, 1994 is set aside and declared a nullity having been made without jurisdiction.

As both the main appeal and the cross appeal fail, I make no order as to costs. BELGORE JSC: I have read the judgment of my learned brother, Ogundare, JSC with which I am in full agreement. The appeal is dismissed with no order as to costs. WALI JSC: I am privileged to have read in advance the lead judgment of my learned brother Ogundare, JSC, with which I entirely agree.

For the same reasons ably stated in the judgment which I adopt, I also dismiss the appeal, adopting the consequential orders made therein. OGWUEGBU JSC: I have had the advantage of reading the draft of the judgment just delivered by my learned brother Ogundare, JSC. He has fully dealt with the facts and all the issues raised in this appeal and agree with the reasoning and conclusions arrived at by him. I wish, however, to add the following points.

The issue of the jurisdiction of the Lagos High Court to entertain the action rests essentially on whether or not the appellant is a “bank” within the contemplation section 230(1)(d) of the Constitution as amended by section 1(3) of Decree No. 107 of 1993. I will first set out the provisions of section 230(1)(d) of the Constitution as amended. It reads:– “230(1) Notwithstanding anything to the contrary contained in

this Constitution and in addition to such other jurisdiction


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as may be conferred upon it by an Act of the National Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion to any other court in civil causes and matters arising from:–

(a) . . . (b) . . . (c) . . . (d) banking, banks, other financial institutions, includ-

ing any action between one bank and other, any ac-tion, by or against the Central Bank of Nigeria aris-ing from banking, foreign exchange coinage, legal tender, bills of exchange, letter of credit, promis-sory note and other fiscal measures:–

Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the indi-vidual customer and the bank.”

It was submitted in the appellant’s brief that two mandatory conditions must be satisfied by an institution before it can legally qualify as a “bank”, namely:– (i) Such institution must be a company duly incorpo-

rated at the Corporate Affairs Commission, Abuja. (ii) Such institution must hold a valid banking licence

issued by the Central Bank of Nigeria under the Banks and Other Financial Institutions Decree No. 25 of 1991 (“BOFID” for short).

We were referred to sections 2, 51 and 61 of the Banks and Other Financial Institutions Decree No. 25 of 1991.

It was the submission of the respondent in its brief that the appellant is a “bank”. The court was referred to the provi-sions of section 7 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks (Amendment) Decree No. 18 of 1995 which defined the word “bank”. It was fi-nally submitted that the appellant is in law and infact a bank and that the Federal High Court has exclusive jurisdiction to entertain the action by virtue of section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993.


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In the absence of a definition of the word “bank” in the Constitution, I have to fall back on the following provisions of our laws dealing with banking:–

Section 43(1)(a) of the Banking Act Cap 28 Laws of the Federa-tion of Nigeria, 1990; section 7 of Failed Banks (Recovery of Debts) And Financial Malpractices in Banks (Amendment) De-cree No. 18 of 1995. Banks and Other Financial Institutions De-cree No. 25 of 1991 and Decree No. 82 of 1993. Banking Act:–

“Section 43(1) In this Act unless the context otherwise requires, the following expressions have the meanings hereby assigned to them, respectively, that is:–

‘bank’ means any person who carries on bank-ing business, and includes a commercial bank, an acceptance house, discount house, financial institution, institution and merchant bank, and in this definition:–

(a) . . . (b) . . . (c) . . . (d) ‘financial institution’ means any person in

Nigeria who transacts banking business but who is not a commercial bank, an accep-tance house or a discount house.”

The Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks (Amendment) Decree No. 18 of 1995 provides:–

“Section 7, section 29 of the principal Decree is amended by sub-stituting for the interpretation of the words ‘bank’ and ‘failed bank’, the following new interpretation, that is:–

‘bank’ has the meaning assigned to it under the Banks and Other Financial Institutions Decree 1991 and includes:–

(a) a financial institution as defined under that Decree or under the Nigeria Deposit Insurance Corporation De-cree 1988:

(b) a development bank, (c) a mortgage bank or any other bank established by

law.” (Italics is for emphasis.)

In section 61 of Banks and Other Financial Institutions De-cree No. 25 of 1991, “bank” means a bank licensed under


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that Decree. Even though section 51(1)(c) of Decree No. 25 of 1991 exempts the appellant from the provisions of that Decree, it does not follow that it is not a “bank” under sec-tion 230(1)(d) of the 1979 Constitution as amended by sec-tion 1(3) of Decree No. 107 of 1993.

Decree No. 25 of 1991 regulates banking and other finan-cial institutions by prohibiting the carrying on of such busi-ness in Nigeria except under licence and by a company in-corporated in Nigeria. The definition of the word “bank” in section 7 of Decree No. 18 of 1995 laid to rest any ambigu-ity as to whether the appellant is a “bank” which comes within section 230(1)(d) of the Constitution as amended by Decree No. 107 of 1993. I have therefore come to the same conclusion as the court below that the appellant is such a bank over which the Federal High Court has jurisdiction to the exclusion of any other court in matters set out in section 230(1)(d).

The next point to consider in this appeal is whether the na-ture of the transaction between the parties to the proceedings created the relationship of an individual customer and its bank or a transaction between one bank and another falling within the provisions of section 230(1)(d) of the Constitu-tion as amended.

The court below, per Uwaifo, JCA (as he then was) held as follows:–

“But I find it difficult, with due respect, to accept the submission of Professor Olawoyin that the action arising from the transaction which took place between the appellant and the respondent is an action between one bank and another falling within the purview of section 230(1)(d) through what he called ‘inter bank placement’ which, however, he did not define as to see whether it excludes every aspect of individual customer and bank relationship. The mere fact that a bank takes an action against another bank does not make such action triable exclusively by the Federal High Court under section 230(1)(d). It must depend on the nature of the trans-action and the capacity in which one of the banks dealt with the other. There is therefore the need to examine such transaction and to look at the provision which talks of transactions between an in-dividual customer and his bank to ascertain its applicability . . . It must be taken, I think, that by depositing money with the


Ogwuegbu JSC


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appellant bank for a given period so as to earn interest payable by that bank, the respondent (though a bank) created the relationship in respect of that transaction of an individual customer and its bank. The N5,000,000 deposit for 90 days duration had been rolled-over four times at 40% interest per annum. The dispute came about when at the maturity of the fourth roll over period the appellant defaulted in repayment of the interest for that last quar-ter and the principal. I think the Lagos State High Court would have jurisdiction to hear the dispute as to liability under the pro-viso to section 230(1)(d) of the Constitution as amended by De-cree No. 107 of 1993.”

I entirely agree with the court below on the above conclu-sion. One has to look at the nature of the transaction be-tween the parties. When the appellant deposited the money with the respondent for the given period so as to earn inter-est, payable by the latter, the relationship of individual cus-tomer and its bank was created and the proviso in section 230(1)(d) apply even though the appellant is itself a bank. The dispute which arose between the parties was between an individual customer (appellant) and its bank (respondent) in respect of transaction between them in those capacities.

For the above reasons and the fuller reasons set out in the judgment of my learned brother Ogundare, JSC, I too will and hereby dismiss the plaintiff’s appeal even though some of the questions for determination were answered in his fa-vour. The cross appeal also fails. I abide by the consequen-tial orders made by my learned brother in the said judgment. I make no order as to costs. MOHAMMED JSC: I have had a preview of the judgment written by learned brother, Ogundare, JSC, in draft, and I agree with his opinion therein.

The issue of the constitutionality of so-called “registry judgment” was not properly before the Court of Appeal be-cause there was no appeal filed against the judgment which was delivered by the High Court on 12 July, 1994. It is plain that section 16 of the Court of Appeal Act could not cure the mistake committed by learned Counsel for the respondent in the court below when he included Grounds 3 and 6 which question the legality of “the registry judgment” in the notice


Mohammed JSC


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of appeal filed against the ruling delivered by the trial High Court on 14 October, 1994.

The respondent who was appellant at the court below be-ing dissatisfied with the trial court’s decisions in entering a “registry judgment” against it and the ruling delivered on 14 October, 1994 decided to appeal against the two decisions. However, the respondent failed to pursue an appeal it filed against the “registry judgment” delivered on 12 July, 1994. It abandoned the appeal. It now filed a notice of appeal against the ruling delivered on 14 October, 1994 and made grounds 5 and 6 in the notice of appeal to question the con-stitutionality of the “registry judgment”. This obviously is wrong. Since NDIC (the respondent) was not satisfied with the decision of the trial High Court in entering a “registry judgment” against the defendant; the Corporation (“NDIC”) must file a separate notice of appeal with valid grounds of appeal in order to sustain the appeal. It cannot use the notice of appeal filed against the ruling delivered by the High Court on 14 October, 1994 to prosecute the appeal against the “registry judgment”.

There cannot be recognisable appeal without a proper no-tice of appeal and it is fundamental that a notice of appeal must state the decision against which the appeal has been brought. In the case of Taliatu Adio v The Attorney-General of Oyo State (1990) 7 NWLR (Part 163) 448 at 483 Kola-wole, JCA dealing with similar situation held, quite rightly that if no notice of appeal is filed against the judgment of a lower court, the Court of Appeal is incompetent to embark upon the hearing of the appeal. The appeal must properly be initiated against a particular judgment in accordance with Order 3 Rule 2 of the Court of Appeal Rules 1981. For the avoidance of doubt, I will reproduce Order 3 Rules 2(1), (2) and (3 ) of Court of Appeal Rules. It reads as follows:– “1. All appeals shall be by way of rehearing and shall be

brought by notice (hereinafter called ‘the notice of appeal’) to be filed in the registry of the court below which shall set forth the grounds of appeal, stating whether the whole or part only of the decision of the court below is complained of (in the latter case specifying such part) and shall state


Mohammed JSC


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also the exact nature of the relief sought and the names and addresses of all parties directly affected by the appeal which shall be accompanied by a sufficient number of cop-ies for service on all such parties; and it shall also have en-dorsed on it an address for the service.

2. If the grounds of appeal allege misdirection or error in law, the particulars and the nature of the misdirection or error shall be clearly stated.

3. The notice of appeal shall set forth concisely and under dis-tinct heads the grounds upon which the appellant intends to rely at the hearing of the appeal without any argument or narrative and shall be numbered consecutively.”

Consequently, Grounds 5 and 6 filed by the respondent be-fore the Court of Appeal questioning the constitutionality of the registry judgment are therefore incompetent. They are struck out.

I also agree that the respondent will continue to be in law-ful possession of the seized goods of the defendant and the deputy sheriff had no power to seize the goods without ob-taining an order from the Federal High Court.

This appeal therefore fails and it is dismissed. I also agree to dismiss the cross appeal for the reasons given in the lead judgment. The decision of the Court of Appeal in respect of the registry judgment is hereby set aside. The decision of the Court of Appeal setting aside the ruling by the High Court delivered on 14 October, 1994 is hereby affirmed. I also make no order as to costs. ONU JSC: I am in complete agreement with the reasoning and conclusions of my learned brother Ogundare, JSC, con-tained in the leading judgment just delivered by him, a pre-view of which I had the privilege to have in draft. I have nothing usefully to add thereto, except to adopt the same as mine, inclusive of all the orders therein made. IGUH JSC: I have had the privilege of reading in draft the judgment just delivered by my learned brother, Ogundare, JSC, and I entirely agree with the reasoning and conclusion therein. I adopt them as mine and I have nothing more to add.

Consequently, I, too, dismiss both appeals.


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The order of the Court of Appeal setting aside the ruling of the trial court made on the 14 October, 1994 is hereby af-firmed but its order in respect of the judgment of the 12 July, 1994 which was made without jurisdiction is hereby declared a nullity and accordingly set aside. I abide by the order for costs made in the leading judgment. Appeal and cross-appeal dismissed.

[1999] 9 N.B.L.R. (FAILED BANKS TRIBUNAL, ZONE II, ENUGU)


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Federal Republic of Nigeria v Dr Ime Ekong Ebong FAILED BANKS TRIBUNAL, ZONE II, ENUGU BOZIMO J Date of Judgment: 24 FEBRUARY, 1999 Suit No.: FBT/EZ.II/O1C/98

Banking – Offences – Bank Manager – Failure to take nec-essary step to secure compliance with Banks Rules and Regulations – Punishment thereunder – Section 46(a) Banks and Other Financial Institutions Decree No. 25 of 1991 considered Criminal law and procedure – Plea Bargain – Attitude of Court Facts The accused person was arraigned on a 3 count charge of granting loan facilities to Century Warehouse Limited contrary to the regulations, circulars, rules and procedures of Century Merchant Bank Limited (in liquidation), and also being the Managing Director/Chief Executive of Century Merchant Bank Limited failed to take all reasonable steps to secure com-pliance by Century Merchant Bank Limited with the require-ment of section 20(2)(a)(ii), (iii) of the Banks and Other Fi-nancial Institutions Decree No. 25 of 1991 as amended, in that Century Merchant Bank Limited (now in Liquidation), with-out prior approval in writing of the Central Bank of Nigeria (“CBN”), permitted to be outstanding unsecured advances or loan of an aggregate and in excess of N50,000, to wit: N52,985,000 as at 30 June, 1997, in favour of Century Ware-houses Limited, a private Company of which he was at all ma-terial time a Director and thereby committed an offence pun-ishable under section 46(a) of the Banks and Other Financial Institutions Decree No. 25 of 1991 (as amended).

When the charge was read to the accused person he pleaded not guilty to all three counts. On the same date, trial commenced with the prosecution calling a witness. At the resumed hearing on 4 February, 1999, the accused person through his Counsel changed his plea to that of guilty in


Federal Republic of Nigeria v. Dr Ime Ekong Ebong 221

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respect of Counts 1 and 3. The prosecution withdrew count 2 of the charge. Held – Since the accused person has pleaded guilty to each of the counts, he is found guilty on his own plea and upon the facts presented by the prosecutor in respect of each of Counts 1 and 3 of the charge. Convicting the accused on Counts 1 and 3 only.

Nigerian statutes referred to in the judgment Banking Act Cap 28 Laws of the Federation of Nigeria, 1990, section 12(2) Banks and Other Financial Institutions Decree No. 25 of 1991, section 46(a)

Counsel For the prosecutor: G. Esa, Esq For the accused person: A.N. Anyamene, S.A.N. (with him Chief C.A. Anozie, Mrs G.I. Emedike, Miss O. Ozigbo and Mr O. Obi)

Judgment BOZIMO J: On the 25 January, 1999 the accused person was arraigned before this Tribunal on a three count charge to wit:– (1) That you Dr Ime Ekong Ebong of No. 16 Probyn

Road, Ikoyi Lagos, Lagos State, on or about the 23 October, 1989 and 23 January, 1991, in Lagos, whilst being the Managing Director of Century Mer-chant Bank Limited (now in Liquidation) granted the sum of N14,500,000 loan to Century Warehouses Limited contrary to the regulations, circulars, rules and procedures laid down by Century Merchant Bank Limited (now in Liquidation) regarding the grant of credit facilities and loans and thereby com-mitted an offence punishable under section 12(2) of the Banking Act Cap 28 Laws of the Federation of Nigeria 1990.


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(2) That you Dr Ime Ekong Ebong of No. 16 Probyn Road, Ikoyi Lagos, Lagos State, on or about the 25 June, 1993 in Lagos whilst being the Managing Di-rector of Century Merchant Bank Limited (now in Liquidation) granted the sum of N7,500,000 to Cen-tury Warehouses Limited contrary to the regulations circulars, rules and procedures laid down by the Century Merchant Bank Limited (now in Liquida-tion) regarding the grant of credit facilities and loans and thereby committed an offence under section 18(1)(b) of the Banks and Other Financial Institu-tions Decree No. 25 of 1991 as amended and pun-ishable under section 18(2) of the same Decree.

(3) That you Dr Ime Ekong Ebong of No. 16 Probyn Road, Ikoyi, Lagos, Lagos State, whilst being the Managing Director and Chief Executive Officer of Century Merchant Bank Limited (now in Liquida-tion) at Lagos between 25 June, 1991 and Decem-ber, 1993, failed to take all reasonable steps to se-cure compliance by Century Merchant Bank Limited (now in Liquidation) with the requirement of section 20(2)(a)(ii) and (iii) of the Banks and Other Finan-cial Institutions Decree No. 25 of 1991 as amended, in that Century Merchant Bank Limited (now in Liq-uidation), without prior approval in writing of the Central Bank of Nigeria (“CBN”), you permitted to be outstanding unsecured advances or loan or an ag-gregate and in excess of N50,000, to wit: N52,985,000 as at 30 June, 1997, in favour of Cen-tury Warehouses Limited, a private Company of which you were at all material time a Director and thereby committed an offence punishable under sec-tion 46(a) of the Banks and Other Financial Institu-tions Decree No. 25 of 1991 (as amended).

The above charge was read to the accused and he pleaded not guilty to all 3 counts. Thereafter Chief A.N. Anyamene, S.A.N. for the accused applied for his bail.

G. Esa learned Prosecutor representing the State was not opposed to this application for bail provided the provisions


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of section 26(2) of Decree No. 18 of 1994 as amended were met.

The Tribunal in its Ruling granted bail to the accused in these terms:– (1) That he shall deposit in this Tribunal the sum of

N26,492,500 (Twenty Six Million, Four Hundred and Ninety-Two Thousand, Five Hundred Naira) as security for his bail.

(2) He shall provide security for the balance of the amount; and

(3) He shall hand over his passport to this Tribunal until the case is disposed of.

(4) Until conditions 1–3 above are met, the accused shall be remanded at Enugu Prisons pending his trial.

Trial proceeded on that day and the prosecution called a witness. Thereafter he applied for an adjournment to call more witnesses. The case was then adjourned to the 4th and 5 February, 1999 for continuation.

When this Tribunal resumed sitting today, the 4 February, 1999, the Learned Prosecutor G. Esa, Esq., after the case was called, addressed this Tribunal as follows:–

“My Lord, the matter is set down for continuation this morning but the parties have met, had discussions and in the interest of justice we have done some discussions towards arriving at a plea bargain. Subject to the convenience of Court my Learned Senior will intro-duce the topic.”

Chief A.N. Anyamene, S.A.N. is the learned Senior referred to by the learned Prosecutor. The learned Senior Advocate who appeared battle ready for the case to continue appeared with a full house of legal practitioners. They are Chief C.A. Anozie, Mrs G.I. Emedike, Miss O. Ozigbo and O. Obi. All four lawyers were seated very firmly behind the learned Senior Advocate.

In the spirit of understanding as opposed to that of battle, the learned Senior Advocate in a most amiable manner in-troduced “the topic” in this form:–

“My Lord, the accused person will change his plea to guilty in re-spect of Counts 1 and 3. The prosecutor will withdraw Count 2 as


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we have exchanged documents. The accused is anxious to co-operate with the NDIC to sell the land at Lekki Peninsular, the Ti-tle Deed of which is in the possession of NDIC. The Valuation Report are consistent on the issue that the sum to be realised from that sale will cover the sum stated on the charge.”

In response to the submission of the learned Senior Advo-cate, the learned Prosecutor raised no objection to the appli-cation by the learned S.A.N. that the accused should change his plea. He thereafter applied to withdraw Count 2 of the charge.

This application to withdraw Count 2 of the charge was granted by the Tribunal and Count 2 was struck out.

Consequently, the accused was called upon, Counts 1 and 3 of the Charge read and explained to him all over again and he pleaded guilty to each of counts 1 and 3.

Upon a plea of guilty by the accused, the Tribunal then called on the prosecutor to present the facts of the case which I shall herein present verbatim:– Prosecutor:– “My Lord, the facts of this case in summary

is that the accused person was at all times material to the charge the Managing Director of Century Merchant Bank of Nigeria now in liquidation and also at the same time the Managing Director of the Company known as Century Warehousing Ltd which was in-corporated in September, 1989. By October, 1989, that is barely one month thereafter, un-secured loans in the amount in the charge were given to Century Warehouses Ltd con-trary to the rules, circulars and procedures of Century Merchant Bank Ltd.

On 23 January, 1991 the accused as Managing Director of Cen-tury Merchant Bank Ltd granted a loan of N12 Million to Century Warehouses Ltd contrary to the rules and regulations of the said bank and between 25 June, 1991 and December, 1993 the accused as Managing Director of Century Merchant Bank failed to take all reasonable steps to secure compliance by Century Merchant Bank Ltd the requirements of section 20(2)(a)(ii), (iii) of the Banks and Other Financial Institutions Decree, 1991 as amended; in that without prior approval in writing of the CBN the accused permit-ted to be outstanding unsecured advances or loan of an aggregate


Bozimo J


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and in excess of N50,000 as at 30 June, 1997 in favour of Century Warehouses Limited a private Company of which the accused was a Director. The above stated activities of the accused contributed in no small manner in causing the distress of the Century Merchant Bank within the meaning of Decree No. 18 as amended. The total sum involved is made up of N82,909,781.45k that is the principal and accrued interest. However, my Lord, the charge to which the accused pleaded guilty is N52,985,000.”

At the risk of repetition but for the purpose of actually iden-tifying the Counts now before this Tribunal, I will here again set out Counts 1 and 3 of the Charge. At these counts the ac-cused is charged as follows:– (1) That you Dr Ime Ekong Ebong of No. 16 Probyn

Road, Ikoyi, Lagos, Lagos State, on or about the 23 October, 1989 and 23 January, 1991, in Lagos, whilst being the Managing Director of Century Mer-chant Bank Limited (now in Liquidation) granted the sum of N14,500,000 loan to Century Warehouses Limited contrary to the regulations, circulars, rules and procedures laid down by Century Merchant Bank Limited (now in Liquidation) regarding the grant of credit facilities and loans and thereby com-mitted an offence punishable under section 12(2) of the Banking Act Cap 28 Laws of the Federation of Nigeria, 1990.

(3) That you Dr Ime Ekong Ebong of No. 16 Probyn Road, Ikoyi Lagos, Lagos State, whilst being the Man-aging Director and Chief Executive Officer of Century Merchant Bank Limited (now in liquidation) at Lagos between 25 June, 1991 and December, 1993, failed to take all reasonable steps to secure compliance by Cen-tury Merchant Bank Limited (now in Liquidation) with the requirement of section 20(2)(a)(ii), (iii) of the Banks and Other Financial Institutions Decree No. 25 of 1991 as amended, in that Century Merchant Bank Limited (now in liquidation), without prior approval in writing of the Central Bank of Nigeria (CBN), you permitted to be outstanding unsecured advances or


Bozimo J


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loan of an aggregate and in excess of N50,000, to wit: N52,985,000 as at 30 June, 1997, in favour of Century Warehouses Limited, a private Company of which you were at all material time a Director and thereby com-mitted an offence punishable under section 46(a) of the Banks and Other Financial Institutions Decree No. 25 of 1991 (as amended).

The accused has pleaded guilty to each of these Counts. To stretch the matter any further would mean embarking on unnecessary legal or academic exercise. It would also amount to flogging a dead horse. The accused is an edu-cated person, he perfectly understood the offences with which he is charged before he settled for a plea bargain. His attitude and that of his highly respected lawyer is highly commendable as their combined attitude has saved all con-cerned from the rigours of going into a full blown trial.

I must also commend the learned Prosecutor G. Esa, Esq., for his gentlemanly behaviour and his general attitude at en-suring that justice is done in the circumstances of this case.

In the light of the above, I find the accused person guilty on his own plea and upon the facts presented by the prose-cutor in respect of each of Counts 1 and 3 of the charge and convict him accordingly. Allocutus:– A.N. Anyamene S.A.N. – My Lord, the ac-

cused lies Prostrate before the Tribunal. He is at the mercy of the Tribunal. We are asking for utmost leniency on the follow-ing grounds:–

(1) He has been detained by the Police for 1½ years.

(2) Considering the offences charged, and considering the fact that there is no al-legation that he profited from the ad-vances, I urge court to hold that he committed an error of the head.

(3) The accused left the employment of Century Merchant bank in 1993.


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(4) These sums charged were not what they were in 1993 but interest swelled them up 4 years after he had left the bank.

(5) From the word go the accused as Man-aging Director has held to landed prop-erty of the Ware House and that prop-erty at all times was enough to cover the indebtedness. He never manifested any intention of the Bank losing any money.

(6) Count 3 includes the amount in Count 1. (7) I urge your Lordship to hold that pun-

ishment in Count 3 will include pun-ishment on Count 1.

The accused has always held high position in the banking Industry. He was the Managing Director/Chief Executive of ICON Ltd Merchant Bankers for 6 years from 1978–1984. He was also a Director of Research in the Federal Ministry of Finance 1976–77, and was a Director of African Devel-opment Bank at Abidjan from 1970–76. A Book he wrote is now a Standard Work for Merchant Banking.

The accused has passed his middle age. He is above 60 years. He has had sufficient agony for this error of the Head. I pray your Lordship in view of all the above to temper your sentence with utmost mercy. I pray the Tribunal to caution and discharge the accused. Prosecution:– “My Lord, to our knowledge there is no evi-

dence of previous conviction. Whatever sen-tence may be passed, we pray for consequen-tial order of the property No. 88/88/1992C at Page 88 Volume 1991 C dated 22 December, 1991 which covers an area of 8.846 hectares.”

Sentence In sentencing the accused, I shall now look at the provisions of the law under which he is charged. Under Count 1, he is charged under section 12(2) of the Banking Act Cap 28 Laws of the Federation of Nigeria, 1990. That section provides:– 12(2) “Every Manager or other officer, who contravenes or

fails to comply with any of the forgoing provisions of


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this section, shall be guilty of an offence and shall on conviction be liable to a fine of N10,000 or to impris-onment for a term not exceeding 3 years; and in addi-tion, any gains or benefits accruing to any person con-victed under this section by reason of such contraven-tion shall be forfeited to the Government of the Federa-tion, and the gains and benefits shall vest accordingly in that Government in such manner as the court may at its discretion direct.”

By Count 1 of the charge, the accused is said to have granted the sum of N14.5 Million loan to Century Ware-houses Ltd contrary to the regulations, circulars, rules and procedures laid down by Century Merchant Bank Ltd now in liquidation regarding the grant of the loan.

This act of the accused constitutes an offence under sec-tion 12(1) of the Banking Act for which he can be punished under section 12(2) of the same Act. I have already set the provisions of section 12(2) in this judgment. Count 3:–

By Count 3 the accused is charged with an offence punishable un-der section 46(a) of the Banks and other Financial Institutions De-cree No. 25 of 1991 (as amended). He is actually charged with failing to take all reasonable steps to secure compliance by Cen-tury Merchant Bank Ltd (now in liquidation) with the requirement of section 20(2)(a)(ii), (iii) of the Banks and Other Financial Insti-tutions Decree No. 25 of 1991 as amended in that Century Mer-chant Bank Ltd (now in liquidation) without prior approval in writing of the Central Bank of Nigeria (“CBN”) permitted to be outstanding unsecured advances or loan of an aggregate and in ex-cess of N50,000 to wit: N52,985,000 as at 30 June, 1997 in favour of Century Warehouses Ltd, a private Company of which he was at all material times a Director.

Section 46(a) of the Banks and Other Financial Institutions Decree No. 25 of 991 as amended which is the punishment section for the offence committed by the accused under Count 3 provides:–

“Any person, being a Director or Manager of a bank, who fails to:–

(a) take all reasonable steps to secure compliance by the bank with the requirement of this Decree:–


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is guilty of an offence and is liable on conviction to pay to the Bank a fine of N50,000 or imprisonment for a term of 3 years or to such fine and imprisonment.”

Whereas the accused is entitled to a fine of N10,000 or term of imprisonment not exceeding 3 years under section 12(2) of the Banking Act Cap 28 of 1990, section 46(a) of the Banks and Other Financial Institutions Decree No. 25 of 1991 as amended gives the Tribunal the discretion to impose fine on the accused and also to send him to a term of impris-onment not exceeding 3 years.

I have however, considered the very passionate plea of Chief A.N. Anyamene, S.A.N. for the accused. I have also taken into consideration the comments made by the learned Prosecutor.

It is in consequence of all of these that I make the follow-ing orders:– (1) That the accused is sentenced to a fine of N10,000 in

respect of Count 1 of the charge or in the alternative he shall go to jail for two years.

(2) In respect of Count 3 he is sentenced to a fine of N50,000 or in the alternative he shall go to jail for 2 years.

(3) The fines are cumulative, the sentences concurrent. (4) It is hereby further ordered, that the property of the

Century Warehouses Ltd at Lekki Peninsular, the Ti-tle Deeds of which is already in the possession of the NDIC which property is known as No. 88/88/1992C registered at page 88 Volume 1991C dated 22/12/91 covering an area of 8.846 hectares shall be confis-cated and forfeited to the Nigeria Deposit Insurance Corporation who is the Liquidator of the Century Merchant Bank.

(5) The said property shall be sold to recover the amount stated on the charge. The accused shall be informed of such sale and of the sum realised therefrom.

(6) The accused shall be free to introduce any cus-tomer/buyer to the NDIC who may be interested in the purchase of the land.


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Section 20(2) of Decree No. 18 of 1994 as amended pro-vides:–

“The Tribunal may order the confiscation of the property movable or immovable of a person convicted of an offence under this De-cree or any other enactment triable by the Tribunal of the value equal to the amount involved in the offence or of such value as the Tribunal may deem fair and just in the circumstances.”

In consequence of the above section, it is hereby ordered that in the event that the proceeds from the sale of the piece of land at Lekki Peninsular falls short of the sum of N52,985,000 stated in the charge, then upon application by the Prosecutor, the Tribunal shall order that the property of the accused movable or immovable be confiscated and sold to make up the short fall.

The above shall be the judgment of this Tribunal.

[1999] 9 N.B.L.R. (FEDERAL HIGH COURT, KADUNA DIVISION)

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A. Gyang v Central Bank of Nigeria, Kaduna and others

FEDERAL HIGH COURT, KADUNA DIVISION ADENIJI J Date of Judgment: 26 FEBRUARY, 1999 Suit No.: FHC/KD/CS/129/98

Banking – Banker and customer relationship – When exists Banking – Central Bank of Nigeria – Whether a proper party to this suit Banking – Jurisdiction – Federal High Court in relation to Banking matters – Scope – Section 230(1)(d) Constitution of Federal Republic of Nigeria, 1979 (as amended) Facts The plaintiff in this case did a job for Kaduna State Water Board which Board issued a Central Bank Cheque in the name of the plaintiff Company. The plaintiff then directed one John Thomas to collect the cheque on its behalf. The said John Thomas collected the cheque and disappeared into thin air. The said cheque which was crossed and made pay-able to payee (plaintiff) only was alleged to have been paid into the second defendant bank and cleared.

The plaintiff instituted an action in respect of the missing cheque before the Federal High Court whereupon the second defendant raised a preliminary objection to the suit contend-ing that the Federal high Court has no jurisdiction to enter-tain the suit and the suit should be transferred to the High Court on the grounds that:– 1. That the Central Bank of Nigeria is not a proper

party to this suit and was wrongly joined so that this suit can fall under section 230(1)(q), (r) and (s) of the 1979 Constitution (as amended).

2. That the case falls squarely within the proviso to sec-tion 230(1)(d) of the 1979 Constitution.

It was submitted on behalf of the plaintiff that the plaintiff is not a customer of Central Bank of Nigeria and Habib Bank



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hence no Banker/Customer relationship exists and that the case is entertainable by the Federal High Court of Nigeria.

Held – 1. For banker/customer relationship to come into play be-

tween a bank and another, the transaction involved ought to have been between that other person as a cus-tomer and the bank as its bank. In the instant case, no banker/customer relationship existed between the plain-tiff and the second defendant since the plaintiff’s allega-tion is that a crossed cheque issued in his name was wrongly paid through the second defendant.

2. By virtue of the proviso to section 230(1)(d) of the 1979 Constitution, any dispute between an individual cus-tomer and his bank in respect of transactions between the individual customer and the bank does not fall within the jurisdiction of the Federal High Court. In the instant case, since the plaintiff’s allegation was that a Central Bank crossed cheque issued in his name was wrongly cashed by one John Thomas through the second defendant Bank, it is clear that no banker/customer rela-tionship exists between plaintiff and defendants to oust the jurisdiction of the Federal High Court in the suit.

3. The Central Bank of Nigeria is a proper party in the suit since the cheque allegedly wrongly cleared was a Central Bank Cheque issued to the plaintiff for services rendered to Kaduna State Water Board. Thus the Central Bank of Nigeria had a role to play in this case in a dual capacity – firstly, as the owner of the cheque and secondly as a clearing house. The Federal High Court therefore has ju-risdiction to entertain the claim under section 230(1) of 1979 Constitution since it was an action against the Cen-tral Bank of Nigeria arising from Banking.

Objection overruled.


Nigerian Agu v Ikwibe (1991) 3 NWLR (Part 180) 385



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Anabaronye v Nwakaihe (1997) 1 SCNJ 161 Ijale v Leventis Co Ltd (1961) 1 All NLR 762 N.N.P.C. v Okor (1998) 1 NWLR (Part 559) 637

Nigerian statutes referred to in the judgment Constitution (Suspension and Modification) Decree No. 107 of 1993, section 230(1)(q), (r) and (s) Constitution of Federal Republic of Nigeria, 1979 (as amended), section 230(1)(d)

Counsel For the plaintiff: Mrs Linda Bala For the second defendant: Mr Sani

Judgment ADENIJI J: When this case came up on 21 January, 1999 the Counsel to the second defendant pointed to the preliminary objection raised by him as to the jurisdiction of the court to try the case. Learned Counsel asked to be allowed to go on with the objection filed.

Counsel for second defendant Mr Sani, submitted that this Court has no jurisdiction to try the matter which he claimed to be a banker/customer matter, not covered by Decree No. 107 of 1993, section 230(1)(q), (r) and (s) thereof. He in-formed the court that the plaintiff in the case did a job for Kaduna State Water Board which Board issued a Central Bank Cheque in the name of the plaintiff Company. The plaintiff then directed one John Thomas to collect the cheque on its behalf. The said John Thomas collected the cheque and disappeared into thin air.

Counsel submitted that the cheque was alleged to have been paid into Habib Bank (his Client) which is not an agency of the Federal Government. The Central Bank of Nigeria he said, was not a party to the transaction but was joined pur-posely to bring the matter within the ambit of section 230(1). He further submitted that any suit not touching upon the deci-sion or management of the Federal Government or its agency


Adeniji J


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could not fall within Decree No. 107 of 1993. The fact that the Central Bank of Nigeria is a Clearing House to all the Banks did not make it a party to the suit. Counsel was of the view that the proper court with power to entertain the suit was the State High Court and cited in support of his stand, the case of NNPC v Okor (1998) 1 NWLR (Part 559) page 637 paragraphs F–H. Counsel thereafter urged the court to transfer the suit to the State High Court.

In her reply, Mrs Bala for the plaintiff submitted that de-fence Counsel must have misconstrued the provisions of section 230(1)(q), (r) and (s) Decree No. 107 of 1993, giv-ing this Court the power to entertain any action on Banks and Other Financial Institutions, as between one Bank and another. Counsel added that the plaintiff had sued the Cen-tral Bank of Nigeria (Kaduna Branch) which case could only be tried in this Court. The Bank she said, is a necessary party to the suit and cited in support the case of Anabaronye v Nwakaihe (1997) 1 SCNJ page 161 at 162 ratio 3.

Counsel emphasised that the plaintiff was paid a CBN Cheque by the Kaduna State Water Board and the cheque has always been in the custody of the CBN, the first defen-dant in the case. Once a cheque was paid into an account such cheque would be sent, for clearing, to the particular Bank, in this case, the CBN Kaduna Branch. She explained that once the cheque was drawn, it would be lodged in the appropriate Bank, in this case Habib Bank. The cheque was then sent to the Central Bank, the Clearing House and in fact the owners of the cheque.

Counsel went further to state that the cheque for N100,000 (One Hundred Thousand Naira) was drawn in favour of the plaintiff company and endorsed specially ie crossed and made payable to payee only to wit Gyang Ventures.

According to her, the provision of section 230(1)(d) with regard to Banks and their customers did not apply as the plaintiff had no account with Habib Bank the second de-fendant. It could therefore not be a customer of Habib Bank. It also had no account with the Central Bank, Kaduna.


Adeniji J


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bank/customer relationship did not therefore exist. The plaintiff never knew the owner of the account into which the cheque was paid, in Habib Bank. Counsel then guessed that lodgement was effected through a special deal, which Habib Bank had a duty to explain.

Mrs Bala submitted further that Counsel for the second de-fendant was not appearing for the first defendant – Central Bank and could not speak for the Bank. The cheque she said, a Central Bank Cheque, a house cheque to the CBN which therefore was both the clearing and the owner of the cheque. Counsel concluded that in the circumstances of the case, court has jurisdiction to entertain the suit.

Mr Sani quickly retorted that even though the plaintiff was not a Habib Bank customer or a Central Bank customer, the CBN could still not be a party to the suit. Ruling in this case was thus reserved till 22 February, 1999 and further reserved till 26 February, 1999 ie today.

I have read the papers filed and have listened carefully to the submissions of Counsel. The issues at stake to my mind are:– 1. Whether or not this case falls within section

230(1)(q), (r) and (s) which gives the court jurisdic-tion to try matters concerning the Federal Govern-ment or its agencies.

2. The position of the plaintiff in this case, if it is one of bank/customer relationship and therefore caught by section 230(1)(d) of Decree No. 107 of 1993.

3. The position of the CBN, Kaduna, whether or not is a competent party to the suit.

4. How a crossed cheque payable to Gyang Ventures only, came to be lodged in an unknown account thus rousing the suspicion that it was lodged through a special deal, a matter fit for police investigation.

With regard to issue one above, a look at section 230(1)(q), (r) and (s) is helpful. Section 230(1)(q), (r) and (s) of Decree No. 107 of 1993 provides:–

“Section 230(1) Notwithstanding any thing to the contrary con-tained in the Constitution and in addition to such other jurisdiction


Adeniji J


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as may be conferred upon it by an Act of the National Assembly or a Decree, the Federal High Court shall have and exercise juris-diction to the exclusion of any other court in civil causes and mat-ters arising from:–

(a)–(p) . . .

(q) – the administration or the management and control of the Federal Government or any of its agencies.

(r) – subject to the provisions of the Constitution, the opera-tion and interpretation of this Constitution in so far as it affects the Federal Government or any of its agencies; and

(s) – any action or proceeding for a declaration or injunc-tion affecting the validity of any executive or adminis-trative action or decision by the Federal Government or any of its agencies.

Provided that nothing in the provisions of paragraph (q), (r) and (s) of this subsection shall prevent a person from seeking redress against the Federal Government or any of its agencies in action for damages, injunction or specific performance where the action is based on any enactment, law or equity.”

Section 230(1)(d):–

“Banking, banks, other financial institution including any action between one bank and another any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letter of credit, promissory note, and other fiscal measures. Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.” (Italics mine.)

At a glance therefore one would see that section 230(1) paragraph (d) above comes in handy. It confers jurisdiction on the Federal High Court in matters of banking, banks and in fact on matters touching on any action by or against the Central Bank of Nigeria arising from banking and other fis-cal measures. The operative words here are:–

“any action by or against the Central Bank of Nigeria arising from banking, etc and other fiscal measures.”


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The submission of Counsel to the plaintiff Mrs Linda Bala was that a cheque was drawn in favour of the plaintiff, her client, for the sum of N100,000 by the Kaduna State Water Board. The cheque was a Central Bank Cheque. This was lodged into Habib Bank by one John Thomas but into an ac-count unknown to the plaintiff. She believed that such was possible only through a deal between those concerned.

In his reply, however, the Counsel to the second defendant (Habib Bank Ltd) submitted that the matter was not within the frame of section 230(1) of Decree No. 107 of 1993 and that Counsel for the plaintiff intentionally brought in the Central Bank, in order to have cover under section 230(1) of the Decree No. 107 of 1993. Counsel was of the view that the matter fell squarely within the jurisdiction of the State High Court, because it was a bank/customer relationship.

I need to start with the first leg of Counsels argument. I am not convinced that the Central Bank was brought into the suit only as a ploy. The cheque issued was said to be a Central Bank Cheque and investigations were extended to the Central Bank. without any result. The cheque being that of the Cen-tral Bank, will have returned to the Bank as the Clearing House for all banks and in fact as the owner of the cheque. These facts I believe make the Central Bank relevant to the full and complete determination of all issue involved in this dispute. Section 230(1)(d) specifically confers jurisdiction on the Federal High Court in such matter as affect the Central Bank, hence the action is competent and it lies here. This Court therefore has jurisdiction to try the case.

The next issue to consider is Issue (2) above ie whether or not the position of bank/customer relationship exists be-tween the plaintiff and the bank. If such a relationship exist then it will he caught by the proviso to paragraph (d) of sec-tion 230(1) which bars this Court from hearing matters touching on bank/customer relationship.

The facts as contained in the affidavit filed are that the said John Thomas was instructed by the plaintiff to collect the cheque on its behalf. He collected same and lodged it in an account in Habib Bank ie the second defendant. He


Adeniji J


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thereafter disappeared. There is no averment whatsoever that the plaintiff was a customer to any of the banks at that time or that the amount on the cheque became a dispute be-tween the plaintiff and any bank by reason of any bank/customer transaction. What happened was that the cheque was merely lodged according to Counsel, in second defendant bank and no more.

All the plaintiff is asking for is the amount on the cheque. The cheque was said to be a crossed one payable only to the plaintiff hence the Habib Bank has an explanation to make as to how it came to pay such a crossed cheque without ref-erence to the plaintiff in whose name it was drawn, That therefore is not a bank/customer relationship but a challenge to a corporate body which the plaintiff believed was a facili-tator, an allegation which need to be proved any way. For bank/customer relationship to come into play, the transac-tion ought to have been between the plaintiff as a customer and the second defendant as its bank not through an outsider like, the third defendant John Thomas. The submission of Counsel is to the effect that the plaintiff was never a cus-tomer of the Central Bank or Habib Bank. That assertion has not been denied to date hence bank/customer relation-ship cannot be said to exist as of today. Paragraph (d) of section 230 subsection (1) of Decree No. 107 of 1993 will not therefore apply.

With regard to Issue (3) (supra) the mind of the court is al-ready made clear in the courts views on issue one above. ie that the Central Bank being the Clearing House as well as the owner of the cheque (which would eventually be in its custody) is a competent party. The law is that the court has to handle matters in such a way as to decide all issues once and for all the time, to avoid multiplicity of actions. It was therefore proper to bring the Central Bank into the matter. In any case it is in the interest of the public that an end be put to litigation. It is necessary therefore to dispose of cases and for all in order that one law suit may not arise out of an-other. (See the case of:– 1. Ijale v Leventis Co Ltd (1961) 1 All NLR 762.


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2. Agu v Ikwibe (1991) 3 NWLR (Part 180) 385 at 412.)

The maxim is “interest Republicae sit finis litium”. The guess of Mrs Bala that the lodgement of the cheque in

question was made possible only through a special deal may or may not be well founded but she has a reason to be suspi-cious. The cheque being a crossed one was payable only to the plaintiff. How the said John Thomas was able to lodge same in an account in Habib Bank, remains a mystery which only the police can unravel. That is if the plaintiff is inter-ested in going into the criminal aspect of matter.

In that case a report of the matter to the police will be ap-propriate. As earlier on indicated, that does not prevent this case from proceeding since the case here is just to ensure that the rightful person or payee is paid the sum due to it.

In conclusion I am of the firm view that this action is cov-ered by the provision of Decree No. 107 of 1993 specifically section 230(1)(d) of same. The objection is therefore over-ruled.



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Federal Republic of Nigeria v Mr Festus Agboola and another

FAILED BANKS TRIBUNAL, ZONE V, LAGOS AUGIE J Date of Judgment: 2 MARCH, 1999 Suit No.: FBFMT/L/ZV/06C/97

Banking – Offences – Manager granting credit facilities not in accordance with rules and regulations of the bank – Sec-tion 18(1)(b) and (2) Banks and Other Financial Institutions Decree No. 25 of 1991 – Ingredients of offence Banking – Offences – Manager of bank charged with grant-ing unauthorised credit of a certain sum of money – Bank earlier on had sued in the State High Court the holder of account for the sum of money stated in the charge stating that the credit was mutually agreed upon – Whether charge not vitiated Criminal law and procedure – Conspiracy – Principles ap-plicable Dishonoured Cheques – Section 1(1)(b) Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990 – No evidence that withdrawal was made from account into which cheque was paid – Whether charge established Words and Phrases – Loan, advances, credit Facts The accused persons were charged for the following of-fences:– “(i) Count 1 – The grant of unsecured and unauthorised credit

facilities to a customer of Trade Bank in contravention of the rules and regulations of the said bank, an offence con-trary to section 18(1)(b) of the Banks and Other Financial Institutions Decree No. 25 of 1991 (‘BOFID’) and punish-able under section 18(2) of the same Decree;

(ii) Count 2 – Obtaining credit from Trade Bank with a cheque which when presented was dishonoured on the ground that no funds or insufficient funds were outstanding to the credit


Federal Republic of Nigeria v. Mr Festus Agboola 241

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of the drawer of the cheque, an offence contrary to section 1(1)(b) of the Dishonoured Cheques (Offences) Act 1990;

(iii) Count 3 – Conspiracy to fraudulently grant credit facilities without lawful authority and any security or collateral in contravention of the Bank’s rules and regulations, an of-fence punishable under section 516 of the Criminal Code;

(iv) Count 4 – Stealing the property of Trade Bank, an offence punishable under section 390(9) of the Criminal Code.”

The prosecution led evidence to show the grant of unauthor-ised facilities.

The defence however, produced evidence to counter the al-legations of the prosecution by producing some documents.

Finally they tendered a statement of claim made by the Bank in an action instituted at the Lagos High Court against the second accused claiming the sum of money which was alleged by the same bank before the Tribunal as irregularly granted.

As to the charge of issuing dud cheque, the defence alleged that they did not obtain any credit by means of the cheque since no withdrawal was made from the account into which it was paid. Held – 1. To prove the allegations in Count 1 of the amended

charge, the prosecution must establish:– (a) that the first accused person was the Manager at the

Docemo Branch of Trade Bank between the 7 June, 1993 and 31 July, 1993;

(b) that he granted credit facilities which were unau-thorised;

(c) the aforesaid credit facility was unsecured. 2. Per curiam “There is evidence on exhibit K2 that Olalomi Holdings

accepted the offer with the conditions. There is no evidence in exhibit M, the statement of account of Olalomi Holdings with Trade Bank, of the withdrawal of a lump sum of N500,000 from the account. Counsel for the first accused person is correct that there is no 31 April, as the month ends with the 30th, and I also agree with him that it does not



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make sense that a facility offered by a bank to a customer on the 28 April will be expected to expire two days later.

I am of the view that looking at the definition of the words, ‘Revolving Credit’, ‘Revolving Fund’ and ‘Revolving Loan’, and the use of the words ‘The facilities will expire on 31 April, to be renewed before the date’, the interpreta-tion that should be given to exhibit K2 is that if the facili-ties are not used within 6 months from the 28 April, 1993, the offer by the bank will have lapsed. To give it any other interpretation will be ridiculous, as it is not possible for an offer to be accepted by the customer, the facilities utilised and renewed before the 30 April, a mere two days after the offer letter was written and communicated to Olalomi Holdings. I accept the explanation of the first accused and hold that the prosecution has failed to prove that the first accused person had no authority to grant the said sum of N350,000 facility.”

3. Per curiam “The first accused also tendered exhibit AG–D, the letter

written to the second accused person by his superior officer, Mr B.O. Mohammed, Head of Southern Operations, part of which reads ‘We wish to express our displeasure about the way you are handling the settlements of debts which was mutually arranged to last a maximum period of only 30 days in July, 1993. It is regrettable that you could not justify the confidence we repose in your goodself before granting you the credit facilities especially as we now realise your words are no longer your bonds’. To my mind, the use of the words ‘was mutually arranged’ corroborates the defence of the first accused person that the bank was aware of the overdraft fa-cilities granted to Olalomi Holdings. In addition to this, a copy of a Ruling by a Lagos State High Court is in evidence as exhibit G–D, and the paragraphs of an affidavit sworn by Trade Bank reads thus:–

8. That on or about the 30 June, 1993 the first defendant applied to and was granted by the plaintiff an overdraft via Trade Bank Nigeria (Obun Eko Branch) cheque no 064499 in the sum of N2,500,000 only.

9. That on or about the 12 July, 1993, the first defendant drew on the Account No. 07-37-0027701 the cheque referred to in paragraph 8 above the same having gone through clearance – A copy of the statement of ac-count for this period is hereby attached and marked as exhibit D.



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10. That the second defendant/respondent guaranteed the indebtedness of the first defendant/respondent to the plaintiff/applicant failing which the said second defen-dant/respondent shall personally repay the outstanding debt of the first defendant/respondent. A copy of the continuing Deed of Guarantee executed by the second defendant/respondent in favour of the plaintiff/applicant is attached hereto and marked as exhibit E.

11. That as further security for the indebtedness of the first defendant/respondent to the plaintiff/applicant the sec-ond respondent/ respondent pledged his property at 19/21 Achabi Shomuyi Street, Ijeshatedo, Lagos with Certificate of Occupancy No. 8/8/1991C at the Lands Registry Lagos to the plaintiff/applicant under the agreement signed between the plaintiff/applicant and the first defendant on 16 September, 1993 which is hereby attached and is marked as exhibit F.

The parties before the Lagos State High Court in the above case are – Trade Bank Plc v Olalomi International Holdings and Alhaji Abdulwahab Olaitan (the second accused person in this case). Exhibit M is the statement of account of Olalomi Holdings with Trade Bank, the account number is 07-37-0027701-07 same as referred to in paragraph 9 above. There is a debit entry in exhibit M for the sum of N2,500,000 on the 12 July, 1993, the same date referred to in paragraph 9 above. Exhibit N is a copy of two cheques for N2.5 Million and N350,000 the number of the cheque for N2.5 Million is 064499, the same as the cheque number referred to in para-graph 8 above. The details of the security in exhibit K2 are Legal Mortgage over landed property plus Certificate of Oc-cupancy title No. 8/8/1991C, the same Certificate of Occu-pancy referred to in paragraph 11 above. The term ‘equity’ denotes the spirit and habit of fairness, justness, and right deal-ing which would regulate the intercourse of men with men. It is justice administered according to fairness as contrasted with the strictly formulated rules of common law. (See Black’s Law Dictionary, (6ed)). It goes without saying that equity demands that Trade Bank cannot approbate and reprobate at the same time, as Mr Adeniji rightly submitted. Trade Bank cannot swear to averments in an affidavit before a High Court admit-ting that Olalomi Holdings got clearance for the facility of N2.5 Million and then come to this Tribunal to give evidence that the facility was granted to Olalomi Holdings by the first accused person without lawful authority against the rules and regulations of the bank”.



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4. The prosecution must prove the following to ground a conviction for conspiracy:–

(1) that there was an agreement between the persons charged; and

(2) that the agreement was to commit an unlawful act or to commit a lawful act by unlawful means.

5. It is settled law that it is open to the trial Judge to infer conspiracy from the fact of doing things towards a common end by the execution of a planned and pre-meditated common intention and a common purpose, because the crime of conspiracy is usually hatched with utmost secrecy and the law recognises the fact that in such a situation, it might not always be easy to lead di-rect and distinct evidence, and the conspirators need not know themselves and need not to have agreed to commit the offence at the same time.

6. Per curiam “On this issue, I agree with Miss Onyeama that the defence

of the first accused person lacks merit for the following rea-sons:–

(1) Exhibit M shows that before the cheque was lodged in, the balance in the account was N2,951,644.66 debit. After the unauthorised direct credit was given to the UTB cheque the balance on the account came to N98,355.34 credit balance, and the credit was given to the cheque on the same day it was lodged.

(2) Even if he had discretionary lending limits as he claimed to justify his action. The UTB cheque was credited on the 30 July, 1993 after the discretionary lending limit was withdrawn through exhibit T–D which reads – ‘In view of the funding position of the Bank, your discre-tionary lending power is hereby suspended with effect from 19 July, 1993 until further notice’.

(3) The mere fact that a banking practice is unlawful does not make it any less illegal. As I stated in the case of FRN v Patrick Eze and 4 others (1998) 4 F.B.TLR 59:–

‘The defence of the third accused, from her statements to the Police and her evidence before the Tribunal, would appear to be, that it was the practice she met in



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the branch and since there was no query on it from the Head Office, she also adopted it. But that is inexcus-able, adopting an illegal practice does not make it any less illegal and will not exonerate her from criminal li-ability. I did say in the case of FRN v Ugwuadu and others (1998) 2 F.B.TLR ‘an illegality remains an ille-gality and no amount of banking practice will make it lawful’.

. . . In the instant case, I am therefore satisfied that the

prosecution has established a case of conspiracy against the first and second accused persons. Conse-quently, I find the first and second accused persons guilty of the offence of conspiracy to issue, sign and present a dud UTB cheque for N3,050,000 which was directly credited into the account of Olalomi Holdings with Trade Bank to give to the bank a false credit bal-ance of N6,280,30 and convict them accordingly.”

7. The instant charge must fail because the evidence before the Tribunal was that no withdrawal was made as a re-sult of the direct credit of the UTB Cheque of N3,050,000 into the account of Olalomi Holdings, so the second accused person could not have obtained credit for himself or any other person.

8. Per curiam “The first accused person was charged in Count 2 with

granting various unsecured and unauthorised credits facili-ties to Olalomi Holdings in the total sum of N2,850,000 in contravention of the rules and regulations of Trade Bank. The findings of the Tribunal earlier on in this judgment is that the granting of the credit facilities could not be said to be unsecured and unauthorised as the explanation of the first accused was accepted. This charge in Count 2 also fails and the first accused person is accordingly discharged and acquitted.

The first and second accused persons are also charged in Counts 4 and 5 with the offences of conspiracy to steal and the stealing of the said N2,850,000 mentioned in Count 2 of the charge. Since that charge failed, the allegations in Counts 4 and 5 consequently fail as well and the first and second accused are accordingly discharged and acquitted.”

Convicting and acquitting in part.



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Nigerian Atano v The State (1988) 2 NWLR (Part 75) 201 Clark v The State (1986) 4 NWLR (Part 35) 381 Erim v The State (1994) 5 NWLR (Part 346) 522 Gbadamosi v The State (1991) 6 NWLR (Part 196) 182 Ifegwu v FRN (1997) 1 F.B.TLR 86 Ikemson v The State (1989) 3 NWLR (Part 110) 455 Njovens v The State (1973) NSCC 257

Nigerian statutes referred to in the judgment Banks and Other Financial Institutions Decree No. 25 of 1991, sections 18(1)(b), 18(2) Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990, section 1(1)(b)

Book referred to in the judgment Black’s Law Dictionary (6ed)

Counsel For the prosecution: Miss Onyeama For the first accused: Mr Adeniji For the second accused: Mr Olekanama

Judgment AUGIE J: The accused persons, Festus Agboola, and Alhaji Abdulwahab Olaitan were initially arraigned before this Tri-bunal with two others on a 5 count charge and they pleaded not guilty to the respective counts against them. Thereafter, the prosecution was granted leave to amend/alter/withdraw the charge and replace it with a new 4 count charge against the first and second accused persons only as the charge against the other accused person, Mallam Musa Ado Sani and Haresh K. Karamechandani were dropped and they were discharged by the Tribunal. The new charge against


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the first and second accused persons to which they pleaded not guilty to the following alleged offences:– “(i) Count 1 – The grant of unsecured and unauthorised credit

facilities to a customer of Trade Bank in contravention of the rules and regulations of the said bank, an offence con-trary to section 18(1)(b) of the Banks and Other Financial Institutions Decree No. 25 of 1991 (‘BOFID’) and punish-able under section 18(2) of the same Decree;

(ii) Count 2 – Obtaining credit from Trade Bank with a cheque which when presented was dishonoured on the ground that no funds or insufficient funds were outstanding to the credit of the drawer of the cheque, an offence contrary to section 1(1)(b) of the Dishonoured Cheques (Offences) Act 1990;

(iii) Count 3 – Conspiracy to fraudulently grant credit facilities without lawful authority and any security or collateral in contravention of the Bank’s rules and regulations, an of-fence punishable under section 516 of the Criminal Code;

(iv) Count 4 – Stealing the property of Trade Bank, an offence punishable under section 390(9) of the Criminal Code Act.”

To prove their case, four witnesses testified for the prosecu-tion and tendered a number of documents. At the close of the case of the prosecution and before defence, the prosecu-tion was again granted leave to amend/alter the charge. In addition to some alterations, a new count of conspiracy to steal was added to the charge and the first and second ac-cused persons again pleaded not guilty to the respective counts against them in the amended 5 Count charge. There-after, PW4 was recalled for further cross-examination and PW1 recalled to tender documents. In the case of the de-fence, only the first accused person gave evidence as DW1, the second accused person rested his case on that of the first accused person. Written addresses were ordered, filed and served and later adopted by learned Counsel for the prosecu-tion and the accused persons.

The case against the accused persons as presented by the prosecution is as follows – The first prosecution witness, Mohammed Taofik Abdulrazaq, is the Company Secretary and Legal Adviser to Trade Bank. The copies of Incorpora-tion and Banking Licence of Trade Bank were admitted in evidence through him as exhibits A1 and A2 respectively.


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He gave evidence that it was not possible for any facility to be granted without his office knowing about it, because his office was in charge of its perfection if a security is in-volved, and that any transaction that does not involve his office means that the credit facility was granted without se-curity. He further testified that no security was perfected by his office involving Olalomi Holdings Ltd, and that the credit facility of N2.85 Million was not secured to his knowledge, neither was there any collateral or mortgage used to secure the said facility of N2.85 Million.

During cross-examination by Mr Adeniji, learned Counsel for the first accused person, the following documents were admitted in evidence through PW1 – a guarantee dated 12 July, 1993 as exhibit B–D; a certified true copy of a loan agreement of 6 September, 1993 as exhibit C–D; a letter from Adeogun, Sakar and Associates to the MD, Olalomi Holdings dated 2 June, 1995 as exhibit D–D; two writs of summons and statement of claim dated 19 June, 1995 and 10 November, 1995 as exhibit E1–D and E2–D respec-tively; the prosecution’s proof of evidence filed on the 5 February, 1998 as exhibit F–D; and a certified true copy of a Ruling by a Lagos Stage High Court dated 24 February, 1993 as exhibit G–D. During cross-examination by Mr Fa-lana, learned Counsel for the second accused person, a statement of account in respect of Olalomi International Holdings and a letter dated 22 November, 1994, titled “Re:– Request for Interest Waiver” were admitted in evidence through PW1 as exhibits H–D and I–D respectively.

PW2 is Mannam Manzuma Tsoda Mamman, the DGM Banking Operations with the Trade Bank. He identified the first accused person as the Manager of the Dosunmu Branch of Trade Bank and the second accused person as the opera-tor of the account of a company called Olalomi International Holding Ltd, a customer of the bank. He gave evidence that in the months of June and July, 1993 the bank became aware of certain irregular and unauthorised grant of credit facilities on the account of Olalomi Holdings while going through one of the Reports prepared by the Dosunmu


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Branch of the Bank. The following documents were admit-ted in evidence through PW2 – A printout of accounts for debit dated 5 August, 1993 as exhibit J; An application for N1 Million dated 7 October, 1992 and the Approval for N500,000 dated 28 April, 1993 as exhibits K1 and K2 re-spectively; An application for the opening of a corporate current account dated 5 October, 1990, a document titled Appointment of corporate current account dated 5 October, 1990, a Board Resolution dated 15 October, 1992, a Board Resolution dated 5 October, 1990, a Form C.O.7. and a Cer-tificate of Incorporation of Olalomi International Holdings as exhibits L1 to L7 respectively; the Statement of Account of Olalomi Holdings as exhibit M; A copy of two cheques for N2.5 Million and N350,000 as exhibit N; A copy of a UTB cheque for N3,050,000 dated 30 July, 1993 as exhibit O; A Manual of Procedure for Trade Bank as exhibit P. A letter of complaint to the NDIC dated 29 March, 1990 as ex-hibit Q; An application for a letter of Guarantee dated 1 June, 1993, the Guarantee dated 13 July, 1993, a Letter dated 29 July, 1993 and titled “Banking Facilities” as exhib-its R1 to R3 respectively.

During cross-examination by Mr Adeniji, a copy of a UTB cheque for N3,050,000 dated 30 July, 1993, a Letter dated 17 July, 1993 titled “Discretionary Lending Power,” and a letter dated 26 November, 1997 from NDIC to Nnnena On-yeama were admitted in evidence through PW2 as exhibits S–D, T–D, and U–D respectively.

Charles Onyekwere Nwosu, the Branch Manager of Idumota Branch of UTB gave evidence as PW3 and identi-fied First Union Industries (Nigeria) Ltd, as customer who maintained a current account with the branch. The docu-ments used to open the account ie A signature card (photo-copy), Memorandums and Articles of Association, Certifi-cates of Incorporation, particulars of directors and of any changes therein, a Form C.O.7 were admitted in evidence through him as exhibits V1 to V4 respectively. A computer printout of the Statement of Account of First Union Indus-tries (Nigeria) Ltd, with UTB Idumota Branch was admitted as exhibit W.


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The IPO, Victor Oni, a Supt. of Police testified as PW4. He gave evidence of his investigation of the case. A letter of complain from NDIC to the DIG FIIB Alagbon Close, dated 27 August, 1996 was admitted through him as exhibit X; the statement of the first accused person to the police as exhibit Y; the statement of the second accused person to the police as exhibit Z and the attached annexures as exhibit Z1 to Z16 respectively; The Police Investigation Report dated 23 Janu-ary, 1997 as exhibit AB. When PW4 was recalled for further cross-examination, he gave evidence of his investigations in the Idumota Branch of UTB. PW1 when recalled merely tendered a subpoena duces tecum dated 5 August, 1998 and the minutes of Management Committee Meetings between January, 1992 to January, 1994 admitted in evidence through him as exhibits AC–D and AD–D respectively.

In the case of the defence, only the first accused person tes-tified as DW1, and the second accused person rested his own defence on that of the first accused person. The following documents were admitted in evidence through DW2 – The copy of a letter dated 10 January, 1996 and titled “Summary Dismissal” and a Copy of a letter dated 29 January, 1996 and titled “Re:– Summary Dismissal: as exhibits AE1–D and AE2–D respectively; A memo dated 3 November, 1993 with the minutes of Management Committee meeting held on Monday, 25 October, 1993 which is part of the file, exhibit A–D, as exhibit AD–D; A letter dated 7 January, 1994 titled “Re-Outstanding Debit Balance” as exhibit AG–D.

Other exhibits admitted through DW1 are – a letter to the Manager, Trade Bank dated 4 October, 1993 and titled “Re-our Outstanding Debit Balance with your Bank” as exhibit AH–D; The minutes of meeting dated 26 January, 1992 as exhibit AI–D; The minutes of meetings dated 2 December, 1992 and 8 January, 1993 as exhibit AJ1–D and AJ2–D; The minutes of meetings dated 29 March, 1993, 7 July, 1993 and 13 August, 1993 as exhibits AK1–D to AK3–D; A letter of transfer dated 17 February, 1993 as exhibit AL–D; An extract of payments made into the current account of Olalomi International Holdings as exhibit AM–D.


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During cross-examination by the prosecution, the follow-ing documents were admitted in evidence through DW1 – A letter dated 16 July, 1993 from Triumph Merchant Bank to the MD, Olalomi Holdings as exhibit AN–P; A letter from Olalomi International Holdings to the Manager, Trade Bank dated 19 July, 1993 and a Letter from Trade Bank to the MD, Olalomi Holdings dated 28 September, 1993 as exhib-its A01–P and A02–P respectively; A query dated 26 July, 1995 as exhibit AP–P; A reply to a query dated 4 August, 1995 as exhibit AQ–P; An invitation to appear before a dis-ciplinary Committee dated 22 August, 1995 and a reply to a query dated 10 July, 1995 as exhibit AR1–P and AR2–P re-spectively; A letter of suspension dated 6/1/94 as exhibit AS–P; A copy of the cheque for one Million Naira as exhibit AT–P.

In his address on behalf of the first accused person, Mr A.A. Adeniji submitted that the issues for determination by the Tribunal are whether:– (a) The credit facilities totalling N2,850,000 granted by

the first accused person as Manager of the Docemo Branch of Trade Bank was unauthorised.

(b) The aforesaid credit facility was unsecured. (c) There was any conspiracy between the first and sec-

ond accused persons to steal the aforesaid sum. (d) The first accused actually stole the said sum. (e) The alleged sum of N2,850,000 has been recovered

or not. He also argued that once issues (a) and (b) are answered in the affirmative ie shown to be authorised and secured, then issues (c) and (d) cannot hold, therefore charges 4 and 5 should be struck out. I agree with Mr Adeniji, to my mind the determination of issues (a) and (b) is the key to the other doors in this case. Let us now examine the case for the prosecution on these issues. PW1, the Company Secretary, explained that perfection of securities means that when fa-cilities are granted in the bank in form of loans and ad-vances, the respective branch or department which has


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granted the facility would forward to him, the letter of offer and acceptance by the customer for the perfection of any security which may have been taken for the advance, and he would then instruct external solicitors to perfect and secure the securities for the banks, and they monitor the external solicitor up till completion of the assignment. He stated categorically that no security was perfected by his office in-volving Olalomi Holdings and that the credit facility of N2.85 Million was not secured to his knowledge, that there was no collateral or mortgage used to secure the facility of N2.85 Million as contained in the charge. During cross-examination by Mr Adeniji, PW1 replied:–

“About 1993, I have some recollections about dealing with Olalomi Holdings. I remember that they applied for a guarantee to be given to another bank on their behalf. It was for the Triumph Merchant Bank. The guarantee was given to Triumph Merchant (exhibit B–D). I believe that there was another facility granted to Olalomi Holdings. He was granted a facility of about N500,000 (exhibit C–D). There was security in respect of that transaction. Normally banks take securities for whatever facility is granted. The N500,000 facility, I do not have the exact recollection of the security used to secure the advance of N500,000, but I believe some property of the second accused person was used to secure the Guarantee. I do not agree that securities were furnished for the facility granted. When the facility is granted a customer, the letter of offer and acceptance is sent to my office and it is from there that I would be able to determine whether security was granted for a facility or not. However, some times customers do deposit title documents which they may sometimes use as security when the facility is granted and approved. Most times, it is to enable the bank conduct a search as to the acceptance of that particular secu-rity if there are no encumbrances.”

PW2 who is the DGM, Banking Operations in the bank, ex-plained the procedure entailed before a customer can enjoy a credit facility which is approved and authorised. The cus-tomer must apply for the credit facility in writing. This writ-ten application must be considered by the bank through its officers or the bodies that have the authorities to do so. When it is approved, such approval will be conveyed to the customer in writing on the Bank’s letter headed paper. He added that this procedure was followed in the case of the


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overdraft facility of N500,000 granted to Olalomi Holdings, that there was an application for N1 Million overdraft, the application went through the due process in the bank at the end of which only N500,000 was approved. Exhibit K1, ti-tled “Application for N1 Million Overdraft Revolving Facil-ity A/C Olalomi International Holdings Ltd” reads as fol-lows:–

“We wish to sincerely apply for normal facility of N1Million overdraft facility to enable us enhance our working capital for one year renewable thereafter. The company is owned by Nigerians with foreign technical partners. The normal business is interna-tional trading. Here in Docemo market, we are renown importer in large quantity of containers. This is evidenced in our attached shipping documents of items that are fast moving in the market. The facility requested for, will seriously boost our operation and serve as substantial part of stand by revenue for your bank equally. In the light of our sincere request, we are proposing a collateral se-curity of our MD’s landed property of title C of O. No. 8/8/1991 with your bank presently valued at N2Million. Co-equally with unlimited personal Guarantee of our directors. As you are aware, we are ready to comply with any normal conditions which from our present short accommodations being enjoyed is apparent with your bank. We are comfortable to pledge our undenting integrity as we have been doing. As the facility is required for normal busi-ness, we look forward to your normal unbending co-operation with your good customers. While we await you for your expected co-operation, kindly treat as urgent. In addition to our attached ship-ping documents, we enclose herewith valuation Report and Au-dited Accounts (3 years) 1989, 1990 and 1991 and also projected cash flow.”

Exhibit K2 dated 28 April, 1993 and addressed to the MD, Olalomi Holding reads:–

“With reference to your request of 7 September, 1992 we are pleased to inform you that the bank is prepared to make available the undermentioned Banking facilities subject to the following terms and conditions:–

Amount:– Overdraft: N500,000. Purpose:– To augment your working capital. Repayment:– Domiciliation of sale proceed with the bank. The

overdraft is subject to the usual banking terms and conditions for repayment on demand and may be cancelled by the bank without prior notice.


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Expiry:– The facilities will expire on 31 April, to be re-newed before the date.

Interest and Commission Security:– The facilities will be secured by:– (1) Legal Mortgage over landed property plus C of

O title No. 8/8/1991C. (2) Personal Guarantee of each of the Company’s

Directors. Special Conditions:–

(1) Customer to sign our individual undertaking to give Legal Mortgage.

(2) Personal Guarantee of each of the Company’s Directors.

Conditions Prior to Utilisation:– The facilities will not be made available until the following has been received:–

(a) Board Resolutions approving the facility and security of-fered.

(b) Your acceptance of this offer within 30 days from the date of the letter.

(c) Title documents and all other documents to enable us per-fect the security shown above.

If the above facilities are not utilised within 6 months hereof, we shall consider this offer to have lapsed and will not be committed to providing the funds as aforesaid. Without prejudice to the fore-going, please note that the bank reserves the right to vary/alter and amend any of the terms and conditions stated above anytime should the need arises for us to do so. Please signify your agree-ment and acceptance of the banking facilities by signing and re-turning to us the attached copy of this letter prepared for that pur-pose.”

PW2 also explained that the operator of an account means that the person is a signatory to the account. He further testi-fied that the second accused operated the account of Olalomi Holdings at the Docemo Branch of the Trade Bank which is one of the branches of the bank that he oversees. He gave details of the procedure used in opening a current account for a limited liability company. The documents used in opening the account of Olalomi Holdings are in evi-dence as exhibits L1 to L6, and one of the signatories to the account is the second accused person who solely operated the account between the 7 June, 1993 and 31 July, 1993.


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Looking at exhibit M which is the statement of account of Olalomi Holdings, PW2 testified as follows:–

“We discovered unauthorised credit facilities, page 2 of exhibit M shows that on the 12 July, 1993 an unauthorised and irregular over-draft facility of N2.5 Million was granted on the account by the first accused person to Olalomi Holdings. It was granted by the first ac-cused authorising the payment of a cheque of the same sum – N2.5 Million on the account of Olalomi Holdings when they did not have the funds in the account. Before this unauthorised credit facility of N2.5 Million was allowed by the first accused person the balance on the account of Olalomi Holdings was N59,133.40 debit balance. From exhibit M, on the 16 July, 1993 another unauthorised over-draft facility of N350,000 was also granted to Olalomi Holdings by the first accused person by his approving the payment of a cheque in the same sum and drawn on the account of Olalomi Holdings. Be-fore the N350,000 was granted by the first accused person, the bal-ance standing on the account of the company was N2,598,379.91 debit balance. As at that time there was insufficient funds to warrant the drawing of N350,000. The facility were granted by virtue of cheques (exhibit N). The cheques were drawn by the second ac-cused person and was authorised for payment by the first accused. The second accused person signed the cheques. The first cheque is for N2.5 Million and the second cheque is for N350,000. To my knowledge, the sums granted through these cheques were unse-cured. What I mean by unauthorised is that the first accused person had no powers to grant such credit facility. He had no power to grant any credit facility. When an accounts is in debit the customer can draw from the account if the customer applies for it in writing and the bank approves a credit tune for that customer. There was no such approval for the N2.5 Million and N350,000. Exhibit M as at 30 July, 1993 there was a credit lodgment into the account of Olalomi Holdings to the tune of N3,050,000. There was a cheque that was paid into this account which was drawn on UTB. Docemo Branch which was granted an unauthorised direct credit facility by the first accused person and the proceeds of this cheque was then used to credit the account on the same day. I must add that the granting of this direct credit to the UTB cheque in the sum of N3,050,000 was irregular in the sense that the usual clearing rules were not followed by the first accused and unauthorised because the first accused did not have the authority to grant any credit facilities. Before exhibit O (UTB cheque for N3,050,000) was lodged in, the balance on exhibit M was N2,951,644.66 debit. After the unauthor-ised direct credit was given to the UTB cheque, the balance on the account of Olalomi Holdings came to N98,355.34 credit balance. The credit was given to the cheque on the same day it was lodged.”


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PW2 further explained that the clearing rules in Nigeria are that when you pay a cheque drawn on a different bank, into another bank, either in the same town or outside the state, the rule says that the bank collecting the money must wait for a number of working days before the account into which the cheque is lodged is credited with the value of the cheque, that this waiting working day is to enable the other bank on which the cheque is drawn to return it to the col-lecting bank in case the account on which the cheque is drawn does not have sufficient funds or for any other rea-sons, and that if there are no sufficient funds, the cheque is returned to the bank which presented it for payment, and the presenting bank is also required to immediately return the cheque to the customer into whose account it was lodged.

He also testified that the transaction in question was a lo-cal clearing system, located in Lagos and the rules require 3 working days but between the 7 June and the 31 July, 1993 the clearing days required were five. Furthermore, that the first accused person did not wait for any clearing days as he credited the account the same day, the cheque was lodged, and subsequently, exhibit O was returned unpaid since the cheque was dishonoured by UTB. He further explained the situation in the following words:–

“At the end of the month, branches render reports in the printout of all the accounts at the branch that were having debit balances at the end of the month. At the end of July, 1993 by this direct credit, the account of Olalomi Holdings was made to give to the bank a false credit balance of N6,280.30. However, after the cheque was returned unpaid by UTB, the account of Olalomi Holdings had to be debited back with the sum of N3,050,000 which was the value earlier credited. The intention of that action was that from practice we had come to realise that some branch Managers were in the habit of trying to cover up the balances in the account of custom-ers to which they had allowed irregular and unauthorised credit facilities. What transpired on this account towards the end of July, 1993 was that a confirmation of this practice in this particular case, the account on which the UTB account was drawn was also operated by the same second accused person. They should have been aware that the account at UTB from which he drew the cheque had no sufficient funds.”


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The case for the prosecution is also encapsulated in exhibit Q, the letter of complaint to the NDIC admitted in evidence through PW2. It reads as follows:–

“The company opened a current account with our Docemo Branch in September, 1990 and the account is singularly operated by Al-haji Abdulwahab Olaitan (second accused). It may be important to add here that although the mandate of the operation of the account has one Mr Yui Kam Chau as a second signatory who also signs singularly, all the drawings from the account since September, 1992 have always been signed by Alhaji Abdulwahab Olaitan. On the 30 July, 1993 Messrs. Olalomi Holdings paid into their ac-count with our Docemo Branch a UTB Idumota Branch cheque no. 00127 for N3,050,000 which was drawn on the account of First Union Industries Nigeria Limited. And from the signature on this cheque it is obvious that Alhaji Abdulwahab Olaitan is also the sole signatory to the account of First Union Industries Nigeria Limited, Idumota Branch. Also on the same 30 July, 1993, that is, the same day the UTB cheque was lodged into the account of Olalomi Holdings with our Docemo Branch, our then Docemo Branch Manager, (Mr Festus Agboola) (first accused) acting com-pletely and recklessly outside his lending authority as a Branch Manager, gave value to the UTB cheque of N3,050,000,00 which was later returned unpaid thereby grossly disregarding the laid down procedures in Trade Bank which stipulates that in the ab-sence of an approved direct credit limit for any customer, the mandatory number of clearing sessions must be observed before value can be given to any banking instrument paid in by our cus-tomers. In this particular case, Olalomi Holdings did not and still does not enjoy any direct credit facility that was approved by any constituted authority of Trade Bank. The then Branch Manager (Mr Festus Agboola)’s lending power did not include granting any direct credit that was not approved by any superior authority to his. These and the fact that the account of First Union Industries at the UTB Idumota Branch and Olalomi Holdings at our Docemo Branch are operated singularly by Alhaji Abdulwahab Olaitan is an indication that the transaction was pre-conceived and executed with the intention to defraud Trade Bank and was conjured wholly between Abdulwahab Olaitan and Mr Festus Agboola. This fact is confirmed by the act of withdrawing the sum of N2,500,000 from the account of Olalomi Holdings from our Docemo Branch vide cheque no. 164499 dated 1 July, 1993 and made payable to First Union Industries, the company whose UTB cheque of N3,050,000 was used to create a fraudulent credit in the first place.”

PW3, the Branch Manager of the Idumota Branch of UTB identified the name and signature of the second accused on


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exhibits V1 to V4, the documents used to open the account of First Union Industries in the Idumota Branch of UTB and testified that the second accused was the sole signatory to the account.

The IPO, PW4, testified that the Police carried out investi-gations into the case after they received exhibit X, the letter of complaint from NDIC which reads as follows:–

“Olalomi International Holding Ltd. The company maintains an account at the Docemo Branch of the

bank, solely operated by one Alhaji Abudulwahab Olaitan. It appears that the said Alhaji Olaitan owns another company, First Union Industries which has an account with UTB Idumota Branch also solely operated by him. On the 20 July, 1993, Al-haji Olaitan was alleged to have paid into the account of Olalomi Holdings a UTB cheque no. 00127 for N3,050,000 drawn on the account of First Union Industries. The then Branch Manager, Mr Festus Agboola, allowed him to draw immediate credit to the extent of the cheque which was subsequently re-turned unpaid. The balance on the account as at 29 March, 1996 was N6,908,895.92. Alhaji Olaitan for issuing dud cheque committed an offence contrary to section 1 of the Dishonoured Cheques (Offences) Act, 1990. He could also be charged under section 3(1)(a) of the Special Tribunal (Miscellaneous Offences) Act, 1990. The overdraft contravened the provisions of section 18(1)(b) of BOFID.”

Exhibits Y and Z are the statements of the first and second accused persons to the Police admitted in evidence through PW4, and it is settled law that the statement of an accused person forms part of the case for the prosecution. (See Ogba v The State (1990) 3 NWLR (Part 139) 505.) In exhibit Y, the first accused stated as follows:–

“I met Alhaji Wahab Olaitan as a customer in Trade Bank Plc Do-cemo Branch. He operated two accounts at the Branch – First Un-ion Industries and Olalomi Holdings. This was duly handed over to me by my predecessor Mr B.O. Mohammed as a foremost cus-tomer of the Branch. He also proved to be so by his manner of op-eration of both accounts. Sometime in July, 1993, he approached us that he was processing a bank Guarantee for this account from another bank. This was later confirmed on enquiry that he was processing a bank Guarantee of N3.0m which he wanted to use for export. Because of the time lag between approval and the time he was supposed to utilise this money for export, he pressurised us


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into releasing part of this money N2.5m with the full knowledge of my bosses. My bosses that related directly with me were Mr B.O. Mohammed and the MD Mr Samuel Ereola Kolawole. Eventually the bank that was supposed to release the money did not do so be-cause interest element was not factored into the arrangement. As far as I can remember, Alhaji Olaitan, the Chairman of Olalomi Holdings had 2 certificates of occupancy which I personally dis-patched to our legal dept. for perfection. I left the bank effectively on 23 December, 1993. There were some goods in the custody of the bank that belonged to Alhaji Olaitan which was meant to offset part of this facility. On the cheque paid into the account, the cus-tomer had been paying cheques into both accounts which were never returned unpaid. The customer was held in prime reverence by the bank officials (especially my bosses) that they accede to most of his requests which were however legal. The cheque was not fraudulently received into the account as it could not have changed any situation at hand. The said cheque was paid in for normal transaction. My former employers – Trade Bank have documents at their disposal. Please implore them to present any indicting query on this issue, together with my reply. All my ac-tions are always borne out of the facts on the ground coupled with the fear of God. Let us not hide under legal victimisation to achieve our purpose.”

Exhibit Z with 16 annexures is the statement of the second accused person and it reads:–

“. . . I wrote an application for an overdraft and Guarantee Loan to Trade Bank Docemo Branch Lagos to the tune of N3.5 Million and they accept my application and the request for a collateral be-fore they Guarantee the loan. (There is a CHEQ.) (sic) I issued a UTB cheque for N3.0m to Trade Bank and the cheque was given immediately (sic) value. Later the cheque was refunded unpaid while my facilities were still on. The returned cheque is in my pos-session. As at the time I issue that cheques (was) returned, I was having facility of N3.5 Million with Trade Bank Docemo Lagos.”

The Police Investigation Report is also in evidence as ex-hibit AB. It reads:–

“Mr Festus Agboola (first accused) Investigation revealed that the customer was only processing an application for a letter of guarantee and not an application for credit facility as claimed. Commenting on the dud UTB cheque which was returned unpaid, after he had earlier given immediate value to it, the suspect merely said that the customer had paid cheques into the account in the past which were never returned


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unpaid. Investigation however revealed that as a third party cheque which the customer paid into his account, the former branch Manager should have observed the mandatory number of clearing sessions before giving value to it in the absence of an ap-proved direct credit facility. Alhaji Abdulwahab Olaitan (second accused) Investigations into the allegations against the suspect revealed that he is a fraudulent customer. Alhaji Abdulwahab Olaitan is the Chairman of two different companies, Olalomi Holdings and First Union Industries. Olalomi Holdings maintains an account at Do-cemo Branch of Trade Bank Lagos, while First Union Industries has an account with UTB Idumota Branch Lagos. Both accounts are solely operated by the suspect. The UTB cheque for N3,050 which the suspect paid into the account of Olalomi Holdings was signed by himself. The cheque was drawn on the account of First Union Industries, a company owned by the suspect, Alhaji Ab-dulwahab Olaitan. The suspect knew very well that he had no money in his company’s account with UTB and yet he issued the dud cheque which was returned unpaid. Investigation further re-vealed that the suspect did not apply for credit facility as claimed, but only applied to the bank for a letter of Guarantee for N3,000,000 in favour of Citadel Investment and Venture Limited, a subsidiary of Triumph Merchant Bank which was duly approved for him. The customer has so far made a repayment of N2,640,00 leaving a balance of N5,548,236.22 on the account.”

PW4 further testified that – there was no application for the credit facility of N3.05 Million; on the 12 July, 1993 the second accused person was granted an unauthorised, unse-cured loan of N2.5 Million; before that date he was having a debit balance of N559,133.34 as debit; on the 16 July, 1993, the second accused person was equally granted an unauthor-ised and unsecured loan of N350,000; the second accused person solely operated the account of his company as Chairman; immediately before the N350,000 the debit balance was N2,598.379.91; the facilities were granted by the first accused without the approval of the Head Office; at the Head Office; he discovered that the facilities were unauthorised and unsecured; on the 30 July, 1993 a UTB cheque for N3,050.000 was credited to the account of the second accused person; it was a cheque he paid in which was given immediate value by the first accused person


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without observing a mandatory clearing session; subse-quently, on 5 August, 1993 the cheque was returned unpaid and the account had to be debited for the same amount; he found out that the cheque was to have been drawn on the ac-count of First Union Industries with UTB Idumota Branch and at the same time the cheque was issued the said account was in a debit balance of N138,305.11; there was no money in the account; the signatory to the account with UTB was the second accused person who was the sole signatory to the account between June and July, 1993.

Now, the first and second accused persons are alleged in count 1 of the Amended Charge to have “between the 7 June, and 31 July, 1993 conspired to commit a felony to wit, fraudulently granting credit facilities to Olalomi Hold-ings in the aggregate sum of N2,850,000 (and subsequently with the presentation and payment of a UTB cheque for N3,050,000) without lawful authority and any security or collateral in contravention of the bank’s rules and regula-tions and thereby committed an offence punishable under section 516 of the Criminal Code”.

The first accused is charged in Count 2 with the substan-tive offence of granting “various unsecured and unauthor-ised credit facilities to Olalomi Holdings a customer of the said bank in the total sum of N2,850,000 in contravention of the rules and regulations of the said Trade Bank and thereby committed an offence contrary to section 18(1)(b) of BOFID and punishable under section 18(2) of the said Decree”.

It is trite law that in a criminal trial, before conclusion can be arrived at that an offence has been committed by an ac-cused person, the trial court must look at the ingredients of the offence and ascertain critically that the acts of the ac-cused person are within the confines of the particulars of the offence charged. Amadi v The State (1993) 8 NWLR (Part 314) 644. Section 18(1) and (2) of BOFID provides:– “(1) No Manager or any other officer of a bank shall (a) . . . (b) grant any advance, loan, or credit facility to any per-

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and regulations of the bank; and where adequate secu-rity is required by such rules and regulations, such se-curity shall, prior to the grant, be obtained for the ad-vance, loan or credit facility and shall be deposited with the bank;

(c) . . . (2) Any Manager or officer who contravenes or fails to comply

with any of the provisions of subsection (1) of this section is guilty of an offence under this section and liable on con-viction to a fine of N100,000 or to imprisonment for a term of 3 years; and in addition any gains or benefits, accruing to any person convicted under this section by reason of such contravention, shall be forfeited to the Federal Govern-ment, and the gains or benefit shall vest accordingly in that Government.”

The question now is, what are the ingredients of the offence created by section 18(1)(b) of BOFID? Fortunately, this is-sue has been determined by the Special Appeal Tribunal in Ifegwu and 2 others v FRN (1997) 1 F.B.TLR 86. In that case, the appellants were charged in count 8, with granting credit facilities “without lawful authority in contravention of the rules and regulation of Alpha Merchant Bank” and in Count 9, with granting credit facilities “without security in contravention of the rules and regulations of Alpha Mer-chant Bank”. The SAT held, inter alia, that section 18(1)(b) of BOFID creates only one offence and not two separate of-fences, and that “Security” is relevant only if the evidence of rules and regulations are essential ingredients of the of-fence, and need not be included in the particulars of the charge, as it becomes relevant only as a defence. The Spe-cial Appeal Tribunal as per Honourable Justice D.O. Coker, also stated:–

“The question is on who lies the onus, the prosecution or defence, to prove the existence of rules and regulations of the Bank, that a Manager or Officer who grants any loan, advance or credit facility is authorised in fact to make the grant in accordance with rules and regulations of the Bank. Is it an essential ingredient of the of-fence for the prosecution to prove the existence of the rules and regulations of the Bank? We have carefully considered the sub-missions of Counsel for and against the view that section 18(1)(b) creates an absolute offence. If it does, it is for the Manager or


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Officer of the Bank who is accused of making grant of the facility in question to bring himself within the exception by adducing evi-dence that the grant was made in accordance with the rules and regulations of the bank. A case in point is Regina v Grilliopoulos and others (1953) 20 NLR 114. The particulars “in contravention of rules and regulations of the said Alpha Merchant Bank plc and the regulatory authorities (CBN/NDIC) are unnecessary but mere surplusage in each of the Counts 1, 8 and 9. If the defence rely on the rules and regulations as a defence, then he has a burden of ad-ducing evidence in proof.”

The Special Appeal Tribunal also held in the above case, that BOFID does not give any specific name to the offence created in section 18(1)(b); that the offence created by sec-tion 18(1)(b) of BOFID does not specify any precise amount of loan, advance, or overdraft material; and that it is suffi-cient to prove that the Manager or Officer of the Bank granted loan facility of any amount, the Manager is guilty except he can prove his authority by producing evidence of the Rules and Regulations which empowers him.

It therefore follows from the decision of the Special Ap-peal Tribunal (reproduced above), that to prove the allega-tions in Count 1 of the Amended Charge, the prosecution must establish:– (A) That the first accused person was the Manager at the

Docemo Branch of Trade Bank between the 7 June, 1993 and 31 July, 1993; and

(B) That the first accused person granted credit facilities to Olalomi International Holdings through the sec-ond accused person.

To start with, there is no dispute that the accused person was the Manager at the Docemo Branch of the Trade Bank be-tween the 7 June, 1993 and 31 July, 1993. There is the oral and documentary evidence presented by the prosecution to that effect which has not been denied by the first accused person. He also admitted in his evidence as DW1 that he was transferred to the Docemo Branch of Trade Bank as Branch Manager in March 1993, and it is trite law that an admitted fact need not be proved. (See Onogwu v The State (1995) 6 NWLR (Part 401) 276.)


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The prosecution must also prove that the first accused per-son granted an advance, loan or credit facility to Olalomi Holdings through the second person who operated the ac-counts, referred the Tribunal to the definition of the words “Advances”, “Loans”, “Credit” and “Lending or loaning of money or credit” in Black’s Law Dictionary (5ed) and sub-mitted that the terms are used interchangeably. I agree with her. To my mind, the difference in definition is like saying 6 and half a dozen. The words “Advance”, “Loan” and “Credit” are defined in Black’s Law Dictionary (6ed) thus:–

“Advance – To pay money or render other value before it is due; to furnish something before an equivalent is received; to loan; to furnish capital in aid of a projected enterprise, in expectation of return from it. Loan – A lending. Delivery by one party to and receipt by another party of sum of money upon agreement, express or implied, to re-pay it with or without interest. ‘Loan’ includes (1) the creation of debt by the lender’s payment of or agreement to pay money to the debtor or to a third party for the account of the debtor; (2) the creation of a debt by a credit to an account with the lender upon which the debtor is entitled to draw immediately; (3) the creation of debt pursuant to a lender’s credit card or similar arrangement, and (4) the forbearance of debt arising from a loan. Credit – The ability of a business or person to borrow money, or obtain goods on time, in consequence of the favourable opinion held by the particular lender as to solvency and past history of re-liability. The correlative of a debt; that is, a debt considered from the creditor’s standpoint, or that which is incoming or due to one. That which is due to a person, as distinguished from debit, that which is due by him.”

Now, there is overwhelming evidence, oral and documen-tary, presented by the prosecution (reproduced above) which shows clearly that on some occasions, the first accused per-son granted credit facilities to Olalomi Holdings through the second accused person who was operating the accounts of the company. The question, for determination now is – What authority empowered him to do so?

The first accused person’s answer to the above posed question in his defence is that Olalomi Holdings was one of the most important customers of the bank as at that time;


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that the second accused who was one of the directors of Olalomi Holdings was one of the more visible operators of its accounts with the branch; that the facility of N350,000 was fully authorised, secured and rightly granted, as it ema-nated as a result of a Head Office approval of N500,000 fa-cility with an expiry period of six months; that the security is denoted by a C of O No. 8/8/199916 and the authorisation is equally denoted by a letter of approval (exhibit K2) commu-nicated to the customer on 26 April, 1993; that the N2.5 Million facility rose as a result of a bank Guarantee facility granted to Olalomi Holdings; that the sum of N3 Million was supposed to have been released by Triumph Merchant Bank and the failure to repay the N3 Million at the due date will make the Trade Bank which is the Guarantor to be li-able to pay back; that in essence, the sum of N3 Million was supposed to come from Triumph Merchant Bank to Olalomi Holdings, and Trade Bank was not supposed to release the N3 Million directly to Olalomi under normal circumstances. He then said:–

“The customer approached the bank for cash of N3 Million pend-ing the time the cheque from Triumph Merchant Bank will be re-leased to him. This his request was notified to the Head Office through my immediate superior, Mr B.O. Mohammed. He was to gain time on importation for which the money was meant ie the money of the Guarantee. Since it seemed to the bank that this is a normal transaction which was not beyond the customer’s capabili-ties, my superior had no objection to the transaction ie the releas-ing of cash of N2.5 Million pending the recovery of N3 Million cheque from Triumph Merchant Bank. In actual fact, in the letter of approval of Guarantee communicated to the customer, the whole security for such transaction is detailed therein (exhibit B–D). In essence, the N2.5 Million was approved by my superior put-ting many factors together of which I will mention some:–

(1) The ability of the customer to repay in the sense that a N3 Million cheque was expected by the bank before the end of July, 1993.

(2) The customer has various facilities with the bank one of which was packaged under Trade Boosting Scheme. This Trade Boosting Scheme is a product put in place by the bank to enhance their profitability and to give quick and ef-ficient service to the customer. It always operates within a


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period of one month. This product was designed to circum-vent the domination of the Credit Market at that period by Finance Houses and the new generation Merchant Bank who seemed to be covering all the businesses then. There-fore the hallmark or the main pre-occupation of the banks then was how to generate more profits and increase their deposit base. So all these were at the back of our mind while granting the cash of N2.5 Million to the customer coupled with the fact that there was a security in place in case of default.

(3) The bank had a dual control on the warehouse of the cus-tomer where there still existed a substantial quantity of goods. The Tribunal can see that the bank was comfortable on all fronts in releasing the sum of N2.5 Million. I would like to add that it surprises me the various denials by the of-ficials of the bank of their knowledge of this transaction. What I am saying is that the facility of N2.5 Million was approved by my superiors. It was with the instruction of the Management that they took over the warehouse belonging to Olalomi International Holdings to further secure the fa-cilities he might be having with the bank. From exhibit AD–D, the last paragraph of the minute (exhibit AF–D) reads:–

‘. . . Docemo Branch: The warehouse of Olalomi had been put under dual control. The MD noted that he is yet to receive the weekly report on the Olalomi Account. The frequency was then amended to each fortnight.’”

DW1 further testified that the facility of N.5 Million was approved orally since the facility was to be repaid by the end of the month, but that subsequently, there were written evidences that indicated that bank was fully aware of the authorisation, and in this regard referred to exhibit AG–D, dated 7 January, 1994, written by his superior Mr B.O. Mo-hammed to the MD Olalomi Holdings.

Exhibit AG–D, titled “Re-Outstanding Debit Balance” reads as follows:–

“We refer to your letter dated 21 December, 1993 and our Do-cemo Branch Response of 5 January, 1994 on the above subject matter and wish to express our displeasure about the way you are handling the settlements of debits which was mutually arranged to last a maximum period of only 30 days in July, 1993. It is regret-table that you could not justify the confidence we repose in your


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goodself before granting you the credit facilities especially as we now realise your words are no longer your bonds. For the avoid-ance of doubts, you are being advised that by 31 January, 1994, if the facilities are not fully repaid, the bank will commence all legal constitutional means of recovering the debt not minding the nega-tive effects it will cause our relationship including the realisation of the Legal Mortgage on the properties pledged. We hope you will do the needful soonest to avoid any unpleasant action which would mar our cordial relationship.”

He further explained that as at July, 1993, they were fully aware of the facilities granted from exhibit AG–D; that the claim of ignorance of this facility by PW2 and the officials of the bank is not right since various returns were rendered to the various departments of the Head Office both daily, bi-weekly, half-monthly. Monthly cum quarterly reports, so they were fully aware from inception and it was sanctioned by them; that from exhibit AF–D, the facility was secured; that the value of the stocks in the warehouse as recorded by the credit officer was in excess of N6 Million and referred to exhibit AH–D, a letter to the Manager, Trade Bank dated 4 October, 1993 and titled “Re:– Our outstanding Debit Bal-ance with your bank”. It reads as follows:–

“We write to intimate you with our inability to pay off a debit bal-ance outstanding on our current account with you. As you are aware of the hardship being experienced by traders under the pre-sent economic crises in the country, business has not been favour-able. We thank God that things are improving and efforts are now made to regularise our account. We now implore the bank to assist with a maximum of 60 days ie the outstanding balance will be re-paid on or before 15 December, 1993. We are having two contain-ers to be cleared which is about N4,922,800 and goods with ware-house is about N5,000,000. By the special grace of God, our ac-count will be fully repaid before the stated date. Thanks for your usual co-operation and assistance.”

In his address, Mr Adeniji, learned Counsel for the first ac-cused person, submitted that the first accused was properly authorised and empowered by the bank to grant the said credit facilities, as exhibit K2 which is the letter approving N500,000 clearly stipulates that the said facility could be util-ised within six months of the approval, furthermore, that the bank approved the facility in its letter dated 26 April, 1993


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and the first accused disbursed only N350,000 on 16 July, 1993 which is still within the six months period stipulated for utilising the facility. He was therefore of the view that the first accused person was therefore authorised to and properly disbursed the facility as instructed and to the best interest of the bank, and that the prosecutor strenuously tried to show that the facility granted on 26 April, 1993 expires on 31 April, 1993 but that this was not tenable based on the follow-ing facts:– (1) There is no 31 April, 1993 as April ends on 30th day. (2) Provisions in a document should not be considered

in isolation but as a whole in relation to other provi-sions to derive the most reasonable, correct interpre-tation and intention of the grantor. Any contradiction therein should in this case be resolved in favour of the accused. (See Obade v The State (1991) 6 NWLR (Part 198) 435; Ayub-Khen v The State (1991) 2 NWLR (Part 172) 127; and Emine v The State (1991) 7 NWLR (Part 204) 480.)

(3) It is commercially unwise to expect a facility granted a customer to expire within four days of granting same and expect the customer to immedi-ately pay back. Moreso, the letter of grant actually stipulates 6 months for utilisation of the said facility.

(4) It is a well-known fact in commercial transaction that deeds are sometimes prepared thereafter the transac-tion. This does not necessarily mean that there is no provisionally binding transaction/agreement between the parties until the deed. Trade Bank letter of 26 April, 1993 was an offer which was accepted by Olalomi and consideration furnished when the N350,000 facility was given to it.

He therefore submitted that the prosecution has failed to prove beyond reasonable doubt that the first accused person has no authority to grant the said N350,000 facility and urged the Tribunal to hold that this facility was properly granted by the first accused as authorised through exhibit K2.


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On her own part, learned Counsel for the prosecution sub-mitted as follows:– “(a) In the case of N350,000 granted by the first accused person

to Olalomi Holdings on the 16 July, 1993, the case before the Tribunal arose out of financial impropriety inconsistent with the rules and regulations of Trade Bank. See Manual of Procedure (MOP) (ie exhibit P) on ‘Credit Policy and Cheque Clearing’ which the first accused person tried re-lentlessly to conceal by altering the statement of account of Olalomi Holdings to no avail ie exhibit M.

(b) The bank on noticing this made a report to NDIC pursuant to which the FIIB was drafted to investigate the case and found from the investigation thereafter that this sum was unauthorisedly granted by the bank.

(c) If the first accused person has authority to grant these cred-its the subject matter of the charge, this case would not come to this Tribunal. The argument of first accused per-son’s Counsel that the facility of N350,000 was in compli-ance with exhibit K2 which according to his interpretation the facility should be utilised within 6 months of the ap-proval fails for these reasons:–

(i) Exhibit K2 under the hand of the first accused talked about the facility of N500,000 and not more or less. The authority given by exhibit K2 is for N500,000 only and exhibit K2 is clear and unambiguous.

(ii) There is therefore no relationship between exhibit K2 and the facility of N350,000

(iii) The first accused person had granted over and above N500,000 to Olalomi Holdings after exhibit K2 was written and before even granting the sum of N350,000 to Olalomi Holdings. According to the first accused while being cross-examined – ‘On the 3 May, 1993 the debit balance was N2,006,433.15. The account exhibit M was in debit of N6,433.15 before I gave it N2 Mil-lion bringing the debit further to N2,006,433.15’, ‘On the 7 June, 1993, I was the Branch Manager. On that day the customer made a withdrawal of N1 Million. The debit balance before that was N1,465,783.78. Yes the account was overdrawn before I allowed another withdrawal’. Simply put the overdrafts are as follows – on the 3 May, 1993 – N2 Million; 7 June, 1993 – N1.5 Million; 16 June, 1993 – N1 Million. All these


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overdrafts are certainly in excess of N500,000 and preceded the unauthorised overdraft facilities, the sub-ject matter in this charge.”

Now, the first accused person is not being tried by the Tri-bunal for granting overdraft facilities to Olalomi Holdings on the 3 May, 1993, the 7 June, 1993 or the 16 June, 1993, the allegation against him is that he granted a facility of N350,000 to Olalomi Holdings on the 16 July, 1993. His defence is that he was empowered to do so from the ap-proval granted to Olalomi Holdings on the 28 April, 1993. He stated as follows in his replies during cross-examination:–

“Yes I gave N350,000 as part of the N500,000 approved by the bank. Yes, I was the branch Manager when I gave that money ap-proved by the bank. Exhibit K2 was used to communicate the ap-proval of Olalomi Holdings from the branch. The original letter from Head Office will be in the customer’s credit file. I was a sig-natory to exhibit K2. The Branch communicates the approval to the customer after the original letter of approval has been received from the Head Office. The first page of exhibit K2 reads . . . This is a standard letter from our credit department. The actual expiry date is six months from the date of approval. The facility only needs to be renewed on monthly basis. Exhibit K2 was written on April, 28 1993 which boils down to the fact that the facility cannot exceed 31 April. It is my responsibility to sign exhibit K2 as Branch Manager on behalf of the Branch. I am not lying. I had the authority of the Head Office to grant the facility of N350,000. The bank has granted Olalomi other facilities, not myself.”

The evidence before the Tribunal is that Olalomi Holdings applied to the bank in exhibit K1 for “N1 Million Overdraft Revolving Facility”, the bank approved the application but only for N500,000 in exhibit K2. To my mind, the operative word here is “Revolving”. The words “Revolving Credit”, “Revolving Funds” and “Revolving Loan” are defined as follows in Black’s Law Dictionary (6ed) thus:–

“Revolving Credit – Type of consumer credit arrangement which permits a buyer or borrower to purchase goods or secure loans on a continuing basis so long as the outstanding balance does not ex-ceed a certain limit. Loans are repaid and new loans granted in a cycle. In commercial financing, binding agreement that commits a bank to make loans to a company up to a predetermined credit


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limit. To obtain this type of commitment from a bank, a company usually pays a commitment fee based on the unused portion of the pledged funds. Revolving Fund – A fund from which withdrawals are made either as loans or disbursements, with the obligation of repaying the fund (with or without interest) to keep the fund intact. A fund whose amounts are continually expended and then replen-ished. Revolving Loan – A Loan which is expected to be renewed (ie turned over) at maturity.”

Exhibit K2 is reproduced above, but it is necessary here to reproduce the relevant paragraphs in the determination of this issue –

“Amount – Overdraft N500,000 Expiry – The facilities will expire on 31 April, to be renewed be-fore the date. If the above facilities are not utilised within six months hereof, we shall consider this offer to have lapsed and will not be committed to providing the funds as aforesaid. Please sig-nify your agreement and acceptance of the banking facilities by signing and returning to us the attached copy of this letter prepared for that purpose.”

There is evidence on exhibit K2 that Olalomi Holdings ac-cepted the offer with the conditions. There is no evidence in exhibit M, the statement of account of Olalomi Holdings with Trade Bank, of the withdrawal of a lump sum of N500,000 from the account. Counsel for the first accused person is correct that there is no 31 April as the month ends with the 30th, and I also agree with him that it does not make sense that a facility offered by a bank to a customer on the 28 April will be expected to expire two days later.

I am of the view that looking at the definition of the words, “Revolving Credit”, “Revolving Fund” and “Revolving Loan”, and the use of the words “The facilities will expire on 31 April, to be renewed before the date”, the interpreta-tion that should be given to exhibit K2 is that if the facilities are not used within six months of the 28 April, 1993, the of-fer by the bank will have lapsed. To give it any other inter-pretation will be ridiculous, as it is not possible for an offer to be accepted by the customer, the facilities utilised and re-newed before the 30 April, a mere two days after the offer letter was written and communicated to Olalomi Holdings. I


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accept the explanation of the first accused and hold that the prosecution has failed to prove that the first accused person had no authority to grant the said sum of N350,000 facility.

As regards the N2.5 Million facility granted, Mr Adeniji submitted that the first accused derived the authority to grant same from:– a. Exhibit B–D, (the N3 Million Guarantee) initially

approved for Olalomi Holdings. b. Verbal instructions by the first accused person’s su-

perior officer Mr B.O. Mohammed who directed him to release this sum to facilitate Olalomi Hold-ings’s importation pending the receipt of the N3 Million from Citadel Bank to Olalomi’s account in Trade Bank and which verbal authorisation was later affirmed by Trade Bank in exhibit AL–D.

c. Discretionary lending power vested on the first ac-cused person to generate and grant loans to a limit of N20Million to a limit for the year 1993. Exhibit T read in conjunction with exhibits AI–D, AJ1–D, AJ2–D (Minutes of Trade Bank Management Meet-ings) confirm the above stated discretionary powers on the first accused which enable him to release the alleged sum to Olalomi Holdings after taking into consideration Olalomi’s ability to repay the facility in view of the turnover in its account, and more so the fact that Olalomi enjoys a Trade Boosting Scheme Facility. The first accused has within the confines of his operational rules and powers judi-ciously exercised his discretion in granting the N2.5 Million facility to the best interest of the bank which garnered a profit of N27,283.77 in form of bank charges thereon from the transaction only. PW2 in his evidence during cross-examination stated that the first accused has no discretionary lending powers. The first accused person by exhibits T–D, AI–D, AJ1–D and AJ2–D has shown that he has discretion-ary powers and even to a limit of N20 Million for loans and advances.


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d. From exhibit G–D, (a High Court Ruling in suit No. LD/4706/95 between Trade Bank v Olalomi Interna-tional), Trade Bank specifically stated in an affidavit in support of their motion “That on or about the 30 June, 1993 the first defendant ie Olalomi applied and was granted by the plaintiff (ie Trade Bank) an over-draft via Trade Bank (Obun Eko Branch) cheque no. 064499 in the sum of N2.5 Million only”. PW1 and PW2 in evidence admitted under cross-examination that the sum of N2.5 Million on this same cheque is what the first accused is being here charged to have granted to the same person – Olalomi without au-thority. An affidavit evidence is admissible against whoever asserts same. More so in this instance a court of law of equal jurisdiction with this Tribunal has affirmed that the said N2.5 Million overdraft fa-cility was properly granted with its knowledge and Authority. Mr Adeniji urged the Tribunal to hold so and prevent the bank/prosecution from approbating and reprobating on this same issue. He urged the Tribunal to uphold the aforesaid affidavit and the courts ruling.

In the prosecution’s reply to the address of the first accused person, Miss Onyeama argued that the submissions of Coun-sel that the first accused derived his authority for this unau-thorised grant of overdraft facility of N2.5 Million from ex-hibit B–D which is exactly the same with exhibit R3 cannot go far for the following reasons:– 1. Exhibit B–D which is the same with exhibit R3 is

clear and unambiguous. It is a draft letter of guarantee given by Trade Bank to the tune of N3 Million on be-half of Olalomi Holdings to Triumph Merchant Bank.

2. Exhibit B–D/R3 does not confer the first accused person with the authority to grant any credit facilities to Olalomi Holdings.

3. Exhibit B–D/R3 which was not written in isolation arose out of the circumstances of exhibits R1 and R2.


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4. Exhibit B–D/R3 was more or less a draft copy which was sent to Triumph Merchant Bank by Trade Bank and which was subsequently cancelled and rejected by Triumph Merchant Bank through its letter exhibit AN–P.

5. On the receipt of exhibit AN–P. Trade Bank immedi-ately communicated to Olalomi Holdings its unwill-ingness and inability to issue a letter of Guarantee on behalf of Olalomi Holdings vide exhibit A02–P.

6. As a result of these circumstances the letter of guar-antee was finally cancelled. The first accused person during cross-examination by the prosecution testi-fied to this cancellation when he said that “the letter of guarantee so there was no facility to Olalomi Holding by Triumph Merchant Bank”. The question is where in then lies the connection between a letter of guarantee exhibit R3 and the facility of N2.5 Mil-lion unauthorisedly granted Olalomi Holdings by the first accused. Furthermore, does the combined ef-fects of exhibits R1, R2, R3, AN–P, A02–P confer any authority to grant credit of any nature to Olalomi Holdings by the first accused. She therefore submitted that since there is no authority derivable from these exhibits, the first accused person has no defence and is guilty of the offence and urged the Tribunal to convict him.

Now, Counsel including Mr Olekanama, learned Counsel for the second accused person who has rested his case on that of the first accused person, have addressed me exten-sively on different aspects of this issue of the grant of N2.5 Million facility to Olalomi Holdings. I agree totally with Miss Onyeama that the first accused person cannot be said to have derived his authority to grant the said facility from exhibit B–D/R3 which is more or less a draft letter of Guar-antee. The first accused person himself as DW1 admitted during cross-examination that “Yes, Triumph Merchant Bank rejected this Guarantee by Trade Bank after the money has been released to the customer. The guarantee


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was cancelled so there was no facility to Olalomi by Tri-umph Merchant Bank. I will call the N2.5 Million an over-draft facility given in anticipation of the bank guarantee. The N2.5 Million has no bearing with the loan agreement. It has bearing only with the security left. That is the same security that was pledged. The securities were pledged before the fa-cilities were given”.

Now, the defence of the first accused person on this issue appears to be that he received verbal instructions from his superior officer to disburse the N2.5 Million to Olalomi Holdings in anticipation of the N3 Million facility from Tri-umph Merchant Bank which was not forthcoming after the cancellation of a letter of guarantee by Trade Bank at the in-stance of Triumph Merchant Bank.

The first accused also tendered exhibit AG–D, the letter written to the second accused person by his superior officer, Mr B.O. Mohammed, Head of Southern Operations, part of which read “We wish to express our displeasure about the way you are handling the settlements of debts which was mutually arranged to last a maximum period of only 30 days in July, 1993. It is regrettable that you could not justify the confidence we repose in your goodself before granting you the credit facilities especially as we now realise your words are no longer your bonds”. To my mind, the use of the words “was mutually arranged” corroborates the defence of the first accused person that the bank was aware of the over-draft facilities granted to Olalomi Holdings. In addition to this, a copy of a Ruling by a Lagos State High Court is in evidence as exhibit G–D, and the paragraphs of an affidavit sworn by Trade Bank reads:– 8. That on or about the 30 June, 1993 the first defen-

dant applied to and was granted by the plaintiff an overdraft via Trade Bank Nigeria (Obun Eko Branch) cheque no 064499 in the sum of N2,500,000 only.

9. That on or about the 12 July, 1993, the first defen-dant drew on the account No. 07-37-0027701 the cheque referred to in paragraph 8 above the same


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having gone through clearance – A copy of the statement of account for this period is hereby at-tached and marked as exhibit D.

10. That the second defendant/respondent guaranteed the indebtedness of the first defendant/respondent to the plaintiff/applicant failing which the said second defendant/respondent shall personally repay the out-standing debt of the first defendant/respondent. A copy of the continuing Deed of Guarantee executed by the second defendant/respondent in favour of the plaintiff/applicant is attached hereto and marked as exhibit E.

11. That as further security for the indebtedness of the first defendant to the plaintiff/applicant the 2nd re-spondent/respondent pledged his property at 19/21 Achabi Shomuyi Street, Ijeshatedo, Lagos with Cer-tificate of Occupancy no. 8/8/1991C at the Lands Registry Lagos to the plaintiff/applicant under the agreement signed between the plaintiff/applicant and the first defendant on 16 September, 1993 which is hereby attached and is marked as exhibit F.

The parties before the Lagos State High Court in the above case are – Trade Bank PLC v Olalomi International Hold-ings and Alhaji Abdulwahab Olaitan (the second accused person in this case). Exhibit M is the statement of account of Olalomi Holdings with Trade Bank, the account number is 07-37-0027701-07 same as referred to in paragraph 9 above. There is a debit entry in exhibit M for the sum of N2,500,000 on the 12 July, 1993, the same date referred to in paragraph 9 above. Exhibit N is a copy of two cheques for N2.5 Million and N350,000 the number of the cheque for N2.5 Million is 064499, the same as the cheque number referred to in paragraph 8 above. The details of the security in exhibit K2 are Legal Mortgage over landed property plus Certificate of Occupancy title No. 8/8/1991C, the same Cer-tificate of Occupancy referred to in paragraph 11 above. The term “equity” denotes the spirit and habit of fairness, just-ness, and right dealing which would regulate the intercourse


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of men with men. It is justice administered according to fairness as contrasted with the strictly formulated rules of common law. See Black’s Law Dictionary (6ed). It goes without saying that the equity demands that Trade Bank cannot approbate and reprobate at the same time, as Mr Adeniji rightly submitted. Trade Bank cannot swear to averments in an affidavit before a High Court admitting that Olalomi Holdings got clearance for the facility of N2.5 Mil-lion and then come to this Tribunal to give evidence that the facility was granted to Olalomi Holdings by the first accused person without lawful authority against the rules and regula-tions of the bank.

This state of affairs raises doubts which must be resolved in favour of the first accused person and I so hold. I am sat-isfied with the explanation of the defence that the said N2.5 Million facility was granted with the knowledge and author-ity of Trade Bank.

On the issue of the UTB cheque for N3,050,000, the first accused person as DW1 testified as follows in his evidence in chief:–

“There was nothing like a facility of N3,050,000 granted by me. All I can remember about such a figure was a cheque paid in by the customer upon which no withdrawal was made. The cheque was given value and clearance by me. What happened in this case was that the cheque was given direct credit by the bank. This means cheques that were given a value before the num-ber of clearing dates, and this exercise is a normal banking prac-tice even if you look at the defective Manual of Procedure that was tendered by the prosecution. The item 10 in the introductory aspect supports direct credit as a normal banking practice, which I may want to read for the benefit of this Tribunal. So it is normal bank-ing practice and banks do engage in it to boost their profitability. This means that a punitive interest rate is applied on the value of the cheque for the number of days the cheques were supposed to be in clearing. Olalomi Holdings being one of the prime customers in the branch is accorded this service because none of his cheques presented at the branch has ever bounced or returned unpaid. None of it bounced except the last one N3,050,000. I may wish to add that all I was doing was in consonance with my commission ap-pointment as the Branch Manager of Docemo Branch. I was given the task of revamping the branch of which profitability was not


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congruent with the level of transaction and with the interest of the bank on my mind and the amount of trust reposed on me by the bank Management. I was supposed to look for all possible ways of making the branch to succeed and this I was able to do because at the end of the year, 1993 I was able to post a profit figure of over N26 Million as compared with the earlier performance in 1992 of a mere N7 Million. There was never any complain from my supe-riors even on the last one because everything was done on the am-bit of normal banking operation. If they had felt otherwise, they would have instituted disciplinary procedure against me which en-tails first of all giving me a query, after which, if they are not sat-isfied, they summon me to a disciplinary committee. If this is done they would have taken a number of steps which may send me on suspension or to terminate my appointment or several other measures which they may deem fit. But up today, nothing of such was done.”

On this issue, I agree with Miss Onyeama that the defence of the first accused person lacks merit for the following rea-sons:– (1) Exhibit M shows that before the cheque was lodged in, the

balance in the account was N2,951,644.66 debit. After the unauthorised direct credit was given to the UTB cheque the balance on the account came to N98,355.34 credit balance, and the credit was given to the cheque on the same day it was lodged.

(2) Even if he had discretionary lending limits as he claimed to justify his action. The UTB cheque was credited on the 30 July, 1993 after the discretionary lending limit was with-drawn through exhibit T–D which reads – “In view of the funding position of the Bank, your discretionary lending power is hereby suspended with effect from 19 July, 1993 until further notice”.

(3) The mere fact that a banking practice is unlawful does not make it any less illegal. As I stated in the case of FRN. v Patrick Eze and 4 others (1998) 4 FBTLR 59–

“The defence of the third accused, from her statements to the Police and her evidence before the Tribunal, would appear to be, that it was the practice she met in the branch and since there was no query on it from the Head Office, she also adopted it. But that is inexcusable, adopting an illegal practice does not make it any less il-legal and will not exonerate her from criminal liability. I did say in the case of FRN v Ugwuadu and others


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(1998) 2 F.B.TLR ‘an illegality remains an illegality and no amount of banking practice will make it lawful.’”

Be that as it may, one fact stands out clearly and that is no withdrawals were made on the N3,050,000 paid into the ac-count of Olalomi Holdings as a result of the direct credit of the said sum into the account. PW2 testified that “at the end of July, 1993 by this direct credit, the account of Olalomi Holdings was made to give to the bank a false credit balance of N6,280.30. However, after the cheque was returned unpaid by UTB, the account of Olalomi Holdings had to be debited back with the sum of N3,050,000 which was the value earlier credited. The intention of that action from practice we had come to realise that some Branch Managers were in the habit of trying to cover up the balances in the account of customers to which they had allowed irregular and unauthorised credit facilities. What transpired on this account towards the end of July, 1993 was a confirmation of this practice. In this particu-lar case, the account on which the UTB cheque was drawn was also operated by the same second accused person. They should have been aware that the account at UTB from which he drew the cheque had no sufficient funds”.

Now, PW3 came from Idumota Branch of UTB to testify and tender documents. He identified exhibit O as a UTB, First Union Industries account cheque and tendered exhibits V1 to V4 which show that the second accused was the sole signatory to the account of First Union Industries Ltd as well as a director and member of that company. He also gave evidence on the basis of exhibit W which he tendered that as at the time exhibit O was written and presented by the sec-ond accused person to Trade Bank on 30 July, 1993, there was no money in exhibit W, the computer printout of the statement of account of First Union Industries Account with UTB. He further testified that “In exhibit W, on the 30 July, 1993, the entry is a debit balance of N138,305.11. Exhibit O is a UTB cheque for N3,050,000. From the exhibit, the cheque was drawn on 30 July, 1993. There is no entry on exhibit W from 30 July, 1993 to 8 August, 1993 to show that such money left the account. From 30 July, 1993 to 8 Au-gust, 1993, the entry on 6 August, 1993 reflects a debit


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balance of N239,534.15. If the cheque was paid, it would have reflected in exhibit W”.

The first accused person in exhibit Y, his statement to the Police admitted that the second accused person operated two accounts, First Union Industries and Olalomi Holdings. In other words, from the totality of the evidence before the Tri-bunal, it is obvious that there was an agreement between the first and second accused persons to create the false impres-sion that the account of Olalomi Holdings was a healthy one, by the unauthorised direct credit by the first accused person of a dud cheque issued by the second accused knowing fully well that he did not have such funds in the First Union Indus-tries account with the Idumota Branch of UTB. Section 23(3) of the Failed Banks Decree as amended, provides as follows – “Where a person is charged with an offence under this De-cree, but the evidence establishes the commission of another offence under this Decree, the offender shall not be entitled to acquittal but he may be convicted of that other offence and punished as provided under this Decree”. Section 516 of the Criminal Code provides as follows:–

“Any person who conspires with another to commit any felony, or to do an act in any part of the world which if done in Nigeria would be a felony, and which is an offence under the laws in force in the place where it is proposed to be done, is guilty of a felony, and is liable, if no other punishment is provided, to imprisonment for 7 years, or if the greatest punishment to which a person con-victed of the felony in question is liable is less than imprisonment for 7 years, then to such lesser punishment.”

The prosecution must prove the following to ground a con-viction for conspiracy:– (1) That there was an agreement between the persons

charged; and (2) That the agreement was to commit an unlawful act

or to commit a lawful act by unlawful means. (See Erim v The State (1994) 5 NWLR (Part 346) 522; Atano v The State (1988) 2 NWLR (Part 75) 201; Ikemson v The State (1989) 3 NWLR (Part 110) 455 and Clark v The State (1986) 4 NWLR (Part 35) 381.


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The bedrock of the offence of conspiracy, is the agreement to do something unlawful, consequently, there can be no conspiracy unless at least two persons conspire. (See Ikem-son v The State (1989) 3 NWLR (Part 110) 455 and Erim v The State (supra)). It is settled law that it is open to the trial Judge to infer conspiracy from the fact of doing things to-wards a common end by the execution of a planned and premeditated common intention and a common purpose, be-cause the crime of conspiracy is usually hatched with utmost secrecy and the law recognises the fact that in such a situa-tion, it might not always be easy to lead direct and distinct evidence. (See Gbadamosi v The State (1991) 6 NWLR (Part 196) 182.) It is also the law that the conspirators need not know themselves and need not to have agreed to commit the offence at the same time. (See Njovens and others v The State (1973) NSCC 257.) A conspiracy can then be inferred from the facts of doing things towards a common end, where there is no direct evidence in support of an agreement be-tween the accused person.

The essential ingredient of the offence of conspiracy lies in the bare engagement and association to do an unlawful thing which is contrary to or forbidden by law whether that thing be criminal or not and whether or not the accused persons had knowledge of its unlawfulness. (See Clark v The State (supra).) See also the case of Erim v The State (supra), where the Supreme court held that:–

“the offence of conspiracy is completely committed the moment two or more persons have agreed that they will do, immediately or at some future time, certain things. It is not necessary in order to complete the offence that any one thing should be done beyond the agreement reached. At that stage even if the conspirators repented and stopped or had no opportunity to carry out their agreement or are prevented or fail in what they agreed to do, the offence is al-ready a fait accompli.”

In the instant case, I am therefore satisfied that the prosecu-tion has established a case of conspiracy against the first and second accused persons. Consequently, I find the first and second accused persons guilty of the offence of conspiracy to issue, sign and present a dud UTB cheque for N3,050,000


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which was directly credited into the account of Olalomi Holdings with Trade Bank to give to the bank a false credit balance of N6,280.30 and convict them accordingly.

The second accused person is also charged in Count 3 of the amended charge as follows – “That you obtained credit from Trade Bank to the tune of N3,050,000 for the said Olalomi Holdings by means of a First Union Industries UTB cheque no. 00127 a company in which you are the Chairman/Director and signatory which when presented for payment not later than 3 months after the date of the cheque was dishonoured on the ground that no fund or insufficient funds were outstanding to the credit of the drawer of the cheque on which the cheque was drawn and thereby com-mitted an offence contrary to section 1(1)(b) of the Dishon-oured Cheques (Offences) Act, 1990”.

Now, section 1(1)(b) of the Dishonoured Cheques (Of-fences) Act provides that:–

“Any person who (b) obtains credit for himself or any other per-son, by means of a cheque that, when presented for payment not later than 3 months after the date of the cheque, is dishonoured on the ground that no funds or insufficient funds were standing to the credit of the drawer of the cheque in the bank on which the cheque was drawn, shall be guilty of an offence.”

On this Count, I agree with Mr Olekanama that this charge must fail because the evidence before the Tribunal is that no withdrawal was made as a result of the direct credit of the UTB cheque of N3,050,000 into the account of Olalomi Holdings, so the second accused person could not have “ob-tained credit for himself or any other person”. Conse-quently, the charge in Count 3 fails and the second accused person is discharged and acquitted accordingly.

The first accused person was charged in Count 2 with granting various unsecured and unauthorised credit facilities to Olalomi Holdings in the total sum of N2,850,000 in con-travention of the rules and regulations of Trade Bank. The findings of the Tribunal earlier on in this judgment is that the granting of the credit facilities could not be said to be unsecured and unauthorised as the explanation of the first


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accused was accepted. This charge in Count 2 also fails and the first accused person is accordingly discharged and ac-quitted.

The first and second accused persons are also charged in Counts 4 and 5 with the offences of conspiracy to steal and the stealing of the said N2,850,000 mentioned in Count 2 of the charge. Since that charge failed, the allegations in Counts 4 and 5 consequently fail as well and the first and second accused are accordingly discharged and acquitted.

The first and second accused persons are convicted for the offence of conspiracy and discharged and acquitted on other counts.

That is the judgment of this Tribunal.

[1999] 9 N.B.L.R. (FAILED BANKS TRIBUNAL, ZONE I, KANO)


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Federal Republic of Nigeria v Savannah and Chemical Industries Ltd and others

FAILED BANKS TRIBUNAL, ZONE I, KANO ATIKU J Date of Judgment: 8 MARCH, 1999 Suit No.: FBT/KNZ.1/CR/5/96

Banking – Manager extending financial accommodation or credit facility contrary to the bank’s rules and regulations – Section 19(1) Failed Banks (Recovery of Debts) and Finan-cial Malpractices in Banks Decree No. 18 of 1994 (as amended) – What prosecution must prove Criminal law and procedure – Conspiracy – How estab-lished Dishonoured cheques – Obtaining credit by means of cheque when funds insufficient in account section 1(1) and (2) of the Dishonored Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990 Evidence – Expert evidence – Attitude of court Facts The three accused persons were arraigned before the Zone 1 of the Failed Banks Tribunal, Kano on 9 October, 1996 and charged with three offences involving fraud.

Then on 29 October, 1996, consequent upon an applica-tion by the prosecution, the charge was amended. Under the amended charge the accused were charged with the follow-ing offences:–

“First Head of Charge:– That you, Mr Frank Ezeokoli, formerly a staff of Commercial Trust Bank Limited and Manager of the Aba branch of the Bank and you Chief George Nwachukwu Ebon, Chairman and Manag-ing Director of Savannah and Chemical Industries Limited be-tween the period November, 1994 to November, 1995 conspired to defraud Commercial Trust bank Limited by inducing the Bank to issue various drafts, cheques in favour of third parties totalling N63,455,188.29k (Sixty-three Million, Four Hundred and Fifty-five Thousand, One Hundred and Eighty-eight Naira, Twenty-nine


Federal Republic of Nigeria v. Savannah and Chemical Industries 285

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Kobo only) and thereby securing credit for Savannah and Chemi-cal Industries Limited by false pretence or fraudulent means, an offence contrary to section 419A of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 and thereby committed an offence contrary to section 516 of the Criminal Code and punish-able under the same section. Second Head of Charge:– That you, Savannah and Chemical Industries Limited being a company incorporated in Nigeria and you George Nwachukwu Ebon, being Chairman and Managing Director of Savannah and Chemical Industries Limited between November, 1994 and No-vember, 1995 made various lodgments of cheques in the account of the Savannah and Chemical Industries Limited maintained with Commercial Trust Bank Nigeria Limited, Aba Branch, and in-duced the Bank to issue various bank drafts in favour of third par-ties totalling N63,455,188.29k (Sixty-three Million, Four Hundred and Fifty-five Thousand, One Hundred and Eighty-eight Naira Twenty-nine Kobo only) when you knew and had reason to know that the cheques would be returned unpaid and were returned un-paid, thereby securing for Savannah and Chemical Industries Lim-ited credit by fraud or false pretence and with intent to defraud Commercial Trust Bank Nigeria Limited and thereby committed an offence contrary to section 419(A) of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 and punishable under the same section. Third Head of Charge:– That you, Savannah and Chemical Industries Limited being a cus-tomer of Commercial Trust Bank, Aba Branch at various times be-tween the period November, 1994 and November, 1995 made vari-ous lodgements of cheques in your account with the bank and thereby inducing the bank to issue various draft cheques on your instruction in favour of third parties totalling N63,455,188.29k (Sixty-three Million, Four Hundred and Fifty-five Thousand, One Hundred and Eighty-eight Naira, Twenty-nine Kobo only), when you knew or had reason to know that no funds were standing to your credit in your accounts with the banks on which the said cheques were drawn, thereby committed an offence contrary to section 1(1) and (2) of the Dishonoured Cheques (Offences Act) Cap 102 Laws of the Federation of Nigeria, 1990 and punishable under the same section. Fourth Head of Charge:– That you, Chief George Nwachukwu Ebon being Chairman and Managing Director of Savannah and Chemical Industries Limited between the periods November, 1994 and November, 1995 caused



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or were aware of various lodgments maintained with the Com-mercial Trust Bank Nigeria Limited, Aba Branch and thereby inducing the bank to issue various bank drafts, cheques in favour of third parties totalling N63,455,188.29k (Sixty-three Million, Four Hundred and Fifty-five Thousand, One Hundred and Eighty-eight naira, Twenty-nine Kobo only) when you knew and had reason to know that no funds were standing to the credit of Savannah and Chemical Industries Limited in the banks on which the cheques were drawn and thereby committed an offence contrary to section 1(1) and (2) of the Dishonoured (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990 and punishable under the same section. Fifth Head of Charge:– That you, Chief George Nwachukwu, being Chairman and Man-aging Director of Savannah and Chemicals Industries Limited aided or Counseled, procured and conspired with one Mr Frank Ezeokoli the then Branch Manager of the Aba Branch of Com-mercial Trust Bank Limited to willfully and recklessly extend fi-nancial accommodation/credit to Savannah and Chemicals Indus-tries Limited a customer of the bank to the tune of N63,455,188.29k (Sixty three million, four hundred and fifty five thousand, one hundred and eighty eight naira twenty nine kobo only) by giving immediate value to uncleared cheques presented by the customer in contravention of the banks rules and regula-tions an offence under section 19(1) of the Failed Banks Decree No. 18 of 1994 and thereby committed an offence contrary to sec-tion 83(4) and punishable under section 20(1) of the same Decree. Sixth Head of Charge:– That you, Mr Frank Ezeokoli formerly a staff of Commercial Trust Bank Limited and Manager of the Aba Branch of the bank and while acting in that capacity between the period November, 1994 to November, 1995 willfully and recklessly extended finan-cial accommodation/credit facility to the tune of N63,455,188.29k (Sixty-three Million, Four Hundred and Fifty-five Thousand, One Hundred and Eighty-eight Naira, Twenty-nine Kobo) to Savannah and Chemical Industries Limited a customer to the bank by giving immediate value to uncleared cheques presented by the customer in contravention of the banks rules and regulations and thereby committed an offence contrary to section 20 of the same law.”

The gist of the evidence against the accused was that the third accused being a Manager of Aba branch of Commercial Trust Bank Limited granted direct credit to the first accused company of which the second accused was the Chairman and



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Managing Director, to the tune of N63,455,188.29k when in actual fact the company had no such funds in its account.

As a matter of fact the cheques issued by the company came back dishonoured, and when they were returned, the third accused either suppressed them and in some cases the cheques were not sent for clearing.

The accused in their defence said, inter alia, that before the account of the first accused was opened at Aba Branch of the bank, the management of the bank had given an approval to the grant of direct or immediate credit, that the Internal Guidance Line Facilities of the bank embraced direct as well as immediate credit facilities and that the prosecution had not adduced sufficient evidence to show that the cheques were returned on grounds of lack of funds.

Section 419A and B of the Criminal Code provides:– “419(A) Any person who by any false pretence or by means of

any other fraud obtains for himself or any other per-son:–

a. In incurring any debt or liability b. By means of an entry in a debtor or creditor ac-

count between the person giving and the person re-ceiving the credit is guilty of a felony and is liable to imprisonment for three years.”

“419(B) Where in any proceedings for an offence under section 419 or section 494 it is proved that the accused:–

(a) obtained or induced the delivery of anything capa-ble of being stolen, or

(b) obtained credit for himself or any person, by means of a cheque that when presented for payment within a reasonable time, was dishonoured on the ground that no funds or insufficient funds were standing to the credit of the drawer of the cheque in the bank on which the cheque was drawn, the thing or its delivery shall be deemed to have been ob-tained or induced or the credit shall be deemed to have been obtained by a false pretence unless the court is satisfied by evidence that when the accused issued the cheque he had reasonable grounds for believing and did in fact believe that it would be honoured if presented for payment within a reason-able time after its issue to him.”



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Held – 1. To obtain a conviction under section 419A, the prosecu-

tion must prove the following elements:– (1) that credit had been obtained by the accused for

himself or for another person; (2) that the credit was obtained by false pretence or

other means of fraud of the accused person; and (3) that the credit was obtained by means of a cheque. It will be a defence if the accused adduces evidence to

show:– (1) that the cheque was not presented within a reason-

able time; or (2) that the accused had reasonable grounds for believ-

ing and did in fact believe that the cheque would be honoured if presented for payment within a reason-able time after its issue by the accused.

2. Per curiam “Looking at the evidence adduced, it is apparent that the

prosecution have been able to show:– (1) That the second accused, lodged various cheques at

CTB, Aba. See exhibits A, B43, B1 to B27, exhibit J and the testimonies of PW1 and PW3 which I strongly believe especially having regard to exhibits B1 to B27 and B33.

(2) That based on those cheques the second accused got credit for the use of the first accused. See exhibits B to B28, B43 and the oral testimony of PW2 who during his evidence in chief of 13 February, 1997 regarding exhibit B43 said inter alia. ‘This is the statement of account of the first accused Savannah and Chemicals. A review of this statement shows that most credit en-tries posted in the customers statement were either given same day value or next day value’. See also the statement of the second accused exhibit E and E1.

(3) The cheques were subsequently returned unpaid see exhibits B to B27, exhibit A schedule II, exhibit J and the oral testimony of PW1 and PW3.

(4) That when the cheques and other instruments were lodged, see exhibits B to B27 and exhibit J, there were



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no funds in the accounts on which the cheques or other instruments were drawn.

(5) That some of the cheques lodged, though given value by the bank, were not even presented for clearance (see exhibits B3, B7, B8, B9, B11, B16 and B17).

(6) That as at the time of investigation, neither the police nor the PW1 and PW3 were shown an approval for fa-cility for the first accused from the head office. This is apparent from the oral testimony of PW1 in examina-tion in chief of 13 February, 1997 where he stated:–

‘During our investigation we were not presented with any head office approval on a facility in re-spect of Savannah and Chemical, the first ac-cused’. The Chairman did not refer to the monthly performance reports.

(7) That even going by exhibit PW38, there was no author-ity for the bank to grant up to N63 million by way of immediate credit to the first accused.

(8) That it is also in evidence when the cheques for which an immediate value was given to them were returned, un-paid, the bank, instead of debiting the account of the first accused they would debit some other nominal accounts within the branch and thereby giving a wrong picture of the true position of the account of the first accused. This is clear from the oral testimony of PW1 of 11 February, 1997 where he said among other things:–

‘In the case of the cheques under question, the Branch did not debit the customer’s account. In-stead they debited some other nominal accounts in the Branch thereby giving a false statement of ac-counts position in respect of the customer.’

From the foregoing, it is in evidence that credit of up to the tune of N63 million which the first accused was al-lowed to enjoy even though it had no sufficient funds as at the time material, was induced by false pretence.”

3. (1) The mens rea of the offence of conspiracy is the meeting of the minds of the conspirators which is often incapable of direct proof.

(2) The overt act or omission of each conspirator is the actus reus which must be referable and very often is the only proof of the criminal agreement.



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(3) To prove conspiracy, it is not necessary that the conspirators be seen together coming out of the same place at the same time.

(4) Conspirators need not have started the conspiracy together at the same time because a conspiracy started by some persons may be joined at a later stage by others.

(5) In every case of conspiracy, it is the duty of the court to ascertain evidence of complicity of the ac-cused persons in the offence.

4. Per curiam “It is the argument of the third accused person that he did

not act in concert with the second accused person to de-fraud CTB and that it would amount to speculation if ex-hibit DW1D is acted upon.

It was also the submission and argument of the defence that the issue of granting credit facilities to the first accused was not within his schedule of duties as his power was limited to credit and marketing department of CTB Aba Branch and the grant of such credit facility within the exclusive powers of the operations department over which he has no control. It is however clear from the evidence adduced so far by the prosecution:–

(1) That the second accused has confirmed writing exhibit DW1D.

(2) The third accused has recognised exhibits B to B27 as the returned cheques on the account of the first ac-cused at CTB, Aba Branch.

(3) The third accused has agreed to have assisted in open-ing the account of the first accused at CTB, Aba Branch.

(4) The third accused admitted collecting cheques for lodgements into the account of the first accused at CTB Aba, through one Mr Dennis Philips the Com-mercial Director of the first accused.

(5) The third accused has also admitted as having dealt with the second accused on four occasions in respect of the opening of the account of the first accused.

(6) The third accused has denied being a figurehead branch manager of CTB Aba under cross examination.



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It has been shown that facilities granted the first accused were fraudulently obtained and it has been shown that the second accused was the actor behind the presentation of the cheques which were returned unpaid at the time the third accused was the Branch Manager. Even though the third accused has claimed that the grant of the credit facility was authorised by the Head office under the I.G.L. scheme, the limit of N10 mil-lion in exhibit DW39 was not adhered to. When the cheques were returned unpaid (exhibits B to B27 and the instruments listed in exhibit J, they were suppressed and that instead of debiting the account of the first accused, different accounts were debited. All these go to show that the third accused was acting in concert with the second accused. It shows both the second and third accused were acting on a common purpose and a common goal. The acts of the two accused persons clearly shows abundant evidence of conspiracy.”

5. Sections 1 and 2 of the Dishonoured Cheques (Offences) Act create offence of strict liability while the actus reus operates in isolation and renders mens rea irrelevant.

6. To establish a charge under the Dishonoured Cheques (Offences) Act the prosecution must prove:–

(1) that accused person obtained credit for himself or any other person;

(2) that the accused did so by means of issuance of a cheque; and

(3) that when presented the cheques were returned un-paid.

Per curiam “From the evidence adduced by the prosecution, it has been

shown:– (1) That the second accused lodged various cheques into

the account of the first accused with CTB Aba (see ex-hibits B to B27, exhibit A and exhibit J).

(2) That the first accused was granted credit on lodge-ments of those cheques see exhibit B43.

(3) That some of those cheques were returned unpaid (see exhibits B to B24, exhibits A and J. The second ac-cused has not shown that he had reasonable grounds for believing and did believe in fact that the cheques would be honoured instead he gave two different sto-ries, in one instance he claimed to have stopped the



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cheques deliberately (see exhibits E and E1) in another he claimed to have instructed the third accused not to present them at once. In the circumstance the first and second accused are found guilty as charged under both section 1 of the Dishonoured cheques (Offenses Act) and convicted accordingly.”

7. To establish the offence under section 19(1)(c) of the Failed Banks Decree against the accused, the prosecu-tion must show that:–

(a) the accused was an officer or manager of a bank (b) that he knowingly, recklessly, negligently or other-

wise granted credit facility, loan, advance or other financial accommodation to any other person

(c) in doing so the accused acted contrary to the regula-tions or procedure of the bank.

Per curiam “One of the important ingredients here is the availability of

rules and regulations. In their defence, it has been argued that there were no rules and regulations governing grant of credit facilities and that exhibit J5 tendered by Mr Karaye does not carry any weight as it has no foundation. It is clear from the evidence of PW1, PW2 and PW3 that the third accused acted in violation of the rules and regulation of the bank in granting immediate credit to the first accused and exhibit J5 was ten-dered in support. It is not clear however as to whether these rules and regulations were inforce at the times material for Mr Karaye did not say anything apart from tendering the said document. There is therefore doubt as to its operation date. In the circumstances, one of the important ingredients of the of-fences under section 19(1)(c) of the Failed Banks Decree, 1994 is weak and as such the Tribunal should lean in favour of the accused persons. Consequently, the second and third accused are discharged under 5th and 6th Heads of charge.”

Convicting the accused.


Nigerian FRN v Kalgo (1998) 2 F.B.TLR 14 Njovens v State (1973) 5 SC 17



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Nigerian statutes referred to in the judgment Criminal Code Act Cap 77 Laws of the Federation of Nige-ria, 1990, section 419A, 419B Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990, sections 1, 2 Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), section 19(1)

Counsel For the prosecution: Mr Rotimi Rowland For the first and second accused: Mr Abdullahi For the third accused: Mr Asika

Judgment ATIKU J: The three accused persons were arraigned before this tribunal on 9 October, 1996 and charged with three of-fences involving fraud.

Then on 29 October, 1996, consequent upon an application by the prosecution, the charge was amended. Under the amended charge the accused were charged with the follow-ing offences:–

“First Head of Charge:– That you, Mr Frank Ezeokoli, formerly a staff of Commercial Trust Bank Limited and Manager of the Aba branch of the Bank and you Chief George Nwachukwu Ebon, Chairman and Manag-ing Director of Savannah and Chemical Industries Limited be-tween the period November, 1994 to November, 1995 conspired to defraud Commercial Trust bank Limited by inducing the Bank to issue various drafts, cheques in favour of third parties totalling N63,455,188.29k (Sixty-three Million, Four Hundred and Fifty-five Thousand, One Hundred and Eighty-eight Naira, Twenty-nine Kobo only) and thereby securing credit for Savannah and Chemi-cal Industries Limited by false pretence or fraudulent means, an offence contrary to section 419A of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 and thereby committed an offence contrary to section 516 of the Criminal Code and punish-able under the same section.


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Second Head of Charge:– That you, Savannah and Chemical Industries Limited being a company incorporated in Nigeria and you George Nwachukwu Ebon, being Chairman and Managing Director of Savannah and Chemical Industries Limited between November, 1994 and No-vember, 1995 made various lodgments of cheques in the account of the Savannah and Chemical Industries Limited maintained with Commercial Trust Bank Nigeria Limited, Aba Branch, and in-duced the Bank to issue various bank drafts in favour of third par-ties totalling N63,455,188.29k (Sixty-three Million, Four Hundred and Fifty-five Thousand, One Hundred and Eighty-eight Naira Twenty-nine Kobo only) when you knew and had reason to know that the cheques would be returned unpaid and were returned un-paid, thereby securing for Savannah and Chemical Industries Lim-ited credit by fraud or false pretence and with intent to defraud Commercial Trust Bank Nigeria Limited and thereby committed an offence contrary to section 419(A) of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 and punishable under the same section. Third Head of Charge:– That you, Savannah and Chemical Industries Limited being a cus-tomer of Commercial Trust Bank, Aba Branch at various times between the period November, 1994 and November, 1995 made various lodgements of cheques in your account with the bank and thereby inducing the bank to issue various draft cheques on your instruction in favour of third parties totalling N63,455,188.29k (Sixty-three Million, Four Hundred and Fifty-five Thousand, One Hundred and Eighty-eight Naira, Twenty-nine Kobo only), when you knew or had reason to know that no funds were standing to your credit in your accounts with the banks on which the said cheques were drawn, thereby committed an offence contrary to section 1(1) and (2) of the Dishonoured Cheques (Offences Act) Cap 102 Laws of the Federation of Nigeria, 1990 and punishable under the same section. Fourth Head of Charge:– That you Chief George Nwachukwu Ebon being Chairman and Managing Director of Savannah and Chemical Industries Limited between the periods November, 1994 and November, 1995 caused or were aware of various lodgments maintained with the Com-mercial Trust Bank Nigeria Limited, Aba Branch and thereby inducing the bank to issue various bank drafts cheques in favour of third parties totalling N63,455,188.29k (Sixty-three Million, Four Hundred and Fifty-five Thousand, One Hundred and Eighty-eight naira, Twenty-nine Kobo only) when you knew and had


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reason to know that no funds were standing to the credit of Savan-nah and Chemical Industries Limited in the banks on which the cheques were drawn and thereby committed an offence contrary to section 1(1) and (2) of the Dishonoured (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990 and punishable under the same section. Fifth Head of Charge:– That you, Chief George Nwachukwu, being Chairman and Manag-ing Director of Savannah and Chemicals Industries Limited aided or Counseled, procured and conspired with one Mr Frank Ezeokoli, the then Branch Manager of the Aba Branch of Com-mercial Trust Bank Limited to willfully and recklessly extend fi-nancial accommodation/credit to Savannah and Chemicals Indus-tries Limited a customer of the bank to the tune of N63,455,188.29k (Sixty three million, four hundred and fifty five thousand, one hundred and eighty eight naira twenty nine kobo only) by giving immediate value to uncleared cheques presented by the customer in contravention of the banks rules and regula-tions an offence under section 19(1) of the Failed Banks Decree No. 18 of 1994 and thereby committed an offence contrary to sec-tion 83(4) and punishable under section 20(1) of the same Decree. Sixth Head of Charge:– That you, Mr Frank Ezeokoli formerly a staff of Commercial Trust Bank Limited and Manager of the Aba Branch of the bank and while acting in that capacity between the period November, 1994 to November, 1995 willfully and recklessly extended financial ac-commodation/credit facility to the tune of N63,455,188.29k (Sixty-three Million, Four Hundred and Fifty-five Thousand, One Hundred and Eighty-eight Naira, Twenty-nine Kobo) to Savannah and Chemical Industries Limited a customer to the bank by giving immediate value to uncleared cheques presented by the customer in contravention of the banks rules and regulations and thereby committed an offence contrary to section 20 of the same law.”

In support of the case for the prosecution, three witnesses testified for the prosecution and some documents tendered. On their part, the second and third accused persons gave evidence in their own defence and called one witness.

PW1:– MR Raji Oyebowale Rafiu – The first witness for the prosecution was Mr Raji Oyebowale Rafiu who is a banker by profession with Gulf Bank (Nigeria) Limited. PW1 says he joined Gulf Bank in August, 1996 but prior to that he was with Commercial Trust Bank (“CTB”) as its


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Acting Chief Inspector. PW1 states that as Ag. Chief Inspec-tor of CTB he was in charge of implementing the control set up by the management and ensuring their compliance which included reconciliation of accounts of the bank (CTB). PW1 says he knows all the three accused persons. The witness says the first accused is a customer of CTB while the second ac-cused, Chief George Nwachukwu is the Managing Director (“MD”) and Chairman of the first accused. The witness ex-plains that the third accused, Mr Frank Ezeokoli, was the Aba Branch Manager of CTB. The witness further revealed that in November, 1995, he was assigned by John Hill, to proceed to Aba Branch of CTB in order to investigate a complaint re-ceived from the first accused against the third accused in which the first accused alleged that the sum of N9 million had been taken from his account by the Branch Manager of the Branch. PW1 states that pursuant to his Managing Direc-tor’s directive he went to Aba in the company of one Mr Da-vies Osito, a staff of CTB, where they conducted an investi-gation from 15 to 19 November, 1995. The witness says in the course of the investigation he had meetings with the sec-ond and third accused persons, he looked into the accounts of the first accused at CTB and other relevant transactions, documents as well as appropriate accounts linked with the transaction. The witness says on completion of the investiga-tion he wrote a report. The witness tendered this report and it is now exhibit A. After giving brief explanation on exhibit A, PW1 states that his findings were:– (1) That the complaint of N9 million theft by the first

accused was wrong. (2) The actual indebtedness of the first accused as at the

time of the investigation was N54,073,370.20k made up of:–

(a) N48.6 million returned cheques; (b) N2.5 million wrong credit; (c) N2,977,366.60k debit balance. On the N48.6 million indebtedness, PW1 states that be-tween January and August, 1995, the first accused lodged


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into its accounts and got immediate credit on the same day and subsequently the cheques were returned unpaid and that the list of these returned cheques is in Schedule II of exhibit A. PW1 says there was a breach of procedure as contained in the banks operational manual in that the management of CTB gave immediate value to the cheques in question with-out approval from the CTB Head Office. The witness also points out that when the cheques were returned unpaid, in-stead of the branch to debit the account of the first accused it debited some other nominal accounts and thereby giving a false pretence of the account of the first accused. The wit-ness said during the investigation, he demanded for the re-turned cheques but he could not get them and it was later that the third accused gave them to him in Lagos. PW1 gave the breakdown of the cheques as follows:– (1) The first twenty-five cheques – now exhibits B, B1 to B25.

These are reflected in Schedule II to exhibit A as the re-turned cheques whose total value is N48.6 million.

(2) Three other cheques now exhibits B25, B26 and B27 though debited to the account of the first accused but were not returned to them by the third accused person via an in-ternal memo now exhibit B30. PW1 says the first cheques in schedule II of the exhibit A is cheque no. 000457 for N6 million, it is dated 16 January, 1995 was returned to CTB, Aba, through an internal memo dated 17 May, 1995 which is now exhibit B28 and the cheque no. 014395 dated 7 Au-gust, 1995 for N1.5 million which is the last in schedule II of exhibit A was returned via debt No. 3950 of 27 February, 1995 now exhibit B29.

The witness also says during the investigation the second accused gave them a list of cheques allegedly not credited to the account and after receiving the list against the statement of account of the first accused, he came up with list of lodgments that were not reflected in accounts of the first ac-cused and this list is in Schedule I to exhibit A. The witness revealed that when the banks were requested to confirm whether they had actually released funds to CTB their re-sponse was in the negative except one. These responses are now exhibits B31 to B40 namely:– (1) Exhibit B31 – A letter from UBN dated 26 October,

1995.


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(2) Exhibit B32 – A letter from UTB, Reference No. UTB/KN/1697/95/MWH/SMD/MAY dated 15 De-cember, 1995.

(3) Exhibit B33 – A letter from BON Ref. No. AKR/SNA/055/1855/95 dated 15 December, 1995.

(4) Exhibit B34 – A letter from Savannah Bank dated 22 December, 1995.

(5) Exhibit B35 – A letter from UBA Ref. No. IKR/SECT/2398/96 dated 4 January, 1996.

(6) Exhibit B36 – A letter from BON Ref. No. INSP/HQ/CTB/DC1/EDF/HIE/96 dated 16 January, 1996.

(7) Exhibit B37 – A letter from Lion Bank dated 24 January, 1996.

(8) Exhibit B38 – A letter from TCB Ref. No. TCB/MMW/AKA/RI dated 31 January, 1996.

(9) Exhibit B39 – A photocopy of cheque no. KB102575 of 14 July, 1995 attached to exhibit B28.

(10) Exhibit B40 – A photocopy of cheque no. KB102976 of 31 July, 1995 attached to exhibit B38.

Turning to exhibit B36, PW1 says the response from BON, Ilorin was positive in that the cheque for N400,000 listed as Item 3 of exhibit B36 was found to have been cleared by CTB, Victoria Island, Lagos and the first accused had ob-tained value on 17 January, 1995. PW1 also states that from the response of the banks contacted it was found that the CTB did not obtain any value for the cheques listed in Schedule I of exhibit A and as such the claim by the first accused against the CTB was found to be untrue. The wit-ness further explains that on the submission of exhibit A and receipt of exhibits B to B27 the interim management Board invited the first accused to a meeting which was held on 1 December, 1995 and consequent upon that meeting a formal letter was sent to the first accused stating the position of CTB which in response the first accused made part payment of N6 million by cheque with a promise to pay the balance by the second week of January, 1996. PW1 reveals that


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consequent upon failure of the first accused to pay the bal-ance of its indebtedness, CTB sent a letter to it on 29 Janu-ary, 1996 for a meeting at the CTB Head Office in Lagos, and it was at the end of the meeting that the police invited the second accused for questioning.

From the totality of the evidence so far adduced, it is not in contention that the first accused was a customer of CTB and maintained an account with the Aba Branch of CTB from November, 1994 up to November, 1995. It is equally not in dispute that the second accused, Chief George Nwachukwu Ebon, is the Chairman and Managing Director of the first accused. It is also not in controversy that as at the time mate-rial the third accused, Mr Frank Ezeokoli, was the Aba Branch Manager of CTB. Again, there is no dispute that some transactions had taken place within the time material in the account of the first accused with CTB, Aba Branch. What is in controversy, however, is whether the accused persons are guilty of the offences for which they stood trial.

Looking at the charges for which the three accused were arraigned before this Tribunal the charges can be grouped into three classes or categories based on their features:– (a) Charges 1 and 2 which relate to obtaining credit by

false pretence under section 419 of the Criminal Code.

(b) Charges 3 and 4 which relate to offences under the Dishonoured Cheques (Offences) Act.

(c) Charges 5 and 6 which relate to extending financial accommodation or credit facility contrary to the banks rules and regulations.

Let me now take them one after the other. On First and Second Heads of Charge:–

First Head of Charge:– Those involved in the first Head of charge are the second and third accused persons. It is a charge of conspiracy to commit the offence of ob-taining credit by false pretence or other fraud contrary to


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section 516 of the Criminal Code. Section 419A of the Criminal Code reads thus:– “419(A) Any person who by any false pretence or by means of

any other fraud obtains for himself or any other per-son:–

(a) In incurring any debt or liability; (b) By means of an entry in a debtor or creditor ac-

count between the person giving and the person re-ceiving the credit is guilty of a felony and is liable to imprisonment for three years.”

“Section 419(B) provides :– Where in any proceedings for an offence under section

419 or section 494 it is proved that the accused:– (a) obtained or induced the delivery of anything capa-

ble of being stolen; or (b) obtained credit for himself or any person, by

means of a cheque that when presented for pay-ment within a reasonable time, was dishonoured on the ground that no funds or insufficient funds were standing to the credit of the drawer of the cheque in the bank on which the cheque was drawn, the thing or its delivery shall be deemed to have been obtained or induced or the credit shall be deemed to have been obtained by a false pretence unless the court is satisfied by evidence that when the ac-cused issued the cheque he had reasonable grounds for believing and did in fact believe that it would be honoured if presented for payment within a rea-sonable time after its issue to him.”

To sustain a charge under this section, the prosecution must prove the following elements:– (1) That credit had been obtained by the accused for

himself or for another person; (2) That the credit was obtained by false pretence or

other means of fraud of the accused person; (3) That the credit was obtained by means of a cheque. It will be a defence if the accused adduces evidence to show:– (1) That the cheque was not presented within a reason-

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(2) He, the accused had reasonable grounds for believ-ing and did in fact believe that the cheque would be honoured if presented for payment within a reason-able time after its issue by the accused.

With respect to the third accused he had no hand according to him, in the entire transaction giving birth to this case.

In summary the defence of the accused first, second and third is that:– (1) Before the account of the first accused was opened at

Aba Branch of CTB the management of CTB had given an approval to the grant of direct or immediate credit.

(2) That I.G.L “Internal Guidance Line Facilities” em-braces direct as well as immediate credit facilities.

(3) No money amounting to N63,455,188.29k was is-sued to a third party.

(4) That the prosecution has not adduced sufficient evi-dence to show that the exhibits B–B27 were returned on grounds of lack of funds.

(5) That exhibits B3, B7, B8, B11, B16 and B17 were never sent for clearance.

(6) The third accused has no connection whatsoever with exhibits B to B27.

Looking at the evidence adduced, it is apparent that the prosecution have been able to show:– (1) That the second accused, lodged various cheques at CTB,

Aba. See exhibits A, B43, B1 to B27, exhibit J and the tes-timonies of PW1 and PW3 which I strongly believe espe-cially having regard to exhibits B1 to B27 and B33.

(2) That based on those cheques the second accused got credit for the use of the first accused. See exhibits B to B28, B43 and the oral testimony of PW2 who during his evidence in chief of 13 February, 1997 regarding exhibit B43 said, inter alia. “This is the statement of account of the first accused Savannah and Chemicals. A review of this statement shows that most credit entries posted in the customers statement were either given same day value or next day value”. See also the statement of the second accused exhibits E and E1.


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(3) The cheques were subsequently returned unpaid see exhib-its B to B27, exhibit A schedule II, exhibit J and the oral testimony of PW1 and PW3.

(4) That when the cheques and other instruments were lodged, see exhibits B to B27 and exhibit J, there were no funds in the ac-counts on which the cheques or other instruments were drawn.

(5) That some of the cheques lodged, though given value by the bank, were not even presented for clearance see exhibits B3, B7, B8, B9, B11, B16 and B17.

(6) That as at the time of investigation, neither the police nor the PW1 and PW3 were shown any approval for facility for the first accused from the head office. This is apparent from the oral testimony of PW1 in examination in chief of 13 February, 1997 where he stated:–

“During our investigation we were not presented with any head office approval on a facility in respect of Sa-vannah and Chemical, the first accused”. The Chairman did not refer to the monthly performance reports.

(7) That even going by exhibit PW38, there was no authority for the bank to grant up to N63 million by way of immedi-ate credit to the first accused.

(8) That it is also in evidence when the cheques for which an immediate value was given to them were returned, unpaid, the bank, instead of debiting the account of the first ac-cused they debited some other nominal accounts within the branch and thereby giving a wrong picture of the true posi-tion of the account of the first accused. This is clear from the oral testimony of PW1 of 11 February, 1997 where he said among other things:–

“In the case of the cheques under question, the Branch did not debit the customer’s account. Instead they debited some other nominal accounts in the Branch thereby giving a false statement of accounts position in respect of the cus-tomer.”

From the foregoing, it is in evidence that credit of up to the tune of N63 million which the first accused was allowed to enjoy even though it had no sufficient funds as at the time material, was induced by false pretence. On the issue of conspiracy, the Supreme Court in Njovens v The State (1973) 5 SC. 17, has laid down the following principles as ingredients for establishing the offence of conspiracy:– (1) The mens rea of the offence of conspiracy is the

meeting of the minds of the conspirators which is of-ten incapable of direct proof.


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(2) The overt act or omission of each conspirator is the actus reus which must be referable and very often is the only proof of the criminal agreement.

(3) To prove conspiracy, it is not necessary that the con-spirators be seen together coming out of the same place at the same time.

(4) Conspirators need not have started the conspiracy together at the same time, because a conspiracy started by some persons may be joined at a later stage by others.

(5) In every case of conspiracy, it is the duty of the court to ascertain evidence of complicity of the accused persons in the offence.

It is the argument of the third accused person that he did not act in concert with the second accused person to defraud CTB and that it would amount to speculation if exhibit DW1D is acted upon.

It was also the submission and argument of the defence that the issue of granting credit facilities to the first accused was not within his schedule of duties as his power was lim-ited to credit and marketing department of CTB Aba Branch and the grant of such credit facility was within the exclusive powers of the operations department over which he has no control. It is however clear from the evidence adduced so far by the prosecution:– (1) That the second accused has confirmed writing ex-

hibit DW1D. (2) The third accused has recognised exhibits B to B27

as the returned cheques on the account of the first accused at CTB, Aba Branch.

(3) The third accused has agreed to have assisted in opening the account of the first accused at CTB, Aba branch.

(4) The third accused admitted collecting cheques for lodgements into the account of the first accused at CTB Aba, through one Mr Dennis Philips the Com-mercial Director of the first accused.


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(5) The third accused has also admitted as having dealt with the second accused on four occasions in respect of the opening of the account of the first accused.

(6) The third accused has denied being a figurehead branch manager of CTB Aba under cross-examination.

It has been shown that facilities granted the first accused were fraudulently obtained and it has been shown that the second accused was the actor behind the presentation of the cheques which were returned unpaid at the time the third accused was the Branch Manager. Even though the third accused has claimed that the grant of the credit facility was authorised by the Head office under the I.G.L. Scheme, the limit of N10 mil-lion in exhibit DW39 was not adhered to. When the cheques were returned unpaid (exhibits B to B27 and the instruments listed in exhibit J, they were suppressed and that instead of debiting the account of the first accused, different accounts were debited. All these go to show that the third accused was acting in concert with the second accused. It shows both the second and third accused were acting on a common purpose and a common goal. The acts of the two accused persons clearly shows abundant evidence of conspiracy. As the Su-preme Court stated in Njovens v State (supra) at pages 69–70:–

“. . . the overt act or omission which evidence conspiracy is the actus reus and the actus reus of each and every conspirator must be referable and very often is the only proof of the criminal agree-ment which is called conspiracy.”

On the question of the account involved, the evidence ad-duced by the prosecution shows that the CTB, Aba Branch through the account of the first accused was defrauded in the sum of N63 million. See exhibits B to B27, page 3 of exhibit J, and oral testimony of PW1 and PW3 whose evidence I strongly believed and whose evidence remains unassailable despite rigorous cross-examination. Looking at this unassail-able evidence side by side with testimony of DW1 who testi-fied for the first and second accused persons as financial ex-pert, it is trite that a court is entitled to accept the evidence of an expert if it is credible but such evidence is generally an


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aspect of the entire evidence to be evaluated by the court. (See FRN v Sheriff (1998) 2 F.B.TLR 109 at 182 paragraph 5.) Looking at the evidence of DW1 and the report tendered by him as exhibit DW1A, it would be seen that:– (1) He confined his investigation to the information,

written and verbal, he got from the staff of the first accused (see in particular pages 2 to 3 of exhibit DW1A).

(2) He gives the opinion that the first accused could re-fuse the debits made to their account for the 28 re-turned cheques amounting to N51.1 million on the ground that the clearing period has elapsed (see page 8 of exhibit DW1A).

(3) He described CTB as dishonest (See paragraph (d) of page 12 of exhibit DW1A, yet there was no attempt to hear anything from the CTB.

To my mind therefore, both the oral testimony and exhibit DW1A lack any evidential value. The duty of the prosecu-tion is to prove the case against the accused beyond any rea-sonable doubt, section 138 of the Evidence Act. From the evidence adduced, the prosecution has discharged this bur-den with respect to the first charge.

In consequence the second and third accused are found guilty as charged under the first head of charge. On The Second Head of Charge:– Those involved in this second head of charge are the first and second accused. To establish this offence, it is the duty of the prosecution to show:– (1) that credit has been obtained by the accused persons

or for another person. (2) that the credit was obtained by means of false pre-

tence or other means of fraud of the accused. To dislodge the prosecution’s case, the defence must show:– (1) the cheque was not presented within a reasonable

time; or


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(2) that the accused had reasonable grounds for believ-ing and did in fact believe that it would be honoured if presented for payment within a reasonable time af-ter its issue by him.

The presumption of law under section 419B is that a credit is obtained by false pretence if it was obtained by means of a cheque which when presented within a reasonable time for payment was returned unpaid on grounds of lack of funds or insufficiency of funds:–

From the evidence adduced by the prosecution, it has been revealed:– (1) That the first accused maintained an account no.

3214005221 with CTB, Aba Branch (See also ex-hibit B43 A and J).

(2) It has also been shown that the second accused in his capacity as the Managing Director of the first ac-cused lodged a number of cheques with CTB Aba Branch for which credit was given in favour of the first accused (see exhibits A, J and DW1D).

(3) That these cheques and other instruments lodged by the second accused for which the first accused en-joyed credits from CTB, Aba, were returned unpaid (see exhibits A, Schedule I and II exhibit J and ex-hibits B to B27).

(4) That the bank CTB, as a result of those lodgments was defrauded to the tune of N63 million.

The second accused has not denied lodging these cheques. The oral evidence of PW1, PW2, PW3 and DW3 strengthens this issue of lodgements. So even if the management of CTB had agreed that credit facility be granted to the first accused, can-not be ground for lodging 28 cheques, exhibits B to B27 which eventually were returned unpaid for lack of funds. Even under the said IGL programme that limit placed was just N10 mil-lion and as such it cannot be used as a basis for granting over N63 million. It seems to me therefore from the totality of the evidence that the second head of charge has also been proved beyond reasonable doubt. Consequently, the first and second accused persons’ are found guilty as charged.


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The Third and Fourth Heads of Charge:– Those involved in this charge are first and second accused

persons. It is to be noted that sections 1 and 2 of the Dishon-oured Cheques (Offences) Act create offence of strict liabil-ity while the actus reus operates in isolation and renders mens rea irrelevant. (See FRN v Kalgo (1998) 2 F.B.TLR 14 at 55.) To establish the offence the prosecution must show:– (1) that the accused person obtained credit for himself or

any other person; (2) that the accused did so by means of issuance of a

cheque; (3) that when presented, the cheques were returned un-

paid. From the evidence adduced by the prosecution, it has been shown:– (1) That the second accused lodged various cheques into

the account of the first accused with CTB Aba (see exhibits B to B27, exhibit A and exhibit J).

(2) That the first accused was granted credit on lodge-ments of those cheques see exhibit B43.

(3) That some of those cheques were returned unpaid (see exhibits B to B24, exhibits A and J).

The second accused has not shown that he had reasonable grounds for believing and did believe in fact that the cheques would be honoured, instead he gave two different stories, in one instance he claimed to have stopped the cheques deliberately (see exhibits E and E1) in another he claimed to have instructed the third accused not to present them at once. In the circumstance the first and second ac-cused are found guilty as charged under both section 1 of the Dishonoured Cheques (Offences Act) and convicted accord-ingly. Fifth and Sixth Head of Charge:–

These involved the second and third accused persons. Both charges are under section 19(1)(c) of the Failed Banks


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Decree No. 18 of 1994 as amended and punishable under section 20(1) of the Decree. To establish the offence against the third accused, the prosecution must show that:– (1) The accused was an officer or manager of a bank. (2) That he knowingly, recklessly, negligently or other-

wise granted credit facility, loan, advance or other financial accommodation to any other person.

(3) In doing so the accused acted contrary to the regula-tions or procedure of the bank.

With respect to the second accused, the prosecution must show that he aided or abated or counselled, pressured or conspired with the third accused. It seems to me that the charges relate to the grant of credit facility to the first ac-cused amounting to N63,455,188.91. They seem to me to be a duplication of the first and second heads of charge.

One of the important ingredients here is the availability of rules and regulations. In their defence, it has been argued that there were no rules and regulations governing grant of credit facilities and that exhibit J5 tendered by Mr Karaye does not carry any weight as it has no foundation. It is clear from the evidence of PW1, PW2 and PW3 that the third ac-cused acted in violation of the rules and regulation of the bank in granting immediate credit to the first accused and exhibit J5 was tendered in support. It is not clear however as to whether these rules and regulations were inforce at the times material for Mr Karaye did not say anything apart from tendering the said document. There is therefore doubt as to its operation date. In the circumstances, one of the im-portant ingredients of the offences under section 19(1)(c) of the Failed Banks Decree No. 18 of 1994 is weak and as such the Tribunal should lean in favour of the accused persons. Consequently, the second and third accused are discharged under fifth and sixth heads of charge.

Thus, the first accused is found guilty under the second and third Heads of Charge and convicted, accordingly. The second accused is found guilty under the first, second and fourth Heads of Charge and convicted accordingly. While


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the third accused is found guilty under the first head of charge only. While the second and third accused are dis-charged under the fifth and sixth Heads of Charge respec-tively.

Mr Asika – We want to make a plea of allocutus. Mr Abdullahi – We would like the Tribunal to temper justice

with mercy in respect of the first and secondaccused. The first accused is a company thatcaters for more than a thousand Nigerians.We urge the Tribunal to take the interest ofthose more than one thousand Nigerians. Inrespect of the second accused, I urge the Tri-bunal to temper justice with mercy. He is abusinessman who contributed to the devel-opment of this country. The maximum isthree years prior to the grant of bail, the sec-ond accused has been in detention since1996. He also spent several months in policecell. By the eighth month per year calcula-tions, he has spent three years in detention.The second accused has also suffered sepa-ration from his works and family. He hasalso learnt his lesson. I therefore urge theTribunal to give him a sentence of fine inlieu of imprisonment and the fine should belight. The state does not benefit from im-prisonment of person.

On Forfeiture:– I submit that court should not order same against the accused because they were not convicted under the Failed Banks Decree, upon which the prosecution based their application for forfeiture. In addition, the sentence of fine without an order for forfeiture for the accused persons. A refusal of order for forfeiture does not preclude the right of the complainant to bring a civil suit for recovery that is all on our part I wish to make the following:–

(1) The third accused did not benefit from the transaction there was no money at all.

(2) He may be described as an overzealous worker. (3) It is all in evidence that he made frantic efforts to resolve

this matter. (4) He also came from his house to this Tribunal. (5) The third accused is a married man with kids. (6) He has also had an aged mother and father.


Atiku J


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(7) He was also in detention from 1996, for at least two years and 9 months before he was granted bail sometime in 1998.

(8) In view of the spirit of reconciliation which is going on throughout the country we urge the tribunal to temper jus-tice with mercy.

Mr Rotimi Row- – On the issue of sentence I leave it to land:– the discretion of the Tribunal. How-

ever, we apply that these properties pledged as security for bail be for-feited to NDIC. That is our humble application.

Tribunal:– – The case is adjourned to 8 March, 1999 for orders as to forfeiture and sentence.

Order as to Forfeiture and Sentence I have carefully considered the plea of the two learned de-

fence Counsel in mitigation of sentence as well as on the issue of forfeiture, I have equally examined the application of the prosecuting Counsel, Mr Rotimi Rowland, who held brief for Mr A.B. Hebnoud, regarding issue of the accused and the amount involved as well as section 20 of the Failed Banks Decrees No. 18 of 1994 as amended. The following shall be the orders of this Tribunal:– 1. Orders as to Forfeiture:– 1. The amount involved in first, second, third and fourth

Heads of Charges for which the accused were con-victed is N63,455,188.29k (Sixty Three Million, Four Hundred and Fifty Five Thousand, One Hundred and Eighty Eight Naira, Twenty Nine Kobo) which consti-tute a loss to the bank (Commercial Trust Bank).

2. On 14 August, 1998, when bail was granted to the second accused, two properties listed in exhibit 2, ti-tled “Interim Forfeiture of Properties” were forfeited to Nigeria Deposit Insurance Corporation (“NDIC”) in lieu of payment of half of the amount involved pending the outcome of the trial. The properties are:–

(a) Real Estate, Plant and Machinery situate at KLM 6, Onitsha – Owerri Road, Obosi-Onitsha, Regis-tered as 30/30/1247 Enugu, now Awka; and


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(b) A Mini Factory at Ibadan, Oyo State. 3. It is accordingly, ordered that these properties be

forfeited to the Nigeria Deposit Insurance Corpora-tion (“NDIC”) the liquidators for the benefit of Commercial Trust Bank (“CTB”)

4. The Nigeria Deposit Insurance Corporation shall dispose of these properties by public auction to-wards the sum of N63,455,188.29k.

5. The amount realised from the sales shall be applied by the Nigeria Deposit Insurance Corporation in line with their statutory duties and powers as liquidators of Commercial Trust Bank (“CTB”).

6. Any balance shall be held to the credit of the first and second accused persons and applied towards settlement of other monetary claims payable by the first and second accused persons.

2. Orders as to Sentence:– As indicated on 5 March, 1999 the first accused was

found guilty and convicted on the second and third Heads of Charge and the second accused was found guilty and convicted on the first, second and fourth Head of Charge and was not found guilty on the fifth Head of Charge while the third accused was found guilty and convicted on the first Head of Charge and was not found guilty on the sixth Head of Charge. Accordingly, the three accused per-sons are sentenced as follows:–

First accused:– The first accused is hereby sentenced as follows:–

(1) second head of charge – No impo-sition of fine having regard to the order of forfeiture.

(2) third head of charge – Fine of N5,000.

Second accused – Chief George Nwachukwu Ebon:– The second accused is hereby sentenced as follows:– (1) On first head of charge – Imprisonment for two

years beginning from 25 September, 1998.


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(2) On the second head of charge – Imprisonment for two years beginning from 25 September, 1998.

(3) On the fourth head of charge – Imprisonment for two years beginning from 25 September, 1998.

(4) On the fifth head of charge – Discharged. Third accused – Mr Frank Ezeokoli:– (1) On the first head of charge – Imprisonment for

two years beginning from 25 September, 1998. (2) on the sixth head of charge – Discharged Order:– The term of imprisonment are to run con-

currently in respect of the second accused, that is to say for the second accused, it is an imprisonment for two years commencing from 25 September, 1998.


Alhaji Bello Sanni Ali v. Federal Republic of Nigeria 313

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Alhaji Bello Sanni Ali v Federal Republic of Nigeria SPECIAL APPEAL TRIBUNAL, LAGOS AGBAJE, ODUNLAMI, JJ, BALONWU S.A.N. Date of Judgment: 9 MARCH, 1999 Suit No.: SAT/FBT/460/98

Failed Banks Tribunal – Criminal trials therein – Sentence – Effective date thereof – Need for warrant of commitment to show when sentence will commence – Whether trial Chair-man need state when sentence will commence Failed Banks Tribunal – Forfeiture of property of accused – Valuation thereof – Whether Special Appeal Tribunal can interfere with the order made by the Lower Tribunal thereto Judgment and Orders – Judgments of Court – Amendment of – Principles guiding Practice and Procedure – Judgment – Amendment thereof – “Slip Rule” – Principle applicable Special Appeal Tribunal – Forfeiture of property of accused – Lower Tribunal making order – Whether Special Appeal Tri-bunal can interfere Special Appeal Tribunal – Judgment of – Amendment of – Principle of “Slip Rule” – Applicability Facts The appellant was convicted by the Failed Banks Tribunal Zone IV, Lagos on 14 April, 1998 and was sentenced to two years imprisonment with hard labour without option of fine. (See Federal Republic of Nigeria v Ali (1998) 3 F.B.TLR 189).

The appellant appealed to the Special Appeal Tribunal on the sentence of two years imprisonment and forfeiture of his properties which was used as collateral for the loan.

The Special Appeal Tribunal held, inter alia, that the sen-tence was not excessive. (See Ali v FRN (1999) 1 F.B.TLR 14.)

The appellant now brought the present application at the Special Appeal Tribunal seeking for an order to state the



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commencement date of two years’ term of imprisonment imposed on the appellant; an order specifying the nature of the action to be taken by the parties to ascertain the value of the property of the appellant/applicant forfeited to the re-spondent and an order amending a portion of the judgment which states “N15.57M (Fifteen Million, Five Hundred and Seventy Thousand Naira) for the benefit of Intercity Bank Plc in view of the fact that the value of the amount involved in the offence charged is N23,070,000 and for which they can still be convicted and sentenced if they are found liable and still refused to pay”. Held – 1. A Judge or Court after making an order or giving a

judgment becomes functus officio and has no power to review such order or judgment, except in case of correc-tion of mistakes and accidental slip.

2. Under the principle of “Slip Rule”, an accidental slip in a judgment can be corrected if the amendment is not in-tended to vary the judgment which correctly represents what the Tribunal decided.

3. In the instant case, the portion of judgment referred to by the Counsel for the appellant/applicant should be cor-rected to show that “the N15.57M was the balance of money for the benefits of Intercity Bank Plc and not the valuation of the confiscated property”.

4. The Tribunal does not consider it necessary to stay the execution or further execution of the order forfeiting the property of the applicant covered by Certificate of Oc-cupancy No. L/ON/CON/RES/86/357 as the judgment of the Lower Tribunal has been affirmed. Further, it will serve no useful purpose to serve the application on Inter-city Bank Plc, Nigeria Deposit Insurance Corporation and Messrs M.S. Shehu and Brothers.

5. It is not open to the Special Appeal Tribunal to ascribe value to the property forfeited to the respondent. As the appeal was basically on the conviction and sentence of the applicant and the issue of the value of the property



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forfeited is in the realm of Civil Litigation which the learned Judge of the Lower Tribunal examined and pre-ferred the value given before it as shown in the Certifi-cate of Occupancy issued by the Kano State Government and his judgment had been affirmed.

Per curiam “This is a motion on notice seeking for an Order of the Tri-

bunal:– 1. To state the commencement date of two years’ term of

imprisonment imposed on the appellant. This Tribunal has held in Dr Odaro v NDIC (1992) 2

F.B.T.L.R 42 that the endorsement of Warrant of Commit-ment should show the time when the serving of the sentence was to commence. The appellant in the case should have been sent to custody by a Warrant of Commitment which will show the time the sentence was to commence hence it was not necessary for the Tribunal to state the time that the sentence was to commence.”


Nigerian Asiyanbi v Adeniji (1967) 1 All NLR 82 N.I.C.O.N v Power and Industrial Engineering Company Ltd (1990) 1 NWLR (Part 129) 697 Obanor v C.O.P (1959) WNLR 230 Obiora v Commissioner of Police (1990) 7 NWLR (Part 161) 222 Odaro v NDIC (1999) 2 F.B.TLR 42

Judgment ODUNLAMI J: This is a motion on notice seeking for an Or-der of the Tribunal:– 1. To state the commencement date of two years’ term

of imprisonment imposed on the appellant. This Tribunal has held in Dr Odaro v NDIC (1992) 2

F.B.T.L.R 42 that the endorsement of warrant of commitment should show the time when the serving


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of the sentence was to commence. The appellant in the case should have been sent to custody by a war-rant of commitment which will show the time the sentence was to commence hence it was not neces-sary for the Tribunal to state the time that the sen-tence was to commence.

2. An order of this Tribunal specifying the nature of the action to be taken by parties to ascertain the value of the property of the appellant forfeited to the respondent.

It is the view of this Tribunal that learned Counsel to the appellant is in a better position to know the nature of the action to be taken by the parties to ascertain the value of the property of the appellant that was confis-cated to the respondent especially as the parties rely on different valuation for the property. The appellant valued it N52M by virtue of exhibit 2 whilst exhibit F, the Deed of Legal Mortgage with Certificate of Occupancy No. LKN/CON/RES/86/357 registered as No. 63/63/30 in the Land Registry at Kano State and delineated by beacons Nos. KK 9516, KK 9518, KK 9519 and valued at N7.5M which, value the learned Judge, accepted.

3. The portion of the judgment which states “N15.57M” as the amount of valuation of the property mortgaged in which the Learned Trial Judge of the Lower Tribu-nal expressed the view that action could be taken for its recovery should have read as follows as shown on page 129 of the record of proceedings. “This is also without prejudice to any civil remedy that either the prosecution or the Nigeria Deposit Insurance Corpo-ration (“NDIC”) or even Intercity Bank Plc may wish to take against the three convicts to recover the bal-ance sum of N15.57M for the benefit of Intercity Bank Plc in view of the fact that the value of the amount involved in the offence charged is N23,070,000 and for which they can still be con-victed and sentenced if they are found liable and still refused to pay”.


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In view of the judgment of the Lower Court quoted above, it will be seen that the N15.57M referred to is the balance sum for the benefits of Intercity Bank Plc and not the amount of the valuation of the property mortgaged.

This is an accidental slip which can be corrected under the principle of “Slip Rule”.

The amendment is not intended to vary the judgment and does not vary the judgment which correctly represents what this Tribunal decided (See Asiyanbi v Adeniji (1967) 1 All NLR page 82 at page 88 and also National Insurance Cor-poration of Nigeria v Power and Industrial Engineering Company Ltd (1990) 1 NWLR (Part 129) page 697 at 908.)

In the case of Innocent Obiora v Commissioner of Police (1990) 7 NWLR (Part 161) page 222 at page 224 (fourth holden) it was held that a Judge or Court after making an or-der or giving a judgment becomes functus officio and has no power to review such order or judgment, except in case of correction of mistakes and accidental slip (see also Obanor v Commissioner (1959) WNLR page 230 paragraphs B–C.)

We are satisfied that the portion of judgment referred to by the Counsel for the appellant/mover should be corrected to show that “the N15.57M was the balance of money for the benefits of Intercity Bank Plc and not the valuation of the confiscated property”.

The third prayer asks for stay of execution of the Order forfeiting the property of the applicants, and the fourth prayer deals with leave to serve this application on:–

1. Intercity Bank Plc;

2. Nigeria Deposit Insurance Corporation; and

3. Messrs M.S. Shehu and Brothers.

This Tribunal does not consider it necessary to stay the exe-cution or further execution of the order forfeiting the prop-erty of the applicant covered by Certificate of Occupancy No. L/ON/CON/RES/86/357 as the judgment of the Lower


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Tribunal has been affirmed. Further it will serve no useful purpose to serve the people mentioned in the fourth prayer.

Learned Counsel for the applicant also stated in paragraph 3(b) of the affidavit to the motion that there is no direction or order by the Appeal Tribunal on the value of the appli-cant’s property forfeited to the respondent. We are of the view that it is not open to this Tribunal to ascribe value to the property forfeited to the respondent. It will be observed that the appeal basically is on the conviction and sentence of the applicant and the issue of the value of the property for-feited is in the realm of Civil Litigation which the Learned Judge of the Lower Tribunal examined and preferred the value given it as shown in the Certificate of Occupancy is-sued by the Kano State Government and his judgment has been affirmed.

In the circumstance, prayers 2–4 are refused and the mis-take or misquotation in respect of prayer one has been cor-rected under the principle of “Slip Rule”.

[1999] 9 N.B.L.R. (HIGH COURT, LAGOS STATE)

Sunday Adedapo Odutola v. Afribank Nigeria Ltd 319

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Sunday Adedapo Odutola v Afribank Nigeria Ltd

HIGH COURT, LAGOS STATE HUNPONU-WUSU J Date of Judgment: 12 MARCH, 1999 Suit No:. ID/158/92

Banking – Cheque – Bearing “pay cash” presented by bearer – Long delay by bank in honouring cheque – Cus-tomer asking for return of cheque in consequence thereof – Bank obliging – Whether return of cheque to bearer consti-tutes a wrongful dishonour Banking – Cheque – Wrongful dishonour – Damages – Where customer a businessman – Measure of Banking – Cheque – Wrongful dishonour – Principles appli-cable Banking – Cheque bearing “pay cash” wrongfully dishon-oured – Whether constitutes libel Damages – Wrongful dishonour of cheque of customer by bank – Customer a businessman – Measure of damages Facts The plaintiff in his writ of summons claimed:– 1. “the sum of N250,000 as general damages for the damage

done to the plaintiff’s reputation as a result of the defen-dant’s unjustifiable and inexcusable dishonour of the plain-tiff’s cheque no. LG/3141088 dated 6 February, 1991 for the sum of N1,000.

2. the sum of N200,000 as special damages for the loss sus-tained by the plaintiff in the course of his business as a re-sult of the defendant’s unjustifiable and inexcusable dis-honour of the plaintiff’s cheque no. LD/3141088 dated 6 February, 1991.”

Briefly put, this action was based on a customer/banker rela-tionship and the fact that defendant bank dishonoured the plaintiff’s Cheque No. LG/3141088 of 6 February, 1991 for an amount of N1,000 which he issued for encashment by his Secretary. The balance in the plaintiff’s personal account as



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at the time of issuance of the Cheque was N1,301.44. As a result of the Cheque being dishonoured the plaintiff lost the opportunity of buying goods as his purported seller was not willing to sell to him again. The plaintiff claimed that he in-curred a loss of N200,000 and was ridiculed and embarrassed by the act of the defendant. However the defendant bank maintained that the cheque was not dishonoured as such in that none of the usual features of dishonour was imparted on the cheque. Also had the plaintiff’s Secretary waited patiently enough she would have been paid moreso since there was sufficient funds in the plaintiff’s account though the plain-tiff’s account was classified as Branch 72 ie Dormant Ac-count. The plaintiff testified and called his Secretary as his witness while the defendant Bank also called two witnesses – a Senior Assistant General Manager and a credit officer.

Counsel for the defendant argued in the main that the cheque was not dishonoured wrongfully as the non-payment was as a result of the impatience of the bearer and con-tended that since the cheque bore “Pay Cash” and was not written in anybody’s name, nobody could have been libelled thereon.

Held –

1. The relationship between a banker and customer is that of principal and agent and the refusal by the banker to pay a cheque drawn on the banker by the customer amounts to a breach of contract for which the banker is liable in damages if the customer had enough funds at the time to satisfy the amount payable on the cheque. A cheque drawn on the banker by the customer represents the order of the principal to his agent to pay out of the principal’s money in his hands the amount stated on the cheque to the payee endorsed on the cheque.

2. When a bank credits the current account of its customer with a certain sum, the banker becomes a debtor to the customer in respect of that sum, and when a banker deb-its the current account of its customer with a certain sum, the customer becomes a debtor to the bank in



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respect of that sum. If any of the parties fails to honour a demand for payments the demanding party has a right to sue the defaulting party.

3. Per curiam “. . . the relationship between the plaintiff and the defendant

was that of banker/customer and it was contractual. The de-fendant had a contract with the plaintiff to honour all cheques presented to the defendant by the plaintiff when the plaintiff had sufficient funds in the said Account and there was nothing irregular about the cheque. The plaintiff had sufficient funds in his account, his cheque was presented but unfortunately it was given back to the payee because, according to the defendant, the payee was impatient in wanting to collect the cheque. There was contractual obliga-tion on the part of the defendant which the defendant had failed to meet, thereby giving rise to a breach of which the defendants are liable.”

4. The rule in Hadley v Baxendale in measuring damages is usually difficult to apply in cases of wrongful dishonour of cheques. Thus damages awarded for wrongful dishon-our of cheques by a banker are generally nominal except in circumstances recognised by law as exceptional:–

a. Where the person whose cheque is wrongfully dis-honoured is a trader.

b. Where the person whose cheque is wrongfully dis-honoured is in business whether or not slanderous acts or statement accompany such wrongful dishonour.

In these exceptional circumstances, actual damage need not be shown by the customer before substantial dam-ages are awarded. In all other cases, actual damage must be shown where substantial damages can be awarded.

5. In awarding general damages, a trial Judge must make his own assessment of the quantum of such damages. General damages must not be too high or too low or awarded on a wrong principle. Loss of expected profits should not be taken into consideration in the award of general damages and a person should not be compen-sated for any item never claimed.



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6. Per curiam “In making my own assessment of general damage I rely on

the evidence of the plaintiff that he had been in the furniture business for a long time and had been banking with the defen-dant then for more than fifteen years. The defendant would be vicariously liable for the fact of the cashier in returning the Cheque without an endorsement. I hereby award the sum of N100,000 as General Damages to the plaintiff. Consequently, therefore the claim of the plaintiff succeeds and Judgment is hereby given in favour of the plaintiff against the defendant in the sum of N200,000 as Special Damages for the wrongful dishonour of his cheque no. LH/3141088 on 6 February, 1991 by the defendant, also the sum of N100,000 is hereby awarded as general damages to the plaintiff.”

7. One of the essential ingredients of libel is publication through a document.

8. The defendant in this instance did not publish anything through any form of publication which would have li-belled the plaintiff and also nobody was called by the plaintiff to show that his character had been impugned by the said publication and that had brought him into contempt and disrepute before right thinking persons.

Finding for the plaintiff.


Nigerian Allied Bank of Nigeria Ltd v Akubueze (1997) 6 NWLR (Part 509) 374 Balogun v N.B.N. Ltd (1978) 3 SC 155 Egbuna v Amalgamated Press (1967) 1 All NLR 25 Okafor v Ikeanyi (1979) 3–4 SC 99 Royal Petroleum Co Ltd v FBN Ltd (1997) 6 NWLR (Part 510) 584 U.B.N. v Nwoye (1996) 3 NWLR (Part 435) 135 West African Shipping Agency (Nigeria) Ltd v Kalla (1978) 3 SC 21 Yesufu v ACB (1980) 1 SC 74



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Book referred to in the judgment Gatley on Libel and Slander (7ed) Article 221, page 103

Counsel For the plaintiff: A. Bisuga, Esq. For the defendant: G.B. Dalley, Esq.

Judgment HUNPONU-WUSU J: The plaintiff commenced this Suit with a writ of summons accompanied with a statement of claim. In the writ of summons, the plaintiff was claiming the sum of N250,000 as general damages for the damage done to the plaintiff’s reputation as a result of the defendant’s unjustifi-able and inexcusable dishonour of the plaintiff’s cheque no. LG/3141088 dated 6 February, 1991 for the sum of N1,000. (2) The sum of N200,000 as special damages for the loss sus-

tained by the plaintiff in the course of his business as a re-sult of the defendant’s unjustifiable and inexcusable dis-honour of the plaintiff’s Cheque No. LD/3141088 dated 6/2/91. There was a 12 paragraph Statement of Claim. The defendants were served and they filed a 3 paragraph State-ment of Defence which was later amended.

Briefly put, this action was based on a customer/banker rela-tionship and the fact that defendant bank dishonoured the plaintiff’s cheque no. LG/3141088 of 6 February, 1991 for an amount of N1,000 which he issued for encashment by his Secretary. The balance in the plaintiff’s personal account as at the time of issuance of the cheque was N1,301.44. As a result of the cheque being dishonoured the plaintiff lost the opportunity of buying goods as his purported seller was not willing to sell to him again. The plaintiff claimed that he in-curred a loss of N200,000 and was ridiculed and embar-rassed by the act of the defendant. However the defendant bank maintained that the cheque was not dishonoured as such in that none of the usual features of dishonour was im-parted on the cheque. Also had the plaintiff’s secretary waited patiently enough she would have been paid moreso since there was sufficient funds in the plaintiff’s account


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though the plaintiff’s account was classified as Branch 72 ie Dormant Account. The plaintiff testified and called his Sec-retary as his witness while the defendant Bank also called two witnesses – a Senior Assistant General Manager and a Credit Officer. The learned Counsel to the defendant/Bank G.B. Dalley, Esq. in his written addresses identified the fol-lowing issues for consideration:– 1. What is the Banker’s duty towards his customers? 2. What is the meaning of “Pay Cash” written on a cus-

tomer’s cheque? Could such a cheque if dishonoured and/or not paid Amount to libel?

3. What tantamounts to a cheque being dishonoured? 4. Could the defendant in the present circumstances be

said to have dishonoured the cheque ie exhibit A. 5. Could a withdrawn cheque or an unpaid cheque

without the usual inscription of dishonour or with inscription Pay “Cash” be deemed dishonoured as it were?

6. Could the plaintiff who issued his personal cheque and on whose behalf, the solicitor claimed he was acting for personally be regarded as a trader or a businessman?

7. If he were not a trader, what would he have to prove to show that the cheque exhibit A was dishonoured and as such, he was libelled?

8. Has the plaintiff proved any special and/or general damages in his pleadings as well as in his evidence so as to be entitled to any award?

In determining the duty of a banker to his customer in respect of cheque issued by the customer when the account was in credit, learned Counsel relied on the principles enunciated in: U.B.N. Ltd v Nwoye (1990) 2 NWLR (Part 130) page 106. For such to have been honoured, it must have been properly drawn and presented for payment. He relied on the evidence given by the second defence witness that the plaintiff’s account had been dormant for sometime which necessitated the account being classified as Branch 72. That transfer


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occasioned some delays in the processing of payment. But learned Counsel contended that the second plaintiff Witness did not exercise enough patience to enable the defendant sort out things. Learned Counsel further stressed that none of the usual inscription notices of dishonour was inscribed on the cheque when it was returned to the second plaintiff witness. He stressed that when the first plaintiff witness re-activated the said account after this incident, he was promptly paid. He argued that “Pay Cash” inscribed on a cheque meant “Pay Self ” ie pay directly to the owner of the Account and he relied on: I.B.W.A. v Kennedy Trans (Ins.) Ltd (1993) 7 NWLR (Part 304) pages 241–253 and contended that since the cheque bore “Pay Cash” and was not written in any-body’s name, nobody could have been libelled thereon. He then referred to the meaning ascribed to “publication” as contained in Gately on Libel and Slander – (7ed) article 221 page 103. He maintained that nobody could have been li-belled. He argued further that a cheque was said to be dis-honoured if after proper presentation normal endorsement was made by the bank and sufficient funds were in the said account but the Bank refused to pay on demand and such cheque was returned with the inscription “Refer to Drawer, signature irregular, etc”. But in the instant case nothing was shown to negate payment.

Learned Counsel contended further that the defendant could not be said to have dishonoured the payment of ex-hibit A in the face of the overwhelming evidence of first and second defence witnesses which preponderantly stressed that had the second plaintiff witness waited patiently she would have been paid. Also he argued that the second plaintiff wit-ness never discussed with the then Manager ie first defence witness who would have paid her. As to whether the cheque with the inscription of pay cash withdrawn by the second plaintiff witness be regarded as dishonoured and therefore libellous, the learned Counsel contended that in banking par-lance “Pay Cash” meant “Pay Self ” and an owner of a cheque could not libel himself. Learned Counsel then re-ferred to the plaintiff’s solicitors’ letter ie exhibit B


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wherein the plaintiff was described as a trader and business-man and stressed that there were no amplification as to how the reputation of the plaintiff was injured with reference to a third party. He argued that the plaintiff did not lead evidence to show how he was ridiculed and embarrassed before his guests/visitors. Learned Counsel contended that for the claim for damages to succeed in an action of this nature, the plaintiff must prove his claim specifically as was stated in: Gibbons v Westminister Bank (1939) 2 KB 882 which was adopted by Idigbe, JSC in Balogun v N.B.N. Ltd (1993) NWLR (Part 304) P. 241 and Oyewole v Standard Bank (1968) 2 All NLR 32. And contended that the plaintiff led no evidence to the fact that he was a trader or in some business. Special damages must be strictly proved and where there was no evidence to support a claim for damages, such claim must of necessity be dismissed as stated by Bello, JSC in W.A.E.C. v Koroye (1977) 2 SC. 45. (See also B.E.O.O. v Maduakoh (1975) 12 SC. 91; Dumez v Ogboli (1972) 3 SC. 196; and Oshinjirin v Elias (1970) 1 All NLR 153.) In fact learned Counsel argued that special damages must be strictly proved and the meaning given to “strict proof ” thereon had been explained by Ani-agolu, JSC in Imana v Robinson (1979) 3–4 SC. 1. As for gen-eral damages, the learned Counsel contended that a plaintiff who was not a trader or a person in business could not (sic) get individual damages unless he proved his loss specifically but the plaintiff had not done that consequently he urged on this Court not to award any damages to the plaintiff, the claim of the plaintiff should therefore be dismissed with costs. On his own part, the learned Counsel to the plaintiff A. Bisuga, Esq. also reviewed the evidence of the plaintiff and his witness along with the exhibits A, B, C, D and E tendered by them. The exhibits in particulars D and E thereof which emanated from the defendant acknowledged wrong doing on the part of the defendant culminating in accounting error. He identified three issues for determination namely:–

(1) Whether the plaintiff’s cheque Exhibit B drawn on the defendant bank was properly presented for pay-ment on 6 February, 1991.


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(2) Whether the defendant’s failure to honour the cheque when the plaintiff’s account was still in credit is enti-tled to substantial damages by reason of the wrong-ful dishonour of his cheque.

(3) Whether the plaintiff as a businessman and an ac-count holder with the defendant/Bank was, without strict proof of actual loss or damage, entitled to sub-stantial damages by reason of the wrongful dishon-our of his cheque.

As to the first issue, learned Counsel referred to the state-ment of claim especially paragraphs 1, 3, 5, 6, 7, 7(a), 8 and 9 that the plaintiff was a business account holder with the defendant and he had his cheque dishonoured while having enough funds in his account to accommodate the cash de-mand. He referred to exhibit E, the relevant Statement of Account and also exhibit D, the Credit Advice issued by the Defence Witness who testified that the cheque was not prop-erly presented. That evidence of the first defence witness was materially at variance with the pleadings referred to above. He stressed the fact that it was settled principle of law that evidence given on facts not pleaded went to no is-sue, conversely a person could not lead evidence contrary to his pleadings. Therefore relying on Adesanya v Otuenu (1993) 1 NWLR (Part 270) page 234 and Chukwumah v Shell Petroleum (1991) 4 NWLR (Part 289) 512 the defen-dant’s contention that the cheque was not properly presented was not part of the defendant’s case, on the pleadings and therefore should be discountenanced. Also the evidence of the second defence witness who admitted that the cheque was properly presented by the Drawer ie second plaintiff witness but later grew annoyed and asked to collect her cheque back from the cashier because she felt that she had waited for too long, whereas the second defence witness admitted that by the value of the cheque the normal process-ing would ordinarily take between 15–20 minutes, were at variance with the pleadings and should be discountenanced. He submitted further that the inconsistencies in the evidence and pleadings of the defendant lent credence to the fact that


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the case of the plaintiff and the testimony of second plaintiff witness was more credible and should be believed as the true position by this Honourable Court relying on Odife v Aniemeka (1992) 7 NWLR (Part 251) page 25–41 and Du-ruji v Azie (1993) 7 NWLR (Part 256) page 688–709/10. He also urged on the court to take judicial notice of the se-quence of presentation and cashing of cheques in Nigerian Banks. It was not unusual for a cashier to return a cheque back to a customer after nearly completing the processing instead of cash payment to the customer on the flimsy ex-cuse that the customer was in a hurry, moreso after initial-ling and endorsing the said cheque. As to Issue No. (2), learned Counsel referred to the evidence of the plaintiff that upon becoming aware of the defendant’s refusal to honour his Cheque on 6 February, 1991 he wrote the defendant to register his disapproval and the embarrassment their action had caused to him, that was exhibit C and the defendant tried to appease him and admitted that the error complained of by the plaintiff was in fact an accounting error and it had been rectified. He submitted that by virtue of exhibit D by the defendant, the defendant admitted the plaintiff’s allega-tion of wrongful transfer in his Account as at January end-ing. The said Account was not put back into its credit by the defendant until after 6 February, 1991 when the plaintiff’s cheque was dishonoured. He maintained that the actual rea-son for the wrongful dishonouring of the plaintiff’s cheque was the accounting error referred to in exhibit D and not the non presentation of the cheque nor the impatience of the Drawee. He contended that if a Banker without justification dishonour his customer’s cheque he was liable to the cus-tomer in damages for injury to credit. He too relied on Gib-bons v Westminister Bank Ltd (1939) 3 All ER 577 and Ba-logun v N.B.N. Limited (1978) 3 SC. 155. As to Issue No. (3), the defendant questioned the plaintiff’s assertion that he was a businessman/trader engaged in the furniture making business, but the defendant had admitted that the plaintiff claimed to be in business and that the account though per-sonal was for his personal business dealings. The defen-dants have however failed to distinguish between the


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personal account of a non-business person from the personal account of a business person, or an account held in a trading company. Learned Counsel maintained that the account was held by the plaintiff, a businessman as his own Account as opposed to various other Accounts held by limited liability companies in which he was a Director. He then referred to paragraphs 7 and 8 of the Statement of Claim as well as the plaintiff’s copious evidence that he was a seasoned busi-nessman/trader and had been doing business with the defen-dants for upwards of 15 years. As regards damages, learned Counsel referred to the Balogun’s case (supra) that the court might award damages as it deem fit and reasonable in the circumstances of the case. Also referring to the Gibbon’s case (supra) it was not necessary to plead or prove actual damages suffered by a trader in substantial damages as claimed by him in the writ of summons:– 1. Was the plaintiff’s cheque tendered as exhibit A,

properly presented to the defendant Bank on 6 Feb-ruary, 1991 by the second plaintiff witness?

2. Did the defendant’s failure to honour the plaintiff’s cheque when presented amount to a wrongful dis-honour of same?

3. Was the plaintiff libelled by the dishonouring of his personal cheque?

4. Would the plaintiff as a businessman and an account holder be entitled to substantial damages by the rea-son of wrongful dishonour of his cheque?

These are the issues for determination in this judgment. The relationship between a banker and his customer is that of prin-cipal and agent, and the refusal by the banker to pay a cheque drawn on the banker by the customer amounts to a breach of contract for which the banker is liable in damages, if the cus-tomer had enough funds at the time to satisfy the amount pay-able on the cheque. A cheque drawn on the banker by the cus-tomer represents the order of the principal to his agent to pay out of the principal’s money in his hands, the amount stated on the cheque to the payee endorsed on the cheque. So stated


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Idigbe, JSC in Balogun v N.B.N. (1978) 3 SC. 155–163/164 or as stated by Bello, JSC then in: Yesufu v A.C.B. (1980) 1 SC. 74–98/99. When a bank debits the current account of its cus-tomer with a certain sum, the banker becomes a creditor to the customer in respect of that sum. When a bank credits the cur-rent account of its customer with a certain sum, the banker be-comes a debtor to the customer in respect of that sum, if any of the parties fails to honour a demand for payments the demand-ing party has a right to sue the defaulting party. (See also U.B.N. v Nwoye (1996) 3 NWLR (Part 435) 135–142; Allied Bank of Nigeria Ltd v J. Akubueze (1997) 6 NWLR (Part 509) 374; and Royal Petroleum Co Ltd v F.B.N. Ltd (1997) 6 NWLR (Part 510) 584–599 C.A.) It was contended by the plaintiff that he gave his cheque, exhibit A to the second plain-tiff witness for encashment on 6 February, 1991. The said cheque had written on it “Pay Cash”. The second plaintiff wit-ness requested to have the cheque back if the defendant were unwilling to honour the cheque. The said cheque was returned to the second plaintiff witness who took it back to the plaintiff that the defendant were unwilling to honour the cheque. The plaintiff had wanted to use the said money to pay some busi-ness associates.

The defendant on the other hand admitted that the plaintiff had money in his account but that the account had been clas-sified as Branch 72 which meant that the activities in the said Account had been dormant for some time. Had the second plaintiff witness exercised patience she would have been paid. Also the said cheque did not have the usual inscription of a dishonoured cheque written on it. From the principles stated in the Balogun’s case (supra) and relied upon in those cases cited above, the contractual relationship did not take cognisance of the fact that the plaintiff’s account had been classified, as the plaintiff was unaware of the classifica-tion. The defendant had thus held itself out as the agent of the principal to pay at the plaintiff’s command the amount stated in the cheques, moreso when there was sufficient funds in the said account. To attribute the failure to pay the second plaintiff witness as “accounting error” was to say the least a ploy and an attempt to relieve themselves of their


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contractual responsibility to the plaintiff’s account as at the time exhibit A was presented for encashment. It was equally apparent exhibit A had gone through the usual banking pro-cedure to ascertain that the signature was regular and there were no features on it that made the payment unlikely. It would have accorded with normal banking etiquette for the cashier to have prevailed on the second plaintiff witness not to withdraw exhibit A. The contention that the normal in-scription “Refer to Drawer, etc” usually inscribed on dis-honoured cheques was not put on this cheque put the liabil-ity on the defendant bank, moreso when the defendant ad-mitted that the plaintiff had sufficient funds to absorb the said cheque. There was nothing on the said cheque to indi-cate that it was not properly presented to the defendant on the 6 February, 1991. In actual fact everything pointed to the fact that exhibit A was properly presented to the defendant by the second plaintiff witness moreso when the defendant had put their stamp on it. The defendant should have indi-cated the reason for the withdrawal of the cheque from them to absolve them of liability and I so hold. It was the conten-tion of the plaintiff that the refusal of the defendant to hon-our exhibit A on 6 February, 1991 constituted a wrongful act moreso when there were sufficient funds in the said account.

The defendant’s response to that was the plaintiff’s witness who came for encashment was impatient and should have waited longer. They further stated that it was an accounting error. If the payee was impatient, did the defendant do what they were supposed to do to shift the blame back to the plaintiff moreso when they re-classified the plaintiff’s ac-count without informing him, and secondly when the defen-dant knew that the plaintiff had sufficient funds in the said account to meet the cheque. Failure to honour the cheque was blameworthy on the part of the defendant and they are not absolved from their contractual responsibility of ensur-ing that a cheque presented to the Bank for encashment in respect of an account that had sufficient funds is honoured promptly. Impatience on the part of the second plaintiff wit-ness to wait all day for the bank to finish the


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banking procedures was no defence to the defendant and I so hold. Was the plaintiff libelled by the dishonouring of his personal cheque ie exhibit A. It was contended by the plain-tiff that when the second plaintiff witness returned from the bank on that day he had some suppliers of timber with him from Oyo State whom he had to pay some money but could not pay. He felt humiliated and he lost some business as a result of that. But was the plaintiff libelled? One of the es-sential ingredients of libel is publication through a docu-ment. (See Okafor v Ikeanyi (1979) 3–4 SC. 99–104 and Egbuna v Amalgamated Press (1967) 1 All NLR 25.)

The defendant in this instance did not publish anything through any form of publication which would have libelled the plaintiff. Also nobody was called by the plaintiff to show that his character had been impugned by the said pub-lication and that had brought him into contempt and disre-pute before right thinking persons. The fact that second plaintiff witness informed the plaintiff that the defendant was unwilling to honour the cheque without more did not libel the plaintiff. The plaintiff has therefore not established this issue of libel on the preponderance of evidence before this Court and that claim would fail. Would the plaintiff be entitled to substantial damages as a result of wrongful dis-honouring of his cheque. As stated earlier in this judgment, the relationship between the plaintiff and the defendant was that of banker/customer and it was contractual. The defen-dant had a contract with the plaintiff to honour all cheques presented to the defendant by the plaintiff when the plaintiff had sufficient funds in the said account and there was noth-ing irregular about the cheque. The plaintiff had sufficient funds in his account, his cheque was presented but unfortu-nately it was given back to the payee because, according to the defendant, the payee was impatient in wanting to collect the cheque. There was contractual obligation on the part of the defendant which the defendant had failed to meet, thereby giving rise to a breach of which the defendants are liable. As stated by Akpabio, JCA in: Royal Petroleum Co Ltd v F.B.N. Ltd (1997) 6 NWLR (Part 510) page 584–599


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“A banker who fails to pay a cheque issued by his customer when there are funds in the Account is liable in damages for any loss that flows naturally from such unlawful dishonour.”

The plaintiff had stated that he lost a business transaction as a result of the dishonour of his cheque. The plaintiff had in line with the principle stated in the above cited case and on the preponderance of evidence established that he was a businessman dealing in furniture making and that some sup-pliers had come to him from Oyo to transact business. He eventually lost that business and was claiming N200,000. The plaintiff had thus established that claim, the plaintiff needed not call the suppliers to testify to show that he had in fact lost that business, it flowed naturally from the contrac-tual obligation and I so hold. Consequently, I award to the plaintiff the sum of N200,000 for the loss of that business. I am guided by the principles in Balogun v N.B.N. Ltd (1978) 3 SC. 155–165 that:– 1. The rule in Hadley v Baxendale in measuring dam-

ages is usually difficult to apply in cases of wrongful dishonour of cheques.

2. Thus damages awarded for wrongful dishonour of cheques by a banker are generally nominal except in circumstances recognised by law as exceptional:–

(a) Where the person whose cheque is wrongfully dishonoured is a trader.

(b) Where the person whose cheque is wrongfully dishonoured is in business whether or not slan-derous acts or statement accompany such wrongful dishonour.

3. In these exceptional circumstances, actual damage need not be shown by the customer before substan-tial damages are awarded.

4. In all other cases, actual damage must be shown where substantial damages can be awarded.

As for general damages, the observation of Eso, JSC in: West African Shipping Agency Nigeria Ltd v Kalla (1978) 3 SC. 21–32 would be my guide.


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1. In awarding general damages, a trial Judge must make his own assessment of the quantum of such damages.

2. General damages must not be too high or too low or awarded on a wrong principle.

3. Loss of expected profits should not be taken into consideration in the award of general damages.

4. A person should not be compensated for any item never claimed.

In making my own assessment of general damage I rely on the evidence of the plaintiff that he had been in the furniture business for a long time and had been banking with the de-fendant then for more than fifteen years. The defendant would be vicariously liable for the act of the cashier in re-turning the Cheque without an endorsement. I hereby award the sum of N100,000 as general damages to the plaintiff. Consequently therefore, the claim of the plaintiff succeeds and Judgment is hereby given in favour of the plaintiff against the defendant in the sum of N200,000 as special damages for the wrongful dishonour of his cheque no. LH/3141088 on 6 February, 1991 by the defendant, also the sum of N100,000 is hereby awarded as general damages to the plaintiff.

[1999] 9 N.B.L.R. (FEDERAL HIGH COURT, IBADAN DIVISION)

Moyosore Enterprises Nigeria Ltd v. Nigeria Deposit Insurance 335

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Moyosore Enterprises Nigeria Limited and another v Nigeria Deposit Insurance Corporation

FEDERAL HIGH COURT, IBADAN DIVISION SOBA J Date of Judgment: 17 MARCH, 1999 Suit No.: FHC/IB/CS/35/99

Failed Bank – Leave of Court sought to commence action against Nigeria Deposit Insurance Corporation – Whether grantable – Section 417 Companies and Allied Matters Act – Section 23(D)(1) Nigeria Deposit Insurance Corporation (Amendment) Decree No. 5 of 1997 Facts This ex parte application was filed on 14 April, 1999 on behalf of the plaintiffs/applicants praying for an order granting leave to the applicants to commence legal proceedings against the defendant and for such further order or other orders as this Honourable Court may deem fit to make in the circumstances.

In moving the application Mrs Nse, learned Counsel for the applicant stated that the ex parte application was brought pur-suant to Order 33 Rule 7 of the Federal High Court (Civil Pro-cedure) Rules and section 417 of the Companies and Allied Matters Act (hereinafter referred as “CAMA”) Laws of the Federation of Nigeria, 1990. And it is supported by 12 para-graphs affidavit with two affidavits attached therein.

The learned Counsel referred to paragraphs 4 and 5 of the affidavit in support and submitted that there is no way they can proceed against the Allied Bank of Nigeria Plc without obtaining leave of this Court in view of sections 417 and 650 of CAMA. Accordingly, she urged the court to grant the ap-plication as prayed.

Section 417 of the Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990 says:– “417. If a winding up order is made or a provisional liquidator

is appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court given in such terms as the court may im-pose.”



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Section 23D(1) of NDIC Decree No. 5 of 1997 provides as follows:–

“As from the commencement of liquidation of an insured institu-tion by the corporation and notwithstanding anything to the con-trary in any law in force, no suit shall be instituted against an in-sured institution whose control has been assured for purposes of liquidation by the corporation.”

Held – Normally leave of court is required to commence or proceed with an action against a company when a winding order has been made or provisional liquidator has been appointed in ac-cordance with sections 417 and 425(1) of CAMA read to-gether, but by the provisions of section 23(D)(1) of Decree No. 5 of 1997 no proceeding shall be allowed to commence against an insured institution in court, under any law in force for the time being once that insured institution is under liqui-dation by the Nigeria Deposit Insurance Corporation. In the instant case since the Allied Bank of Nigeria PLC is under liq-uidation and the NDIC has been appointed the provisional liq-uidator, the court is incompetent to grant the leave prayed for.

Case referred to in the judgment

Nigerian Abekhe v NDIC (1995) 7 NWLR (Part 406) 228

Nigerian statutes referred to in the judgment Companies and Allied Matters Act Cap 59 Laws of the Fed-eration of Nigeria, 1990, sections 417, 425 Nigeria Deposit Insurance Corporation (Amendment) De-cree No. 5 of 1997, section 23(D)(1)

Counsel For the applicants: Mrs Nse David Ayilara

Judgment SOBA J: This ex parte application was filed on 14 April, 1999 on behalf of the plaintiffs/applicants praying for an


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Moyosore Enterprises Nigeria Ltd v. Nigeria Deposit Insurance 337

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order granting leave to the applicants to commence legal proceedings against the defendant and for such further order or other orders as this Honourable Court may deem fit to make in the circumstances.

In moving the application, Mrs Nse learned Counsel for the applicant stated that the ex parte application was brought pur-suant to Order 33 Rule 7 of the Federal High Court (Civil Pro-cedure) Rules and section 417 of the Companies and Allied Matters Act (hereinafter referred as “CAMA”) Laws of the Federation of Nigeria, 1990. And it is supported by 12 para-graphs affidavit with two affidavits attached therein.

The learned Counsel referred to paragraphs 4 and 5 of the affidavit in support and submitted that there is no way they can proceed against the Allied Bank of Nigeria Plc without obtaining leave of this Court in view of section 417 and 650 of CAMA. Accordingly she urged the court to grant the ap-plication as prayed.

The issue for determination is whether this Court is compe-tent to grant the leave requested in view of the Nigeria Deposit Insurance Corporation (Amendment) Decree No. 5 of 1997.

Section 417 of the Companies and Allied Matters Act says:– “417. If a winding up order is made or a provisional liquidator is

appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court given in such terms as the court may impose.”

This provision of the law was applied in the case of Abekhe v Nigeria Deposit Insurance Corporation (1995) 7 NWLR (Part 406) 228. Where the Court of Appeal held that by sec-tions 417 and 425(1) of CAMA read together an action by or against a company when a winding order has been made or provisional liquidator has been appointed, leave of court is required to commence or proceed with such action.

The decision of Abekhe case (supra) was given before the promulgation of the amended Decree No. 5 of 1997. Section 23D(1) of Decree No. 5 of 1997 provides as follows:–

“As from the commencement of liquidation of an insured institu-tion by the corporation and notwithstanding anything to the


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contrary in any law in force no suit shall be instituted against an insured institution whose control has been assured for purposes of liquidation by the corporation.”

The language of this section of the Decree is very clear hence it does not need any external aid for its interpretation. It means in my view no proceeding shall (mandatory) be al-lowed to commence against an insured institution in court, under any law in force for the time being once that insured institution is in liquidation by the Nigerian Deposit Insur-ance Corporation.

In this regard, I refer to paragraphs 7 and 10 of the affida-vit in support. They are as follows:– “7. That on the 16 January, 1998, the Governor of Central

Bank of Nigeria revoked the licence of Allied Bank of Ni-geria PLC., and the defendant appointed the provisional liquidator of the said bank. A copy of the Federal Republic of Nigeria official Gazette which contains these facts is herewith attached and is marked exhibit A.

8. . . . 9. . . . 10. That Mrs Nse David Ayilara of Counsel also informed me

and I verily believe her that by virtue of section 417 of the Companies and Allied Matters Decree Chapter 59 Laws of the Federation of Nigeria, leave of this Honourable Court must be obtained before the plaintiffs can commence pro-ceedings against the defendant.”

Exhibit A, the official Federal Government Gazette No. 10 Vol. 85 of 16 January, 1998 is before me. It confirmed the averment in paragraph 7 (supra) of the affidavit in support. The Allied Bank of Nigeria Plc for sure is in liquidation and among the 26 list of banks whose banking licences were re-voked. The said Allied Bank of Nigeria PLC is the first in the serial. The defendant in this case was appointed the pro-visional liquidator.

The operative phrase of section 23(D)(1) of the Nigeria Deposit Insurance Corporation (Amendment) Decree (su-pra) “notwithstanding any thing to the contrary” debar the applications of section 417 of CAMA in the present applica-tion. In the light of this therefore the court is incompetent to grant the leave prayed for. Accordingly, the application is hereby struck out from the cause list.

[1999] 9 N.B.L.R. (FAILED BANKS TRIBUNAL, SOKOTO ZONE)

Federal Republic of Nigeria v. Yinka Folarin and others 339

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Federal Republic of Nigeria v Yinka Folarin and others

FAILED BANKS TRIBUNAL, SOKOTO ZONE MIKA’ ILU J Date of Judgment: 19 MARCH, 1999 Suit No.: FBT/CR/SZ/001/98

Banking – Offences – Falsifying records of books, docu-ments or accounts of bank – Section 435(2)(a) and (b) Criminal Code Act Cap 77 Laws of the Federation of Nige-ria, 1990 – Accused forwarding incomplete records from branch to head office – Whether sufficient evidence of falsi-fication

Banking – Offences – Granting of unauthorised loans by bank manager – Letter of commendation by banking author-ity – Whether renders transactions legal – Section 20(1)(a) Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended)

Dishonoured Cheques – Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990, sec-tions 1(1)(b) and 2 – Applicable principles

Facts The first two accused, Messrs Yinka Folarin and Dauda Olusola Aliu were officers of the Owena Bank, while the remaining persons were the customers of the bank. The two officers were charged with granting various unauthorised loans or credit facilities to various customers of the bank and for falsification of documents.

The various charges are hereby reproduced:– “Count 1:–

That you, Mr Yinka Folarin and Dauda Olusola Aliu be-tween 4 February, 1996 and 17 April, 1997 at Onitsha, Anambra State within the jurisdiction of this Honourable Tribunal whilst being Branch Manager and Head of Opera-tions respectively for Onitsha Branch of Owena Bank Plc (hereinafter called ‘the Bank’) conspired with one another to commit a felony to wit:– granting various unauthorised



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loan or credit facilities totalling N15,774,642.25 to sundry customers of the Bank and thereby committed an offence contrary to section 516 of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 read in conjunc-tion with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).

Count 2:– That you, Mr Yinka Folarin and Mr Dauda Olusola Aliu be-

tween 4 February, 1996 and 17 April, 1997 at Onitsha, Anambra State within the jurisdiction of this Honourable Tribunal whilst being Branch Manager and Head of Opera-tions respectively for Onitsha Branch of Owena Bank (here-inafter called ‘the Bank’) granted various unauthorised loans or credit facilities totalling N15,744,642.25 to sundry cus-tomers of the Bank contrary to the regulation, circular or procedure as laid down by the Bank regarding the grant of loan or credit facility and thereby committed an offence pun-ishable under section 20(1)(a) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).

Count 3:– That you, Mr Yinka Folarin and Mr Dauda Olusola Aliu

between 31 December, 1996 and 29 March, 1997 at Onit-sha, Anambra State within the jurisdiction of this Honour-able Tribunal whilst being Branch Manager or Servant of Owena Bank Plc, (hereinafter called ‘the Bank’) fraudu-lently with intent to defraud, falsified record books, docu-ments or accounts of the Bank to wit:– recording false credit entries of cheques totalling N3.39 Million drawn on Commercial Bank (Credit Lyonnais Nigeria Limited) into account No. 605-2 operated by A.K.C. Anaegesons Indus-tries Limited and three cheques totalling N4.4 Million drawn on Gulf Bank of Nigeria Limited into account No. 581–4 operated by Offochris Brothers Agency Limited, and thereby committed an offence under section 435(2)(a) and (b) of the Criminal Code Act and punishable under the same section of the Criminal Code, read in conjunction with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).


between 2 September, 1996 and 16 April, 1997 at Onitsha,



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Anambra State within the jurisdiction of this Honourable Tribunal whilst being the Manager and Head of Operations respectively for Onitsha Branch of Owena Bank Plc, (here-inafter called ‘the Bank’) fraudulently with intent to de-fraud, falsified documents of the Bank to wit:– making false representations that payments had been made and misled the Bank to issue the following Banker’s Cheques Nos. 005328 for N400,000, 005780 for N500,000, 005787 for N1,400,000, 005920 for N700,000 and 005932 for N600,000 and thereby committed an offence under section 435(2)(a) and (b) of the Criminal Code Act an punishable under same, read in conjunction with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended).

Count 5:– That you, Mr Dauda Olusola Aliu on or about 1 August,

1997 and 15 September, 1997 at Onitsha, Anambra State of Nigeria within the jurisdiction of this Honourable Tribunal whilst being Head of Operations of Onitsha Branch of Ow-ena Bank Plc granted unauthorised overdraft amounting to N356,345.44 to Messrs Joekins International Nigeria Lim-ited, contrary to the regulations, circular or procedure as laid down by the Bank and thereby committed an offence under section 19(1)(c) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).

Count 6:– That you Offorchris Brothers Agencies Limited (hereinafter

called ‘the Company’) and you Mr Christian Offor on or about the 27 March, 1997 at Onitsha, Anambra State of Ni-geria within the jurisdiction of this Honourable Tribunal whilst being a Customer of Owena Bank Plc, Onitsha Branch (hereinafter called ‘the Bank’) and the Chair-man/Director cum sole signatory to the account of the com-pany lodged two cheques No. 00609254 for N1,500,000 and No. 00609256 for N1,400,000 all drawn on Co-operative Development Bank Plc, Onitsha Bank in pur-ported settlement of your obligation to the Bank in the sum of N3,116,200.81 and the two cheques were dishonoured when presented for payment due to insufficient funds in the account of the company and thereby committed an offence under sections 1(1)(b) and two of Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990, read along with section 3(1)(d) of the Failed Banks



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(Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).

Count 7:– That you, A.K.C. Anaegesons Industries Limited (hereinaf-

ter called ‘the Company’) and you Chief Alphonsus O. An-aege on or about 31 December, 1996 at Onitsha, Anambra State of Nigeria within the jurisdiction of this Honourable Tribunal whilst being a Customer of Owena Bank Plc, Onitsha Branch (hereinafter called ‘the Bank’) and Director cum sole signatory to the account of the company lodged two cheque nos. 077555B for N1,650,000 and 077556B for N1,740,000 into the account of the company in purported settlement of your obligation to the Bank in the sum of N4,711,925.45 and the two cheques were dishonoured when presented for payment due to insufficient funds in the account of the company and thereby committed an offence under sections 1(1)(b) and two of Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990 read along with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).”

The prosecution adduced evidence to show that during the tenure of the officers of the bank, they granted unauthorised credits against spurious cheques, while the remaining ac-cused were also collaborators in the scheme. To cover up the irregularities, the officers falsified records of the bank, while the customers were issuing dud cheques.

In their defence the officers tried to justify their actions and the first accused said that he got a letter of commenda-tion which he said was evidence that his employers were agreeable to the transactions.

With regards to the customers, their Counsel submitted in the main that the cheques were not dishonoured, neither were they issued to obtain loan nor done to cheat.

Held – 1. By the provisions of section 19 Decree No. 18 of 1994

(as amended), any director, manager, officer or employee of a bank who knowingly, recklessly, negligently, will-fully or otherwise grants, approves the grant, or is other-wise connected with the grant or approval of a loan,



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an advance, a guarantee or any other credit facility or financial accommodation to any person contrary to prac-tice or banks regulations can be found guilty.

2. The mere fact that the first accused was written a com-mendation letter does not negate wrongfulness of the transactions.

Per curiam “From the entire evidence what is clear is that the alleged

transactions actually occurred and there is nothing to con-tradict it. The first accused is only alleging justifications on the basis of Ascension Program in which information by telephone is said to be used in executing payment to cus-tomers. In his own statement exhibit B he has made it clear that the whole issue was as a result of error of judgment on his own side and that his grave mistake was failure to report the event immediately. I do not think that mere evidence that the first accused was authorised to use telephone trans-action in effecting payments to customers not justify dupli-cation of payment nor can the first accused plead that it is a duplication of payments involving eight customers out of whom six have repaid the sums against their accounts as the learned Counsel for the first and second accused persons have pleaded. The mere fact that the first accused was writ-ten a commendation letter does not negate wrongfulness of the transactions.”

3. Forwarding incomplete record in itself is sufficient falsi-fication of record.

Per curiam “Considering exhibit F, it is clear that the first accused falsi-

fied returns to Head Office instead of debiting the custom-ers account for draft issued on unfunded accounts, the in-struments were either unposted or debited into interbranch item in transit. By that the level of the branch loans and ad-vances were concealed thereby giving false returns. Thus there was non posting of the drafts. Refer to page 6 of ex-hibit F. This fact in itself had neither being denied or con-tradicted by the first accused. It has even been confirmed by statement of the first accused in exhibit B and his evidence before the Tribunal. It is clear in the testimony of PW2 that exhibits 13 and 14 were concealed in the suspense code while the customer was benefiting from the unauthorised lending. This in itself is sufficient to show fraud



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which was sufficient on the part of the first accused for fraud is discovered from the entire circumstances of each ease. Forwarding incomplete record in itself is sufficient falsification of record. I therefore find it proved beyond reasonable doubt that the first accused did fraudulently with intent to defraud, falsify record books, documents or ac-counts of the bank. I find the first accused guilty of the said offence and he is accordingly convicted of it.

The averment of the learned Counsel for the first accused on this count is the same for the second accused person. This is the case with the reply of the learned prosecutor. As indicated earlier as per page 10 of exhibit F the second ac-cused was privy to the making of the false entries as he was signatory to documents involved in the wrongful transac-tion. I therefore find it proved beyond reasonable doubt that the second accused did with intent to defraud falsify record of the bank. I also find him guilty of the said offence and I accordingly convict him of it.”

4. In determining whether there is fraud or falsification of record in a charge which alleges that an accused person fraudulently with intent to defraud falsifies records of books, documents or accounts, regard should be had to the entire evidence, oral and documentary and not evi-dence of one witness.

5. By virtue of section 1(2)(b) of the Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nige-ria, 1990, a person who issues a cheque in settlement or purported settlement of debt, and the cheque is not hon-oured, is guilty of an offence.

Per curiam “The averment of the defence Counsel for the fifth and

sixth accused that the cheques were not meant for obtaining debt cannot stand. By virtue of section 1(2)(b) of the Dis-honoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990, it is sufficient that the cheques have been issued in settlement or purported settlement of debt. That the cheques were not paid is in evidence in the statement of the sixth accused exhibit E as well as exhibits 13 and 14. Accordingly the fifth accused person is found guilty of the offence as charged under Count 7 and the fifth accused is accordingly convicted of it. In respect of the sixth accused person the averment of the learned Counsel



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that fifth and sixth accused persons should not be held re-sponsible as the cheques were issued by and in the name of the fifth accused cannot hold considering section 2 of the Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990. He is liable together with fifth accused person. The sixth accused person is also hereby found guilty of the offence under Count 7 and he is accord-ingly convicted of it.”

Accused convicted.

Nigerian statutes referred to in the judgment Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990, sections 1(1)(b), 1(2)(b), 2 Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), sections 3(1)(d), 20(1)(a)

Counsel For the prosecution: Bako Abdullahi For the first and second accused: S.O. Olodo For the fifth and sixth accused: J.U. Ajii

Judgment MIKA’ ILU J: There are six accused persons in this case. The charge in the case contains seven counts and it reads as follows:–

“Count 1:– That you, Mr Yinka Folarin and Dauda Olusola Aliu between

4 February, 1996 and 17 April, 1997 at Onitsha, Anambra State within the jurisdiction of this Honourable Tribunal whilst being Branch Manager and Head of Operations respectively for Onitsha Branch of Owena Bank Plc (hereinafter called ‘the Bank’) conspired with one another to commit a felony to wit:– granting various unauthorised loan or credit facilities totalling N15,774,642.25 to sundry customers of the Bank and thereby committed an offence contrary to section 516 of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 read in conjunction with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks De-cree No. 18 of 1994 (as amended).


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Count 2:– That you, Mr Yinka Folarin and Mr Dauda Olusola Aliu be-

tween 4 February, 1996 and 17 April, 1997 at Onitsha, Anambra State within the jurisdiction of this Honourable Tribunal whilst being Branch Manager and Head of Opera-tions respectively for Onitsha Branch of Owena Bank (here-inafter called ‘the Bank’) granted various unauthorised loans or credit facilities totalling N15,744,642.25 to sundry cus-tomers of the Bank contrary to the regulation, circular or procedure as laid down by the Bank regarding the grant of loan or credit facility and thereby committed an offence pun-ishable under section 20(1)(a) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).


between 31 December, 1996 and 29 March, 1997 at Onit-sha, Anambra State within the jurisdiction of this Honour-able Tribunal whilst being Branch Manager or Servant of Owena Bank Plc, (hereinafter called ‘the Bank’) fraudu-lently with intent to defraud, falsified record books, docu-ments or accounts of the Bank to wit:– recording false credit entries of cheques totalling N3.39 Million drawn on Commercial Bank (Credit Lyonnais Nigeria Limited) into account no. 605–2 operated by A.K.C. Anaegesons Indus-tries Limited and three cheques totalling N4.4 Million drawn on Gulf Bank of Nigeria Limited into account No. 581–4 operated by Offochris Brothers Agency Limited, and thereby committed an offence under section 435(2)(a) and (b) of the Criminal Code Act and punishable under the same section of the Criminal Code, read in conjunction with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).


between 2 September, 1996 and 16 April, 1997 at Onitsha, Anambra State within the jurisdiction of this Honourable Tribunal whilst being the Manager and Head of Operations respectively for Onitsha Branch of Owena Bank Plc, (here-inafter called ‘the Bank’) fraudulently with intent to de-fraud, falsified documents of the Bank to wit:– making false representations that payments had been made and mis-led the Bank to issue the following Banker’s Cheques


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Nos. 005328 for N400,000, 005780 for N500,000, 005787 for N1,400,000, 005920 for N700,000 and 005932 for N600,000 and thereby committed an offence under section 435(2)(a) and (b) of the Criminal Code Act an punishable under same, read in conjunction with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended).

Count 5:– That you, Mr Dauda Olusola Aliu on or about 1 August,

1997 and 15 September, 1997 at Onitsha, Anambra State of Nigeria within the jurisdiction of this Honourable Tribunal whilst being Head of Operations of Onitsha Branch of Ow-ena Bank Plc granted unauthorised overdraft amounting to N356,345.44 to Messrs Joekins International Nigeria Lim-ited, contrary to the regulations, circular or procedure as laid down by the Bank and thereby committed an offence under section 19(1)(c) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).

Count 6:– That you, Offorchris Brothers Agencies Limited (hereinaf-

ter called ‘the Company’) and you Mr Christian Offor on or about the 27 March, 1997 at Onitsha, Anambra State of Ni-geria within the jurisdiction of this Honourable Tribunal whilst being a Customer of Owena Bank Plc, Onitsha Branch (hereinafter called ‘the Bank’) and the Chair-man/Director cum sole signatory to the account of the com-pany lodged two cheques No. 00609254 for N1,500,000 and No. 00609256 for N1,400,000 all drawn on Co-operative Development Bank Plc, Onitsha Bank in pur-ported settlement of your obligation to the Bank in the sum of N3,116,200.81 and the two cheques were dishonoured when presented for payment due to insufficient funds in the account of the company and thereby committed an offence under sections 1(1)(b) and 2 of Dishonoured Cheques (Of-fences) Act Cap 102 Laws of the Federation of Nigeria, 1990, read along with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).

Count 7:– That you A.K.C. Anaegesons Industries Limited (hereinaf-

ter called ‘the Company’) and you Chief Alphonsus O. An-aege on or about 31 December, 1996 at Onitsha, Anambra State of Nigeria within the jurisdiction of this Honourable


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Tribunal whilst being a Customer of Owena Bank Plc, Onitsha Branch (hereinafter called ‘the Bank’) and Director cum sole signatory to the account of the company lodged two cheques nos. 077555B for N1,650,000 and 077556B for N1,740,000 into the account of the company in pur-ported settlement of your obligation to the Bank in the sum of N4,711,925.45 and the two cheques were dishonoured when presented for payment due to insufficient funds in the account of the company and thereby committed an offence under sections 1(1)(b) and 2 of Dishonoured Cheques (Of-fences) Act Cap 102 Laws of the Federation of Nigeria, 1990 read along with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).”

As per the charge above, Mr Yinka Folarin (hereinafter called “the first accused person”) and Mr Dauda Olusola Aliu (hereinafter called the second accused person) are both charged under Counts 1, 2, 3 and 4 while only the second accused person is charged under Count 5. Offorchris Brother Agencies Limited (hereinafter called the “third ac-cused person”) and Mr Christian Offor (hereinafter called the “fourth accused person”) are charged only under Count 6. A.K.C. Anaegesons Industries Limited (hereinafter called the “fifth accused person”) and Chief Alphonsus Anaege (hereinafter called “the sixth accused person”) are also charged under Count 7.

The Federal Republic of Nigeria has been represented by Bako Abdullahi. The first and second accused persons have been defended by S.O. Olodo while the fifth and sixth ac-cused persons have been defended by Mr J.U. Ajii. The third and fourth accused persons have been tried in absentia.

It is for the prosecution to prove the case against each ac-cused person beyond reasonable doubt. Where there is doubt, the benefit of doubt goes to the accused person. The prosecution, to discharge this burden, has introduced two witnesses who have testified before the Tribunal. They are DSP, Godwin Esegine, PW1 and Mr Arnold Uneche PW2. Through them the prosecution has introduced a host of documents in evidence. The first, second and sixth accused persons have given evidence in defence.


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Count 1 involves conspiracy and as such it would be ap-propriate to deal with it after dealing with the allegations under the substantive offence. I will therefore proceed to deal with Count 2.

As shown earlier, Count 2 is against the first and second accused persons and it involves granting of various unau-thorised loans or credit facilities totalling N15,774,642.25 to sundry customers of Owena Bank Plc, Onitsha Branch. This is alleged to have occurred between 4 February, 1996 to 17 April, 1997. The learned Counsel for the first and second accused persons having reviewed the entire evidence exten-sively, has submitted that they can not be found guilty of this offence. He avers mainly that their defence is shown in their testimonies and their statements to the Police exhibits B and C. That debt owed by the customers arose from tele-phone transaction between their Onitsha Branch and Do-sunmu Branch in Lagos which arrangement was meant for named branches including Onitsha and Dosunmu Branches. Exhibit D/D is a letter of commendation from the Managing Director of Owena Bank Plc, which according to him, is a written approval of the phone transactions leading to a boom of the business of the Branch. He opines that by the Ascen-sion Seminar Programme of Action and exhibit D/A they had the authority to do what they did. He relies upon the au-thority of FRN v Nwabia (1998) 4 F.B.TLR 196 Decision 2.

It is also the averment of the learned Counsel for the first and second accused persons that the prosecution was on no-tice of this defence and had the opportunity to counter it by either denying the existence of Ascension Programme or calling Dotun Coker, Branch Manager of Dosunmu Branch to give evidence. The learned Counsel on this has cited sec-tion 149(d) of the Evidence Act, UBA v Ibhaefidon (1994) 1 NWLR (Part 318) 96; FRN v Ali (1998) 3 F.B.TLR 189; De-cision 15; Folarin v State (1995) 1 NWLR (Part 371) 313 and Ifegwu v FRN (1997) 1 F.B.TLR 86 Decision 4. The learned Counsel also opines that the alleged unauthorised loans arose from duplication into the customers accounts


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which all the customers agreed, and in fact, six out of the eight customers settled their indebtedness fully. He refers to exhibit D/B; exhibit D/C1; exhibit D/C2 and exhibit B and C. The learned Counsel relies upon the authority of Kimdey v Gongola State Government (1988) 2 NWLR (Part 77) 445 Decision 7.

As for the learned Prosecutor, he has submitted there is material contradiction in the evidence of the first accused person and exhibit B, his statement to police. That it is trite law “Where the evidence adduced by a witness in court is materially contradictory with his earlier statement to police, such a witness will be deemed unreliable and his evidence ignored” relying on Duru v State (1993) 3 NWLR (Part 281) 283, 286 ratio 4 and Onubogu v State (1974) 9 SC. The learned Prosecutor has also submitted that even if the Tri-bunal accepts the defence of the first and second accused persons that there was duplication of the transfer in respect of the third and sixth accused persons that would not pre-vent the Tribunal from finding them guilty of the offences in Counts 1 and 2 as it can convict of lesser amount if the charge is proved. He relies on Sagoe v The Queen (1963) 1 All NLR 290.

Be that as it may, it is the evidence that determines which way a case goes. In this case two witnesses have testified for the prosecution. PW1 is DSP Godwin Esegue and PW2 is Mr Arnold Uneche. Through them the prosecution has ten-dered in evidence a host of documents. The first and second accused persons have testified.

It is part of the testimony of PW1 that on 16 January, 1998, a letter of complaint addressed by NDIC to the A.I.G., Force CID Alagbon Close, Lagos, reference No. NDIC/OSB/LA/03/5991 dated 15 January, 1998 was re-ceived. The letter alleged criminal complaint against some staff of Owena Bank for various financial malpractices. The matter was assigned to his team to investigate by the co-ordinator of Failed Banks Enquiries. The letter has been ten-dered in evidence through PW1 exhibit A. In short among the documents tendered in evidence through this witness are


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cautionary statements of the first accused person, exhibit B cautionary statement of the second accused person exhibit C and the NDIC Report, exhibit F. The part of the statement of the first accused person in exhibit B reads as follows:–

“In September, 1997, when my Head of Operation was on leave I took over the operation of the Branch sundry account where the sum transferred are first debited pending receipt of the credit from our corporate Headquarters. I immediately discovered some long outstanding items on the sundry accounts in respect of the two cus-tomers accounts that is Offorchris and Anageson. I called them . . . they both agreed that the sum were indeed duplicated to their ac-counts and promised to work out repayment. This was in Novem-ber/December, 1996. Before the end of 1996 the two accounts holders sent in their cheques for the repayments of the sums out-standing against them which were N3.1 Million for Offorchris and Anageson N3.6 Million. The cheques were presented and they were returned unpaid.”

It is also part of his statement that he proceeded on annual leave later and resumed in March, 1996. He received a letter of transfer to Lagos in April, 1997 while the two customers had not fulfilled their promises of repaying the sums. In the statement he also stated as follows:–

“The grave mistake committed by me was the failure to report the events as it unfold. This was done to my believe in managing the event until I obtained the necessary collateral documents which would have made my report easy.”

He concluded the statement by stating that the whole issue was an error of judgment on his side and that all his actions were in good faith to benefit the bank.

In exhibit F, the NDIC Report, it is clear that during the tenure of the first accused at Onitsha Branch of Owena Bank Plc, some malpractices were observed in his handling of the branch operations. The malpractices included granting of unauthorised credits against spurious cheques. These spuri-ous cheques were given immediate value to conceal unau-thorised overdraft which arose from bank cheques/drafts is-sued to some of the branch customers. Some examples of such wrongful transactions showing dates, cheques, amounts and the customers involved are given on pages 3 and 4 of exhibit F.


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The testimony of PW2 is in the same footing with the con-tents of exhibit F except that it contains detailed explana-tion. PW2 is Ag. Chief Inspector with Owena Bank Plc. He stated in evidence that he inspected Onitsha Branch cover-ing the period of January, 1996 to April, 1997 during which period the first accused person was the Branch Manager. The PW2 has given detailed breakdown of the transactions in which the first accused authorised payments without suf-ficient amount in the customers accounts indicating that the transactions were not normal.

The first accused in his evidence has indicated that it was in August, 1996 when the second accused was on leave, having taken over part of his functions, he discovered that some moneys were duplicated into a number of customers accounts. This involved eight customers. Six of them started repaying the sums against their accounts.

From the entire evidence, what is clear is that the alleged transactions actually occurred and there is nothing to contra-dict it. The first accused is only alleging justifications on the basis of Ascension Program in which information by tele-phone is said to be used in executing payment to customers. In his own statement exhibit B he has made it clear that the whole issue was as a result of error of judgment on his own side and that his grave mistake was failure to report the event immediately. I do not think that mere evidence that the first accused was authorised to use telephone transaction in effect-ing payments to customers can justify duplication of payment nor can the first accused plead that it is a duplication of pay-ments involving eight customers out of whom six have repaid the sums against their accounts as the learned Counsel for the first and second accused persons have pleaded. The mere fact that the first accused was written a commendation letter does not negate wrongfulness of the transactions. It has been sub-mitted by the learned prosecutor that there is material contra-diction in the testimony of the first accused and his evidence in court. In his statement exhibit B what is clear is contradic-tion on date which does not much affect the substance of the issue. I do however, agree with the learned prosecutor that it


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is not essential that the amount charged shall be proved and that it is sufficient if lesser amount is proved. In exhibit F and the testimony of PW2 a number of transactions involv-ing granting of unauthorised loans by the first accused per-son have been enlisted indicating amount involved in each case. These have neither been denied nor contradicted and as such must be acted upon. The mere fact that a particular witness has not been called by the Prosecutor cannot be a defence to an accused person as the learned Counsel for the first and second accused persons has averred. By evidence of PW2 and exhibit F as well as evidence of the first accused in defence and his statement to Police exhibit B I found that it is proved beyond reasonable doubt that the first accused granted various unauthorised loans or credit facilities to sundry customers of the bank. I hold that the prosecution has proved the case of granting unauthorised loans contrary to section 20(1)(a) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 beyond reasonable doubt. I find the first accused guilty of the said offence and I accordingly, convict him of the said offence.

The case of the second accused is by evidence similar to that of the first accused. By evidence of the PW2 and exhibit F the transactions amounting to grant of unauthorised loans on the part of the second accused have been made clear. The second accused himself has by evidence and his statement to the police admitted at least the transaction involving Joekins International. His defence seems to be that the person in-volved was a friend to his Manager and it was after the insis-tence of the customer which can not amount to defence. It is clear in exhibit F that the second accused person signed along with the Managers some of the instruments such as teller and inter-branch vouchers needed in the Offorchris and Anageson case. He also single handedly and unilaterally granted unauthorised O/D amounting to N356,345.44 to Joekins International Nigeria Limited No. 639–9, the ac-count balance peaked to N456,792 debit as at 16 September, 1997. Refer to page 10 of exhibit F. The defences of


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second accused are as those of the first accused on this count which I have indicated earlier to be no defences. I therefore find it proved beyond reasonable doubt that they granted unauthorised loans as it has been made clear by sec-tion 19 of the Decree that any Director, Manager, Officer or Employee of a bank who knowingly, recklessly, negligently, wilfully or otherwise grants, approves the grant, or is other-wise connected with the grant or approval of a loan, an ad-vance, a guarantee or any other credit facility or financial accommodation to any person contrary to practice or banks regulations can be found guilty. I find the second accused guilty of the offence under Count 2 and I accordingly, con-vict him of it.

Count 3 is against the first and second accused persons. It alleges fraudulently with intent to defraud falsifying records of books, documents or accounts of the bank punishable un-der section 435(2)(a) and (b) of the Criminal Code read in conjunction with section 3(1)(d) of Decree No. 18 of 1994. On this count the learned Counsel for the first and second accused persons has submitted that the prosecution had no evidence to prove the offence. He has averred that PW1 gave evidence to the effect that police investigation did not reach any fraudulent entries in the bank books when they visited Onitsha Branch of Owena Bank. That no fraud was inherent in the transactions between first and second ac-cused on one hand and third and 5th accused persons on the other relying upon Adereti v Western Region (1965) 1 All NLR 266; 269. He also avers that giving immediate credit to exhibit 13 and 14 on 31 December, 1996 was based on the fact that the first accused had no reasons to believe that same would be dishonoured relying upon FRN v Kalgo (1998) 2 F.B.TLR 14 Decision 7. The learned Counsel for the first and second accused persons urges this argument on the Tribunal to discharge and acquit them on the third and fourth counts. The learned prosecutor has counter argued that the mere fact that PW1 said he did not find proof of fal-sification did not mean that the accused should be dis-charged and acquitted without regard to the documentary evidence placed before the Tribunal in respect of the


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cheques. That exhibits 13 for N1,650,000 and 14 for N1,740,000 and the total value thereof amounts to N3.39 Million and exhibits Q and R for the sums of N1,500,000 and N1,400,000 respectively totalling N2.9 Million. Though this amount is less than the sum stated in the charge that does not render the charge defective relying upon the author-ity of Sagoe v The Queen (1963) 1 All NLR 290. He also avers that the aforementioned exhibits were false credit en-tries into respective accounts of the two customers. I do agree with the submission of the learned prosecutor in this regard. In determining whether there is fraud or falsification of record book regard should be had to the entire evidence, oral and documentary and not evidence of one witness.

Considering exhibit F it is clear that the first accused falsi-fied returns to Head Office instead of debiting the customers account for draft issued on unfunded accounts, the instru-ments were either unposted or debited into interbranch item in transit. By that the level of the branch loans and advances were concealed thereby giving false returns. Thus there was non posting of the drafts. Refer to page 6 of exhibit F. This fact in itself had neither been denied or contradicted by the first accused. It has even been confirmed by statement of the first accused in exhibit B and his evidence before the Tribu-nal. It is clear in the testimony of PW2 that exhibits 13 and 14 were concealed in the suspense code while the customer was benefitting from the unauthorised lending. This in itself is sufficient to show fraud which was sufficient on the part of the first accused for fraud is discovered from the entire circumstances of each ease. Forwarding incomplete record in itself is sufficient falsification of record. I therefore find it proved beyond reasonable doubt that the first accused did fraudulently with intent to defraud, falsify record books, documents or accounts of the bank. I find the first accused guilty of the said offence and he is accordingly convicted of it.

The averment of the learned Counsel for the first accused on this count is the same for the second accused person. This is the case with the reply of the learned prosecutor. As


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indicated earlier as per page 10 of exhibit F the second ac-cused was privy to the making of the false entries as he was signatory to documents involved in the wrongful transac-tion. I therefore find it proved beyond reasonable doubt that the second accused did with intent to defraud falsify record of the bank. I also find him guilty of the said offence and I accordingly convict him of it.

Count 4 is also against the first and second accused per-sons. This count involves making false representations that payments had been made and thereby misleading the bank to issue the following bankers cheques:– No. 005328 for N 400,000.00 No. 009780 for N 500,000.00 No. 005787 for N 1,400,000.00 No. 005920 for N 700,000.00 and No. 005932 for N 600,000.00 The averment of the learned Counsel for the first and second accused persons on this Count is the same as on the third count for both accused persons. In fact he has argued them jointly. He mainly argued for the first accused that the giving of immediate credit to exhibits 3 and 4 on 31 December, 1996 was based on the facts that the first accused had no rea-son to believe that same would be dishonoured. The aver-ment of the learned Counsel for the first and second accused persons under this count is similar to his averment under Count 3 that no evidence has been led by the prosecution. The learned Prosecutor has himself conceded that cheque no. 005328 for N400,000 has not been tendered in evidence. I do not have to dwell too much on this Count as the facts forming the offence under this count are part of the facts for Count 3 on which both the first and second accused have been con-victed. Therefore the case under this Count against both the first and second accused persons is hereby terminated and each of them is hereby discharged under Count 4.

Count 5 is against the second accused person. Under it, he has been charged for granting unauthorised overdraft amounting to N356,345.44 to Messrs Joekins International Nigeria Limited, contrary to the regulations, circular or


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procedure as laid down by the bank contrary to section 19(1)(e) of the Failed Banks (Recovery of Debts) and Finan-cial Malpractices in Banks Decree No. 18 of 1994. On this Count the learned Counsel for the second accused has adopted his submission on Count 2. He has however, added that the customer was one of those enjoying Telephone Transfer Transactions. However, the learned prosecutor through the second accused said under cross-examination that the N750,000 he granted to Joekins was not loan by assis-tance he has however added that the amount was to be re-funded to the bank within two weeks and he could not say it was within his powers to do so. The learned prosecutor urges the Tribunal to consider this evidence as well as exhibit L and the statement of account of Joekins exhibit N and hold that the offence has been committed.

The second accused in his statement, exhibit C, has admit-ted that he granted the facility to Joekins International but ac-cording to him the customer was a friend to his manager and it was after the insistence of the customer. This is the same story in evidence of the second accused. It is also clear in ex-hibit F that he single handedly and unilaterally granted unau-thorised O/D amounting to N356,345.44 to Joekins Interna-tional Nigeria Limited No. 639–9. There is no evidence to contradict this fact. Therefore, I find it proved beyond reason-able doubt the second accused granted unauthorised overdraft as charged under Count 5. I find the second accused guilty of the said count and I accordingly convict him of it.

Count 6 is against the third and fourth accused persons. It is lodging two cheque nos. 00609254 for N1,500,000 and no. 00609256 for N1,400,000 all drawn on Co-operative Development Bank Plc, Onitsha Branch in purported settle-ment of their obligations to the Bank in the sum of N3,116,200.81 which cheques were dishonoured when pre-sented for payment due to insufficient funds. This is con-trary to section 1(1)(b) and 2 of the Dishonoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990 read along with section 3(1)(d) of Decree No. 18 of 1994.


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The third and fourth accused persons are said to be at large and therefore have been tried in absentia.

The learned Prosecutor in making his submission has drawn the attention of the Tribunal to the evidence of PW1 that he, along with other Policemen had made every effort to trace and arrest the 4th accused but to no avail. The learned Prosecutor has averred that by exhibits Q and R as well as statement of account of the company the prosecution has proved the case against the third and fourth accused per-sons beyond reasonable doubt.

Having perused the available evidence it is clear to me that exhibit Q is a cheque of Co-operative Development Bank Plc, in the sum of N1,500,000 drawn by Offorchris Brothers Agencies, the third accused and signed by fourth accused person on 27 March, 1997. Exhibit R is another cheque of Co-operative Development Bank Plc in the sum of N1,400,000 drawn by the third accused and signed by the fourth accused on the same date 27 March, 1997. Exhibit S is the statement of account of the third accused. By evidence of PW2, it is clear that the two cheques were issued and paid against unfunded account as is clear from exhibit S. It is thus shown that the third accused has obtained credit by dud cheques. I find this proved beyond reasonable doubt against the third accused. I therefore find the third accused guilty as charged. Accordingly, I convict him of the said of-fence. In respect of the fourth accused it has clearly shown that he was the signatory of the cheques. It has therefore been established that he obtained credit for the third accused beyond reasonable doubt. The fourth accused is found guilty of the said offence and he is accordingly convicted of it.

Count 7 is against the fifth and sixth accused persons. It is for lodging cheque nos. 077555B for N1,650,000 and 077556B for N1,740,000 into the account of the company (the fifth accused) with Owena Bank Plc Onitsha Branch in purported settlement of an obligation to the bank in the sum of N4,711,925.45 and the two cheques were dishonoured when presented for payment due to insufficient funds in the account of the fifth accused. This is an offence under


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section 1(1)(b) and 2 of the Dishonoured Cheques (Of-fences) Act Cap 102 Laws of the Federation of Nigeria, 1990 read along with section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994.

The learned Counsel for the fifth and sixth accused persons has given a lengthy written address in respect of this count and has argued the cases of the fifth and sixth accused per-sons together. I do not have to rewrite his address. However, his main averments are that:– (i) The cheques were not dishonoured. (ii) The cheques were not issued to obtain loan. (iii) That the cheques were issued on demand by the

Bank and there was no element of intention to cheat on the part of the fifth and sixth accused.

(iv) In the alternative that the sixth accused should not be held responsible for the act of the fifth accused.

The learned Counsel for the fifth and sixth accused persons has mainly argued that the cheques were paid on representa-tion and not dishonoured and that they were issued on de-mand. He has also argued that the sixth accused being a separate person from the fifth accused cannot be found re-sponsible for the act of the fifth accused, another person. That the debt arose out of duplication of payment which the fifth accused person is contesting. Moreso the fifth and sixth accused persons have already paid the sum of N400,000 dur-ing the investigation of the matter which shows that the fifth accused is ready to pay the ascertained amount of the debt after the accounts are reconciled.

On this count the learned Prosecutor has averred that it is not in dispute that the two cheques were dishonoured, when presented for payment. That the defence put up by the ac-cused person is after thought as no such defence was raised to the Police. They only pleaded for time to be given for payment.

In any case it is clear from exhibit F.P.3, that the two cheques in this count were cheques of Commercial Bank


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(Credit Lyonnais) No. 077555B and 077556B which were credited into the account of the fifth accused no. 605–2 to cover two unposted drafts No. 004911 earlier issued on 24 October, 1996 and 14 November, 1996 respectively. The statement of sixth accused exhibit E has made this clear and it reads:–

“I applied for credit facility of five million, the process was still on. It was as a result and how the account was being genuinely operated that the Manager started to assist the account to enable us get enough buying power as the business is highly capital inten-sive as a result he gave me a total sum of N4.8 Million out of the said sum the amount has been reduced to N4.4 Million.”

He has concluded the statement by saying that he can never deny owing the bank.

Thus it is clear that the two cheques were issued in settle-ment or purported settlement of an obligation. There is noth-ing to contradict this and I find this proved beyond reason-able doubt.

The averment of the defence Counsel for the fifth and sixth accused that the cheques were not meant for obtaining debt cannot stand. By virtue of section 1(2)(b) of the Dis-honoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990, it is sufficient that the cheques have been issued in settlement or purported settlement of debt. That the cheques were not paid in evidence in the statement of the sixth accused exhibit E as well as exhibits 13 and 14. Accordingly the fifth accused person is found guilty of the offence as charged under Count 7 and the fifth accused is accordingly convicted of it. In respect of the sixth accused person the averment of the learned Counsel that fifth and sixth accused persons should not be held responsi-ble as the cheques were issued by and in the name of the fifth accused cannot hold considering section 2 of the Dis-honoured Cheques (Offences) Act Cap 102 Laws of the Federation of Nigeria, 1990. He is liable together with fifth accused person. The sixth accused person is also hereby found guilty of the offence under Count 7 and he is accord-ingly convicted of it.


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As I have indicated earlier, the first count is against the first and second accused persons. It involves conspiracy to commit a felony. The first and second accused persons have already been convicted of the main offence. I therefore find it proper to terminate the charge under Count 1. The charge is accordingly terminated and the first and second accused persons are discharged in respect of Count 1.

Allocutus:–

Mr S.O. Olodo:– we thank the Tribunal for a job well done. We urge the Tribunal to consider section 20(5) of De-cree No. 18 of 1994. This section has watered down section 20(1). This Tribunal has discretions if it deems it equitable and it is equitable. The Tribunal can reduce the term or even decline to impose the penalty. There is evidence that most of the customers have since paid. The words used is either in full or substantial. I urge the Tribunal to hold that section 20(5) would avail the two accused (first and second) see also section 23(1) of Criminal Procedure Code.

Finally your discretion is unfettered. They are first offend-ers. The first accused was a Senior Manager. One of the ex-hibits exhibit H was prepared by the first accused. That both accused were at a time invited back for the work. The first accused has been in custody for about one year from January 18, 1998 until bail was granted in December, 1998. The sec-ond accused was supposed to resume work in October, 1998. Before that he spent 6 months in custody.

Ajii:– In respect of the fifth and sixth accused, we urge the Tribunal to temper justice with mercy in considering the sentence. By section 1(1) of the Dishonoured Cheques (Of-fences) Act Cap 102 Laws of the Federation of Nigeria, 1990, the punishment is a fine of N5,000 for limited com-pany, for individual is two years. We urge the tribunal to consider section 20(5) of the Decree to either decline to im-pose the punishment of two years on the sixth accused or reduce it’s fine of N5,000 for the fifth accused, a company. We urge the Tribunal to consider that 5th accused has paid N400,000. They have intention to pay. Even after the


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Tribunal adjournment they made a payment of N50,000. The 6th accused has a list of thirteen debtors to the company totaling N2,223,113. If the accused has made attempt to pay and he is pursuing debtors to pay, if he gets the amount eve-rything would be channelled to the bank. If the accused is imprisoned then what opportunity has he to recover money? We should be given opportunity to pay the money. We urge the Tribunal to impose minimum fine to the company. See section 23(1) of the Criminal Procedure Code. The fifth and sixth accused are first offenders. The transaction between them and the bank was profitable one. It was as a result of duplication of payments.

Finally the sixth accused is an old man who is sick with a lot of dependants, old parents and grandchildren. If sen-tenced to prison he may die of old age and sickness, the de-fendants would be another bigger problem to the country. I urge the Tribunal to temper justice with mercy and give the sixth accused opportunity to pay the loan.

Prosecutor: I urge the Tribunal to discountenance the re-quest of the two Counsel. The first accused has not shown any reason why that equity should be exercised in their fa-vour. They have not considered the plight of members of Owena Bank. Section 23(1)(a) of the Criminal Procedure Code does not apply. It applies only where there is lacuna in the Decree. Those who have paid are not before the Tribu-nal.

On the fifth and sixth accused, we urge the Tribunal to dis-countenance the applications of the Counsel. The fact that they have made part payment does not itself show that they are ready to pay. They have shown list of debtors but they have not shown any decisive step taken by them to recover, not even a letter from their Counsel.

Sentence

In passing the sentence particularly in respect of the first and second accused persons, the Tribunal has considered the fact that out of the eight customers involved in the


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transactions, six are said to have settled their indebtedness. The sentence is passed as follows:– First accused person:–

Second count: 1 year imprisonment Third count: 1 year imprisonment Both to run concurrently.

Second accused person:– Second count: 1 year imprisonment Third count: 1 year imprisonment Fifth count: 1 year imprisonment To run concurrently.

Third accused person:– On Count 6: Fined N50,000 on Count 6.

Fourth accused person:– Sentenced to imprisonment for two (2) years on Count 6. It is further ordered that the third and fourth accused

jointly and severally pay the sum of N3,116,200.81 together with bank interest thereof. Warrant of attachment of their properties both moveable and immoveable is hereby issued for their properties to be attached and sold to realise the amount together with the fine in respect of third accused. Arrest warrant is issued against the fourth accused. Fifth accused person:–

On Count 7, the fifth accused is hereby sentenced to pay a fine of N50,000. Sixth accused person:–

On Count 7, the sixth accused is hereby sentenced to two years imprisonment.

Both the fifth and sixth accused are hereby ordered to pay the remaining amount in the charge with bank interest. War-rant of attachment of their properties of both moveable and immoveable is hereby issued so that the amount together with fine can be realised against the fifth and sixth accused persons.



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S.M. Okeke and Sons Nigeria Ltd and others v Nigeria Deposit Insurance Corporation

SPECIAL APPEAL TRIBUNAL, LAGOS AGBAJE, ODUNLAMI, JJ, BALONWU S.A.N.

Date of Judgment: 20 MARCH, 1999 Suit No.: SAT/FBT/364/97

Failed Banks Tribunal – Service of process – How effected under the Failed Banks Tribunal – Effect of – Non-compliance thereof – Schedule 1 Paragraphs 5(1)(a), (b), (c), 6(1), (2), (3), 8, 25(3) and 27

Practice and Procedure – Service of Process – Modes of – Direct and Substituted service – What constitute – Princi-ples guiding service of process

Facts The plaintiff/respondent obtained judgment against the de-fendants/appellants under the undefended list from the Failed Banks Tribunal. The appellants appealed contending in the main that the plaintiff/respondent did not serve all the necessary processes on them before they obtained judgment.

The defendants/appellants admitted that the second appel-lant Chief S.M. Okeke Chairman and Chief Executive of the first defendant/appellant Company received a letter dated 22 April, 1996 posted by respondent’s solicitor to 136 Zik Avenue, Enugu informing the appellants of their indebted-ness of N17,371,781.32 to the respondent. And that this let-ter was passed to their solicitor who replied to it on 29 May, 1996 and advised the respondent’s Solicitors to withhold action. They stated therein that the claim now being ad-vanced was already pending at the High Court Enugu in Suit No. E/547/94 and that the said High Court had made certain Orders and Injunctions against the Failed Bank on self same issues giving rise to the proposed action. They urged the plaintiff/respondent’s Solicitors to stay further action pend-ing the determination of the High Court Suit. This letter was exhibited at page 92 of the Records of Proceedings.


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The appellants however, maintained that nothing more was heard from either the Bank or its Solicitors until 16 October, 1996 when the second appellant’s attention was called to a publication in “This Day” a Newspaper of that date, that judgment for N17,371,781.32 had been entered against the appellants by the Failed Bank Tribunal, Zone IV, Lagos on applications by the respondent.

The respondent contended otherwise. Provision of Schedule 1 paragraphs 5(1)(a)–(c), 6(1)–(3),

8, 25(3) and 27 Procedure for the Recovery of Debts at the Tribunal are reproduced:– “Paragraph 5(1) On the presentation of an application and pay-

ment of the requisite fees, the Secretary shall forthwith:–

(a) cause notice in Form C in the Appendix to this Schedule of the presentation of the application and a certified copy of the ap-plication to be served on the debtor;

(b) post up on the Tribunal notice board a certified copy of the application;

(c) send a certified copy of the application by registered post or messenger to the person or authority to whom it is required by law that the determination of the application shall be certified.”

“Paragraph 6(1) Subject to subparagraphs (2) and (3) of this paragraph, service on the respondent of the documents mentioned in sub-paragraph (1) (a) of paragraph 5 of this Schedule and of any other document required to be served on him before entering an appearance, shall be per-sonal;

(2) Where the Receiver or Liquidator has fur-nished, under paragraph 4 of this Schedule, the address of a place where personal service can be effected on the respondent, and the respon-dent cannot be found at that place, the Tribunal on being satisfied, upon an application sup-ported by an affidavit showing what has been done, that all reasonable efforts have been made to effect personal service, may



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order that service of any document mentioned in sub-paragraph (1) of this paragraph be ef-fected in any of the ways mentioned in the relevant provisions of the Civil Procedure Rules for effecting substituted service in a civil case and such service shall be deemed to be equivalent to personal service.

(3) The proceedings under the application shall not be vitiated by the fact that the respondent may not have been served personally or that any document of which substituted service has been effected pursuant to an order made under subparagraph (2) of this paragraph did not reach the respondent’s hands, and in such cir-cumstances as aforesaid the proceedings may be heard and continued as if the respondent has been served personally with the document and shall be valid and effective for all pur-poses.”

“Paragraph 8 If the debtor does not enter an appearance as aforesaid, any document intended for the debtor may be posted on the Tribunal notice board and such posting shall be sufficient no-tice thereof.”

“Paragraph 25(1) Non-compliance with any of the provisions of this schedule, or with any rule of practice for the time being in force, shall not render any proceeding void unless the Tribunal shall so direct, but such proceeding may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the Tribunal shall think fit to ensure substantial justice.

(2) No application to set aside any proceeding for irregularity shall be allowed unless made within reasonable time, or if the party apply-ing has taken any fresh step after knowledge of the irregularity.”

Held – 1. Service as stipulated in the Failed Banks Tribunal De-

cree by paragraph 6(1) of Schedule is one mandatory to be personal service and paragraph 6(2) also made it mandatory that where personal service cannot be



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effected an application supported by affidavit that the person cannot be found must be made to the Tribunal be-fore an Order for substituted service can be made. The provisions of paragraph 6(3) are subject to paragraph 6(2) and can only come into effect when the Tribunal has made an order for substituted service.

2. In procedure, service of process is the operation of bringing the contents or effect of a document to the knowledge of the person concerned. This may be by di-rect service or substituted service, and service is so fun-damental because it brings the defendant to court or tri-bunal and when this is effectively done the tribunal be-comes competent to assume jurisdiction to entertain the case.

3. Direct service is effected by actually bringing the docu-ment to the person or thing to be served. In a case of a person such service is called personal. Thus in an ordi-nary action personal service of the writ of summons is effected by handing a copy of the writ to the defendant and showing him the original if he asks to see it. A direct service may be effected on a thing. It is also called real service and can be effected on a ship or posted on some conspicuous part of the land. It is similar in nature with substituted service.

4. When a defendant is not found or traced to be served personally, notice of the failure to locate him must be brought to the knowledge of the Court or Tribunal for the court to make an order of substituted service. The object of substituted service is to provide the best means available under the circumstances for bringing the effect of the documents to the knowledge of the party, when he is keeping out of the way or his whereabouts are not known. Usually, this is done by Motion ex parte with a supporting affidavit, and the court will make an Order for substituted service. When a defendant is also out of jurisdiction a similar application for substituted service must be made.



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5. When a statute, in this case the Failed Banks Decree, pro-vides the Rules of Procedure applicable to its proceed-ings, one does not have to look elsewhere for guidance.

Appeal allowed.


Nigerian Christaben Groups Ltd v Nigeria Deposit Insurance Corpo-ration (1998) 4 F.B.TLR 30 Okereke v Ejiofor (1996) 3 NWLR (Part 434) 90 Union Beverages Ltd v Adamite and Co Ltd (1990) 7 NWLR (Part 162) 348

Foreign Watson and Son v Daily Records (1907) 1 KB 883

Nigerian rules of court referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), Sched-ule 1 Paragraph 5(1)(a), (b), (c), Schedule 1 Paragraph 6(1), 6(2), 6(3), Schedule 1 Paragraph 8, Schedule 1 Paragraph 25(3), Schedule 1 Paragraph 27

Counsel For the defendants/appellants: J.H.C. Okolo, Esq. For the plaintiff/respondent: O.A. Uzebu

Judgment BALONWU S.A.N.: This is an appeal under the undefended list from Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Tribunal, Zone IV, Lagos where Judgment was obtained by the plaintiff/respondent and appeal was lodged against the said Judgment by the defendants/appellants. The facts leading to this context are as follows:–

Messrs Emmanuel Umoren and Co the Solicitors of Co-operative and Commerce Bank of Nigeria Ltd a distressed


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bank on 22 April, 1996 wrote the defendants/appellants S.M. Okeke and Sons Nigeria Ltd and its four directors at their address at 136 Zik Avenue, Enugu in Enugu State giving them notice to recover the debt of N17,066,879.45 owed to the failed bank. There was evidence that this letter was re-ceived for it was replied to by the solicitors of the defen-dants/appellants J.H.C. Okolo, Esq. S.A.N.

The originating processes of the suit were served on one Paulinus Okafor who was described as an accountant of the first appellant company. These services were all effected on all the appellants at 136 Zik Avenue, Enugu on the 21 June, 1996 even though all the directors were not residing there. And one K.R.S. Raheem a Bailiff who served the process swore to an affidavit of service exhibited in the record of proceeding. The respondent contends that, service according to law has been effected and must be deemed a proper and valid service. The plaintiff/respondent thereafter caused an application for Judgment to be filed and the motion for judgment was accordingly posted at the Zone IV Tribunal Notice Board. The Tribunal heard the said Motion on the 10 October, 1996 and gave its judgment on the 14 October, 1996. It is necessary to mention that all these processes were served without the respondent applying for an Order for sub-stituted service.

The defendants/appellants on the other hand stated their own case as follows and admitted that the second appellant Chief S.M. Okeke Chairman and Chief Executive of the first defendant/appellant Company received a letter dated 22 April, 1996 posted by respondent’s Solicitor to 136 Zik Avenue, Enugu informing the appellants of their indebted-ness of N17,371,781.32 to the respondent. And that this let-ter was passed to their Solicitor who replied to it on 29 May, 1996 and advised the respondent’s Solicitors to withhold ac-tion. They stated therein that, the claim now being advanced was already pending at the High Court Enugu in Suit No. E/547/94 and that the said High Court had made certain Or-ders and Injunctions against the Failed Bank on self same issues giving rise to the proposed action. They urged the


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plaintiff/respondent’s Solicitors to stay further Action pend-ing the determination of the High Court Suit. This letter was exhibited at page 92 of the Records of Proceedings.

The appellants however, maintained that nothing more was heard from either the Bank or its Solicitors until 16 Oc-tober, 1996 when the second appellant’s attention was called to a publication in “This Day” a newspaper of that date, that Judgment for N17,371,781.32 had been entered against the appellants by the Failed Bank Tribunal, Zone IV, Lagos on applications by the respondents.

They hurriedly contacted their solicitors who filed applica-tion in the Lower Tribunal to set aside the Ruling obtained in default of appearance. They denied that they were served personally with any of the processes. Their application was refused by the Chairman of the Lower Tribunal on 13 Janu-ary, 1997 and this refusal necessitated the present appeal to this Special Appeal Tribunal on five grounds of appeal, which are not necessary to be reproduced in this judgment. The parties joined issues only on the question of Personal Service; J.H.C. Okolo, Esq., S.A.N. of Counsel for the ap-pellants had filed his brief of argument. And O.A. Uzebu, Esq. of Counsel of the respondent has also filed his respon-dent’s brief.

Mr Okolo the learned Senior Advocate has put the follow-ing issues for determination:– (i) Whether the Tribunal was right in the view it took,

that proper service of the originating application has been effected on the appellants.

(ii) Whether there was proper service of the motion for default judgment on the appellants.

(iii) Whether the Tribunal’s refusal to set aside the de-fault judgment on the appellants’ application was a proper exercise of its discretion, on the facts placed before it.

Incidentally, Mr O.A. Uzebu of Counsel for the respondent has adopted the two first issues put for determination by


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J.H.C. Okolo, Esq. the learned Senior Advocate, as the only matter arising for determination.

This appeal therefore is quite simple. It is whether the process as served in the Tribunal below is right in law. To fully understand this matter clearly we will outline the rele-vant submissions of Mr J.H.C. Okolo, S.A.N. and O.A. Uzebu, Esq. who have adopted their briefs before us, and elaborated the salient points in their briefs as follows:–

Mr Okolo submitted that all the appellants were not served personally. That even though the address of the company is at 136 Zik Avenue, Enugu, all the directors did not live there, some live in U.S.A. and in Lagos. He contended that the originating application and Notice of presentation of the application which constitute the summons in the proceeding were certified as having been served on one Paulinus Okafor who was described as an accountant at 136 Zik Avenue, Enugu and submitted that that service was not a personal service in law. Mr Okolo also argued that the motion papers for the default judgment were sent to the appellants by Cou-rier service through Universal Service at the same 136 Zik Avenue, Enugu and that this was received by one Mrs Ekeugo who they met at the building who signed the Deliv-ery Advice paper returned to the Tribunal. He submitted that this person too was not known to them and that service on her was not personal service and that the plaintiff/respondent did not apply to the Tribunal for order of substituted service.

He cited many authorities to support his contention that the Decree No. 18 of 1994 contains provisions for the service of application (summons) and all other documents required to be served on any respondent before his entry of Appearance. He said that schedule 1 paragraph 6(1) makes Personal Ser-vice the first requirement, of bringing the knowledge of the pendency of such applications to the debtor. He argued that it is only when this type of service failed that the court or a Tribunal can decree a substituted service as contained in schedule 1 paragraph 6(2) but the court or Tribunal must be satisfied that all reasonable efforts had been made to effect


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personal service and it failed. He submitted that without proper service no valid appearance can be expected from any defendant and concluded that service is a fundamental condition precedent to vest competence or jurisdiction in any Tribunal or Court. And cited these cases. (1) Union Beverages Ltd v Adamite Co Ltd (1990) 7

NWLR (Part 162) 348 at 355–357; (2) Madukolu v Nkemdilim (1962) 2 SCNLR 341 Other cases mentioned in his brief for substituted service and want of fair hearing include:– United Nigeria Press Ltd v Adebanjo (1969) 1 All NLR

431; Obimonure v Erinosho (1966) 1 All NLR 250; FMCB v Abiola and Sons Ltd (1991) 1 NWLR (Part

165) 14 at 28–30 Mr Okolo finally concluded his argument by stating that he stands or falls on the issue of service. And asked that this Appeal be allowed.

Mr Uzebu of the Counsel for the respondent first adopted his brief of argument and in reply submitted that the origi-nating processes of the suit were personally served by a bailiff Mr K.R.S. Raheem of the Lower Tribunal at the ap-pellants’ address given to the respondent bank at the time of transaction and these summonses, certified copies of them were served on Mr Paulinus Okafor an Accountant of the first appellant. He further submitted that the respondent bank caused an application for Judgment to be filed and the motion for judgment was accordingly posted at the Lower Tribunal’s Notice Board. He said that later the Chairman of the Lower Tribunal directed the Secretary to further by post send certified copies of application and motion for Judg-ment to the appellants at Enugu and this was served on one Mrs Ekeugo who signed the Courier’s Delivery Advice form. He submitted that all these services were performed in accordance with Schedule 1 paragraphs 5(1)(a)–(c), 8, 25(3) and 27 of the procedure for recovery of debt and


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submits that they have complied with the requirement of the law of service of process. He however admitted that there was no personal service but non the less the service was ef-fective. He said that the appellant had not shown why the judgment should be set aside and cited many authorities listed hereunder. (1) Kuifi v Mohammed (1993) 2 NWLR (Part 277) 602

at Page 605 Ratio 2; (2) Nwosu v Udeaja (1990) 1 NWLR (Part 125) 188; (3) Ogbuanyinya v Okudo (No. 2) (1990) 4 NWLR (Part

146) 551; (4) Provincial Insurance Co Ltd v Nigeria Tobacco Co

Ltd and others (1987) 2 NWLR (Part 56) 299 at 301 Ratio 10.

He specifically referred us to the recent case of this Panel reported in 1998 4 F.B.TLRP. 30 at page 43. The case of Christaben Groups Limited Appellant

v Nigeria Deposit Insurance Corporation Respondent (Manager New Nigeria Bank Plc) and submitted that if there was no personal service as re-quired by Schedule 1 paragraph 6(1) and no substituted ser-vice was ordered as required by paragraph 6(2) the service would still be effective and valid if served on the agent of the appellants and submitted that, that was the purport of Schedule 1 paragraph 6(3) and asked for the Appeal to be dismissed.

The whole case is based on service of process, but before we consider the law, it would be necessary to look at what this Panel said in Christaben Groups Ltd case. In that case in which the Chairman of this Panel Honourable Justice A.G.O. Agbaje read the lead judgment, the “issue” put up for determination is set down hereunder:–

“Whether the application for recovery of debt before the Lower Tribunal was not a nullity in view of the breach of section 97 of the Sheriffs and Civil Process Act Cap 407 on service of processes outside the state in which they were issued.”


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And this issue was succinctly dealt with in this manner thus:–

“In any case, the Rules of Procedure applicable in the Failed Banks Tribunal in the exercise of its civil jurisdiction are provided for in the first schedule to the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 herein referred as the Decree. There, modes of service of applica-tion for recovery of debts have been prescribed. In our judgment the provisions of the Sheriffs and Civil Process Law do not apply to proceedings in the Failed Banks Tribunal un-der the Decree.”

It is clear that what the judgment said is if the Decree made a provision for procedure to follow you do not look outside it.

In procedure, service of process is the operation of bring-ing the contents or effect of a document to the knowledge of the person concerned. It is of two kinds. Writs of Summons and some other judicial documents required to be served. This may be by Direct Service and Indirect or substituted service. And service is so fundamental because it brings the defendant to Court or Tribunal and when this is effectively done the Tribunal becomes competent to assume jurisdic-tion to entertain the case. (See Union Beverages Ltd v Adamite and Co Ltd (1990)

7 NWLR (Part 162) page 348 at 355–7.) Direct service is effected by actually bringing the document to the person or thing to be served. In a case of a person such service is called personal. Thus in an ordinary action personal service of the writ of summons is effected by hand-ing a copy of the writ to the defendant and showing him the original if he asks to see it.

A direct service may be effected on a thing. It is also called real service and can be effected on a ship or even land by affixing the writ to the mast of a ship or posted on some conspicuous part of the land. It is similar in nature with sub-stituted service.

When a defendant is not found or traced to be served per-sonally, notice of the failure to locate him must be brought


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to the knowledge of the Court or Tribunal for the Court to make an Order for substituted service.

In Dr Emmanuel Okereke v Frank Ejiofor and another (1996) 3 NWLR (Part 434) 90 at 102.

Achike, JCA as he then was, stated in his leading judgment that:–

“Service of court process on an individual must be personal, in the sense that documents for service must be delivered personally to him by the person assigned with that responsibility. Any other mode of service will only be proper with the leave of court. When a person is served by substituted service as in the instant case, by merely pasting the documents to the wall of his building, no reasonable tribunal, without more, will infer that the person to be served has become aware of the document or has knowledge of them.”

The object of substituted service is to provide the best means available under the circumstances for bringing the effect of the documents to the knowledge of the party, when he is keeping out of the way or his whereabouts are not known. Usually, this is done by Motion ex parte with a supporting affidavit. And the Court will make an Order for substituted service. When a defendant is also out of jurisdiction a simi-lar application for substituted service must be made.

(See Watson and Son v Daily Records (1907) 1 KB 853.) In this case the respondents/appellants in their motion and

affidavit dated 27 November, 1996 to be found at pages 89 and 90 of the Record of Proceedings denied that all the documents required to be served on them personally were not served on any of them in accordance with the provision of the Decree.

We will now look at the provisions of schedule 1 para-graphs 5(1)(a), (b), (c), 6(1), (2) and (3), 8, 25(3) and 27 of the procedure for the Recovery of debts at the tribunal also referred to and relied upon by Mr Uzebu.

“Paragraph 5(1):– On the presentation of an application and pay-ment of the requisite fees, the secretary shall forthwith:–

(a) cause notice in Form C in the Appendix to this Schedule of the presentation of the application and a certified copy of the application to be served on the debtor;


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(b) post up on the Tribunal notice board a certified copy of the application;

(c) send a certified copy of the application by registered post or messenger to the person or authority to whom it is required by law that the determination of the application shall be certified.

Paragraph 6:– (1) Subject to subparagraphs (2) and (3) of this paragraph, ser-

vice on the respondent of the documents mentioned in sub-paragraph (1)(a) of paragraph 5 of this Schedule and of any other document required to be served on him before enter-ing an appearance, shall be personal.

(2) Where the Receiver or Liquidator has furnished, under paragraph 4 of this Schedule, the address of a place where personal service can be effected on the respondent, and the respondent cannot be found at that place, the Tribunal on being satisfied, upon an application supported by an affida-vit showing what has been done, that all reasonable efforts have been made to effect personal service, may order that service of any document mentioned in subparagraph (1) of this paragraph be effected in any of the ways mentioned in the relevant provisions of the Civil Procedure Rules for ef-fecting substituted service in a civil case and such service shall be deemed to be equivalent to personal service.

(3) The proceedings under the application shall not be vitiated by the fact that the respondent may not have been served personally or that any document of which substituted ser-vice has been effected pursuant to an order made under sub-paragraph (2) of this paragraph did not reach the re-spondent’s hands, and in such circumstances as aforesaid the proceedings may be heard and continued as if the re-spondent has been served personally with the document and shall be valid and effective for all purposes.

Paragraph 8:– If the debtor does not enter an appearance as aforesaid, any

document intended for the debtor may be posted on the Tri-bunal notice board and such posting shall be sufficient no-tice thereof.

Paragraph 25:– 1. Non-compliance with any of the provisions of this Sched-

ule, or with any rule of practice for the time being in force, shall not render any proceeding void unless the Tribunal shall so direct, but such proceeding may be set aside either


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wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the Tri-bunal shall think fit to ensure substantial justice.

2. No application to set aside any proceeding for irregularity shall be allowed unless made within reasonable time, or if the party applying has taken any fresh step after knowledge of the irregularity.

Paragraph 27:– Where these Rules contain no provision in respect of any

matter relating to or connected with the hearing of a case under this Decree, the provisions of the Civil Procedure Rules of the Federal High Court shall, with such modifica-tions as may be necessary to render them conveniently ap-plicable, as if the applicant and the respondent were respec-tively the plaintiff and the defendant in a civil action.”

It is clear that service as stipulated in the Decree by para-graph 6(1) is mandatory to be personal service and para-graph 6(2) also made it mandatory that where personal ser-vice cannot be effected an application supported by affidavit that the person cannot be found must be made to the Tribu-nal before an order for substituted service can be made. And the provisions of 6(3) are subject to 6(2) and can only come into effect when the Tribunal has made an Order for substi-tuted service.

Looking at the judgment of the Lower Tribunal at pages 1–9 of the Record of Proceedings, the learned Chairman of the Tribunal erred in law when he assumed that service on Mr Paulinus I. Okafor was personal service and it was effec-tive:–

“Both the application for Recovery of debts and the Notice of Presentation of the application for the recovery of debts were originally filed by the plaintiff/applicant at the Failed Bank Tribu-nal Zone 2 on 11 June, 1996 and served on the defendants/ re-spondents through one Paulinus I, Okafor, an Accountant with the first defendant/ respondent at No. 136 Zik Avenue, Enugu. On 18 July, 1996, this suit was transferred to this Tribunal from Lagos Zone 2 along with many other civil suits when this Tribunal was about to commence its first sitting. When the motion for judgment, filed by the plaintiff/applicant on 5 September, 1996 came up for hearing on 24 September, 1996, I ordered that copies of the application for the Recovery of Debt as


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well as the Notice of Presentation were to be served on the defen-dants not later than 48 hours from that date, and the motion was adjourned to 10 October, 1996. In compliance with this order, the Secretary to this Tribunal sent certified true copies of the said Ap-plication and the Notice of the Presentation to the defen-dants/respondents by courier service through the United Parcel Service, Ikoyi Lagos on 25 September, 1996 as required by sched-ule 1, paragraph 5(1)(c) of the Rules of Procedure at the Tribunal. The Advice of Delivery of the documents to the defen-dants/respondents forwarded to this Tribunal by the United Parcel Service showed that one Mrs Ekeugo signed for the documents on 25 September, 1996 at 10.22a.m. Since then, the defen-dants/respondents neither entered appearance nor filed a Reply or Defence.”

Mr O.A. Uzebu learned Counsel for the plaintiff/respondent admitted before us that service of process in this matter was not served personally on all the Directors of the company. Even in the affidavit of service on Mr P.I. Okafor an Ac-countant, it was not sworn to that he was the accountant of the defendant/appellant company. And the said Mr Okafor did not file any affidavit to state that he served the directors of the company with the process he received on their behalf. Certainly there was doubt and the learned Chairman of the Lower Tribunal should have taken it into consideration Okereke v Ejiofor (supra).

Even the Companies and Allied Matters Act section 78 provides that the Court process shall be served on a com-pany in the manner provided by the Rules of Court. And this Special Appeal Tribunal in the case of Christaben Groups Ltd v Nigeria Deposit Insurance Corporation (Manager of New Nigeria Bank Plc) (supra) has held that when a statute, in this case the (Failed Bank Decree) provides the Rules of Procedure applicable to its proceedings, you do not have to look elsewhere for guidance.

The learned Chairman of the Lower Tribunal completely erred in law when he avoided to make pronouncement on schedule 1 paragraphs 6(1) and 6(2) dealing with personal service and substituted service and relied on other para-graphs 7(a) and (b), 8, 25 and 27 of the said Schedule 1, which are all subject to 6(1) and (2).


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It must be remembered that judgment on undefended list is not a trial on merit. Courts have shifted from technicalities to substantial justice.

This Appeal therefore must be allowed and the Judgment of the Lower Tribunal by Hon. Justice M.I. Edokpayi dated 14 October, 1996 is hereby set aside. And it is ordered that this case be remitted to another Failed Banks Tribunal Lagos Zone to be tried afresh.

Cost for this appeal is assessed at N1,000 to the defen-dants/appellants.

[1999] 9 N.B.L.R. (FEDERAL HIGH COURT, LAGOS DIVISION)


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Chief Thaddeus E. Inegbedion v Nigeria Deposit Insurance Corporation and others

FEDERAL HIGH COURT, LAGOS DIVISION MARDEN J Date of Judgment: 24 MARCH, 1999 Suit No.: FHC/L/CS/1397/98

Failed Banks Tribunal – Composition of – When duly con-stituted

Failed Banks Tribunal – Supervisory jurisdiction or power of judicial review of High Court – When exercisable – When not exercisable – Section 1(5) and (6) Failed Banks (Recov-ery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended)

Statutes – Interpretation of statutes – Two Conflicting De-crees – How interpreted – Which prevails

Facts Chief Thaddeus E. Inegbedion, the respondent/applicant was being prosecuted at the Failed Banks and Recovery of Debts and Financial Malpractices Tribunal, Enugu Zone since 1997, whereupon the applicant sought to move the Federal High Court for an Order enforcing and/or securing the enforcement of his fundamental rights, as set out in the copy of the statement annexed to this motion as exhibit A.

On 1 February 1999, I.O. Ajomo, Esq., learned Counsel for the first applicant/respondent filed a Motion on Notice asking that the present Motion brought by way of Enforce-ment of Fundamental Human Rights be struck out on the grounds that this Federal High Court does not have supervi-sory jurisdiction or power of Judicial Review over the Failed Banks and Recovery of Debts and Financial Malprac-tices in Banks Tribunal.

Moving the Motion on the 23 February 1999, learned Counsel to the applicants/defendants alleged that particulars of the applicant’s application in the Motion Papers sought for 14 reliefs, eleven of which are declaratory, while three


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are of Orders of injunction and that those Orders of injunc-tion are ancillary to the declarations sought.

He submitted that every single one of the declaratory prayers sought by the applicant related to and sought to nul-lify the proceedings in the criminal charge instituted against the applicant at the Enugu Zone of the Failed Banks Tribu-nal. He submitted that the effect was that these prayers sought the declaration of the Court in respect of proceedings at the Failed Banks Tribunal, Enugu Zone. This Court was requested to exercise supervisory jurisdiction and the power of judicial review over proceedings being carried on at that Tribunal.

Learned Counsel for the applicants/defendants argued that these declarations sought would affect the prosecution being carried on at the Failed Banks Tribunal Enugu Zone. He contended that this Court did not have the jurisdiction going by section 1(5) and (6) of the Failed Banks Recovery of Debt and Financial Malpractices in Banks Decree No. 18 of 1994. He submitted that as section 1(5) and (6) of the De-cree was in pari materia with section 1(8) and (9) of the Tribunals (Miscellaneous Provisions) Decree No. 9 of 1991, the Supreme Court had confirmed the complete ouster of the jurisdiction of the High Court in respect of matters before those Tribunals enumerated under that Decree.

The Counsel for applicant/respondent in reply contended in the main that the court had jurisdiction in this matter since it related to the enforcement of fundamental right of the ap-plicant as guaranteed by the Constitution and Decree No. 107, and the Failed Banks Tribunal Decree was subordinate to Decree No. 107 which was the grundnorm.

He submitted further that if the 1979 Constitution as amended by Decree No. 107 was the grundnorm any other law including a Decree which now falls into the category of ordinary law could not take away the jurisdiction of this Court to protect the applicant nor remove the fundamental right of the applicant which was not donated by statute in the first instance but enshrined by the Constitution.



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He contended further that section 1 of the Failed Banks De-cree related to Failed Banks. The question of supervisory ju-risdiction did not apply since the Decree presupposed that the applicants/ defendants would only do things permitted by the law and follow the procedure laid down by the Decree.

He argued that if the Tribunal was seen to be doing an il-legality, this Court had the power to intervene. He submitted that the laid down procedure for bringing an accused before the Tribunal was not followed. He argued that the question of supervisory jurisdiction would definitely arise since they were not following the law.

Section 1(5) of Failed Banks (Recovery of Debts) and Fi-nancial Malpractices in Banks Decree No. 18 of 1994 states:–

“Notwithstanding the provisions of the Constitution of the Federal Republic of Nigeria, 1979 as amended, or any enactment to the contrary, the supervisory jurisdiction or Power of Judicial Review of a High Court shall not extend to any matter or proceeding be-fore the Tribunal duly constituted in this Decree.”

Held – 1. By the wordings of section 1(5) of the Failed Banks

(Recovery of Debts) and Financial Malpractices in Banks Decree, notwithstanding the supremacy of any provisions of the Constitution of 1979 as amended by Decree No. 107 or any law whatsoever to the contrary, the supervisory jurisdiction and power of judicial review of the High Court shall not extend to any matter or pro-ceeding before the Failed Banks Tribunal duly consti-tuted.

2. The Failed Banks Tribunal is said to be duly constituted when it consists of a serving or retired judge of the Fed-eral High Court or of the High Court of State or of the Federal Capital Territory, Abuja.

3. Once it is shown that the Tribunal is duly constituted, no Court shall entertain any matter or proceedings con-nected with that Tribunal. The word “any matter or pro-ceedings” is all embracing and it definitely includes



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issues that have bearing with Chapter IV of the Constitu-tion as amended and issues touching on Fundamental Rights.

Per curiam “In the instant case, there is no evidence to show that the

Enugu Zone of the Failed Banks Tribunal is not duly consti-tuted. What the applicant is complaining of is that the pro-cedure for bringing him (applicant) was not followed. But is that the issue? It is my view that it is enough if it is shown that the Tribunal is duly constituted whether or not the pro-cedure for bringing an accused is followed. Section 1(5) of the Decree says no Court shall (in fact it is mandatory) en-tertain any matter or proceedings connected with that Tri-bunal. The word any matter or proceedings is all embracing. It definitely include issues that have bearing with Chapter IV of the Constitution as amended. To this, one should be bold to say includes issues touching on Fundamental Rights. The ouster is absolute in the sense that one cannot invoke the Constitution or any law to assume jurisdiction. This matter was dealt with clearly in the Supreme Court case of Lekwot v Judicial Tribunal (1997) 8 NWLR (Part 515) 22 at 27 where Belgore, JSC said that all Courts in this country derive their authority and therefore jurisdiction ei-ther under the Constitution or specific statutes made under the Constitution.”

4. Where two decrees are in conflict, the latter decree over-rides an earlier one since the latter seeks to modify or amend the earlier.

Per curiam “The argument of the applicant’s Counsel that Decree No.

107 is superior to the Failed Banks Decree No. 18 of 1994 is not tenable in that the Failed Bank Decree seeks to amend the provisions of Decree No. 107. This is in harmony with the Supremacy of a Decree over any law. Where two De-crees are in conflict a latter Decree overrides an earlier one since the latter seeks to modify or amend the earlier. The Decree seeks to make the provisions of the Constitution which is the grundnorm inferior in matters relating to Failed Banks. Therefore, any argument on the judicial powers un-der sections 6 and 230 of the Constitution of the Federal Republic of Nigeria, 1979 as amended by Decree 107 can-not stand because the Decree makes Decree No. 107



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subordinate in matters under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994.

In view of the foregoing, therefore, I hereby rule that this Court has no jurisdiction to entertain any matter before the Failed Banks Tribunal, Enugu Zone which is duly consti-tuted and there is no evidence to the contrary.”

Objection upheld.


Nigerian Agwuna v Attorney-General of the Federation (1995) 5 NWLR (Part 396) 418 Lekwot v Judicial Tribunal (1997) 8 NWLR (Part 515) 22

Nigerian statute referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), section 1(5)

Counsel For the applicant: Johnson O. Esezeobo For the respondents: I.O. Ajomo

Judgment MARDEN J: This ruling has to do with the troublesome question of the jurisdiction of this Court. Sequel to a Motion on Notice filed by Johnson O. Esezeobor, Esquire of Coun-sel to the applicant for the enforcement of the applicants’ Fundamental Rights, under Order 2 Rule (1) and Order 4 Rule 1 of the Fundamental Rights (Enforcement Procedure) Rules, 1979 on 17 December, 1998 leave having been ob-tained to bring the application on 14 December, 1998.

The brief facts of the case as it relates to the following Ruling are that:–

Chief Thaddeus E. Inegbedion, the respondent/applicant is being prosecuted at the Failed Banks and Recovery of Debts and Financial Malpractices Tribunal, Enugu Zone since


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1997. Whereupon the applicant sought to move this Court for an Order enforcing and/or securing the enforcement of his fundamental rights, as set out in the copy of the state-ment annexed to this motion as exhibit A.

On 1 February 1999, I.O. Ajomo, Esquire, learned Counsel for the first applicant/respondent filed a Motion on Notice asking that the present Motion brought by way of Enforce-ment of Fundamental Human Rights be struck out on the grounds that this Court does not have supervisory jurisdic-tion or power of Judicial Review over the Failed Banks and Recovery of Debts and Financial Malpractices in Banks Tri-bunal.

Moving the Motion on the 23 February, 1999, learned Counsel to the applicants/defendants alleged that particulars of the applicant’s application in the Motion Papers sought for fourteen reliefs, eleven of which are declaratory, while three are of Orders of Injunction and that those Orders of Injunction are ancillary to the declarations sought.

He submitted that every single one of the declaratory prayers made by the applicant relates to and seeks to nullify the proceedings in the criminal charge instituted against the applicant at the Enugu Zone of the Failed Banks Tribunal. He submitted that the effect is that these prayers seek the declaration of the Court in respect of proceedings at the Failed Banks Tribunal, Enugu Zone. This Court is requested to exercise supervisory jurisdiction and the power of judicial review over proceedings being carried on at that Tribunal.

Learned Counsel for the applicant/respondents argued that these declaration sought would affect the prosecution being carried on at the Failed Banks Tribunal, Enugu Zone. He contended that this Court does not have the jurisdiction by section 1(5) and (6) of the Failed Banks Recovery of Debt and Financial Malpractices in Banks Decree No. 18 of 1994. He submitted that section 1(5) and (6) of the Decree is in pari materia with section 1(8) and (9) of the Tribunals (Mis-cellaneous Provisions) Decree No. 9 of 1991. The Supreme Court has confirmed the complete ouster of the jurisdiction


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of the High Court in respect of matters before those Tribu-nals enumerated under that Decree. He referred to the case of Agwuna v Attorney-General of the Federation (1995) 5 NWLR (Part 398) 418. He submitted that the principles of that case apply to this namely that this Court cannot inter-fere to exercise jurisdiction supervisory or by way of judi-cial review over the Failed Banks Tribunal. He urged me to strike out the application on that ground.

In the alternative, learned Counsel contended that the ap-plicant has not established any infraction of his fundamental right if we go by the entire averments in the affidavit sup-porting the application. That the applicant has not disclosed any reasonable cause of action.

Learned Counsel argued further that giving the best inter-pretation of the papers filed by the applicant would appear that the applicant’s right has to do with the right to fair hear-ing. He submitted that the incidence of fair hearing pre sup-poses that the composition of the adjudicating tribunal must not be such as to lead to a real likelihood of bias to the ap-plicant. Gani Fawehinmi v Legal Pract. Discp. Committee (1985) 2 NWLR (Part 7) 300 at 333–337. The instances of the likelihood of bias are as follows:– (a) Where the people involved in the investigation

and/or prosecution sit on the Tribunal adjudicating over the matter.

(b) Where potential witnesses sit at the Tribunal. (c) Where the Chairman of the Tribunal has previous

knowledge of the facts. (d) Where there is personal hostility by the tribunal to

the applicant. (e) Where the Tribunal is on undue haste. Learned Counsel submitted that the affidavit in support makes no reference to any of these points.

Learned Counsel argued that the applicant is concerned with the circumstances leading to his prosecution and the motive of the prosecution and submit that it is irrelevant to the proceedings before the Tribunal.


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Learned Counsel submitted that the action be stayed as an abuse of process on the grounds of “res judicata” because the subject matter of the Declaration sought has been sub-mitted to the Failed Banks Tribunal, Enugu Zone and re-fused in Charge No. FHC/EZ/06C/96 between the Federal Republic of Nigeria and Chief Thaddeus Inegbedion as ex-hibit AAl and further affidavit dated 22 February, 1999.

He urged this Court to dismiss the action. In reply, Counsel for the applicant/respondent started with

ground four of the respondent/applicant prayer. He submit-ted that the decision contained in the Ruling of the Tribunal exhibit AA, is irrelevant to this proceedings and cannot op-erate as res judicata. He contended that the submission be-fore the Enugu Zone of the Failed Banks Tribunal was only by way of Preliminary Objection it had nothing to do with the enforcement of the applicant/respondent fundamental right. He argued further that had that case succeeded the ap-plicant/respondent could come to this Court in respect of the enforcement of his fundamental right.

Learned Counsel submitted that whatever Ruling was given at the Failed Banks Tribunal Enugu Zone has no rele-vance to the application for the enforcement of Fundamental Right, we are talking about. The Supreme Court in Kuti v Attorney-General of the Federation (1985) 6 SCR 246 at 274–275. He further submitted that even if what happened in Enugu in the no case submission was enforcement of the ap-plicant/respondent Fundamental Right he could still in so far as his prosecution was still continuing and to the extent that it is illegal, bring as many actions as he could until his in-fringed right is redressed.

As to the objection to the jurisdiction of this Court, learned Counsel contended that it is misconceived and has to be dis-missed.

He contended further that section 1 of the Failed Banks Decree relates to Failed Banks. The question of supervisory jurisdiction does not apply since the Decree presupposes that the respondent/applicants will only do things permitted by the law and follow the procedure laid down by the Decree.


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He argued that if the Tribunal is seen to be doing an ille-gality this Court has the power to intervene. He submitted that the laid down procedure for bringing an accused before the Tribunal was not followed. He argued that the question of supervisory jurisdiction definitely arises since they are not following the law. He said the applicant is asking this Court to protect him from illegal prosecution and referred me to Ikonne v C.O.P. (1986) 1 SC. 282 at 318–319 and also Federal Civil Service Commission v Laoye (1989) 2 NWLR (Part 106) 652 at 702.

He further submitted that the (Miscellaneous Offences) Tribunal Decree, 1991 quoted by the respondent/applicant does not apply as what is before us is Fundamental Right Enforcement Procedure. The Procedure of Enugu Tribunal is not before this Court neither is it a party. Decree No. 107, section 230(1)(s) gives jurisdiction to this Court to make declarations. The Failed Banks Tribunal is an agency of the Federal Government under the executive. If the Decree No. 107 confers jurisdiction then the Failed Banks Tribunal De-cree cannot take it away. He referred this Court to Osadebe v Attorney-General of Bendel State (1991) 1 NWLR (Part 169) 525. The Failed Banks Tribunal Decree is subordinate to Decree 107 which is a grundnorm. He submitted that the objection as to jurisdiction did not take cognisance of the whole judiciary under the Nigerian Legal System and re-ferred me to locus standi and Judicial Review by S.N. Thio page 3 and urged me to dismiss this arm of the respon-dents/applicants’ objection also.

As to the second and third arms of the respon-dents/applicants’ objection as to rules of Court. He con-tended that ordinary rules of this Court do not apply to pro-ceedings for the enforcement of Fundamental Rights Proce-dure Rules. He said the Special Rules of Fundamental Hu-man Rights Procedure is superior and has elevated the status of Fundamental Rights. He submitted that the provisions of section 42 of the 1979 Constitution as amended by Decree No. 107 of 1993 on the strength of which the special rules


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were made are superior not only to the ordinary rules of the Federal High Court but also to the law establishing this Court. Lekwot v Judicial Tribunal (1997) 8 NWLR (Part 515) 22 and Okoje v Attorney-General, Lagos State (1981) 2 N.C.L.R. The Court held that a Fundamental Right cannot be taken away by ordinary law.

He submitted further that if the 1979 Constitution as amended by Decree 107 is the grundnorm any other law in-cluding a Decree which now falls into the category of ordi-nary law cannot take away the jurisdiction of this Court to protect the applicant nor remove the fundamental right of the applicant which was not donated by statute in the first in-stance but enshrined by the Constitution and referred me to the statement of Lord Denman, CJ in R. v Cheltenham Commissioners (1841) 1 Q.B. 407.

On points of law learned Counsel for the respon-dent/applicants submitted that the 1979 Constitution is sub-ject to the provisions of Decrees of the Federal Government and referred to Labiyi v Anretiola (1992) 8 NWLR (Part 258) 139 at 162. That the objections of Ground 2 and 3 are within the inherent jurisdiction of this Court.

These are the arguments of the parties in this Ruling as it stands.

The issues for the determination of this Court are four namely:– (1) Whether this Court lacks jurisdiction supervisory or

judicial review over the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Tribu-nal.

(2) Whether applicant has not established any infraction of his Fundamental Rights.

(3) Whether applicant has not disclosed any reasonable cause of action.

(4) Whether the action should be stayed as an abuse of process on the grounds of res judicata in that the


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subject matter of Declaration sought has been sub-mitted to the Failed Banks Tribunal, Enugu Zone and refused.

On the issue of jurisdiction, Counsel for the respon-dent/applicant is relying on the Motion on Notice dated 17 December, 1998 to the effect that the applicant seeking for 14 reliefs out of which 11 are in the nature of declaratory reliefs while three are Orders of Injunction. He then submit-ted that every single one of the declaratory prayers made by the applicant relates to and seek to nullify the proceedings in the criminal charge preferred against the applicant at the Enugu Zone of the Failed Banks Tribunal and the immedi-ate impact is to exercise supervisory jurisdiction and power of judicial review over the proceedings of that Tribunal. He submitted that section 1(5) and (6) of the Failed Banks (Re-covery of Debts) and Financial Malpractices in Banks De-cree No. 18 of 1994 oust the jurisdiction of the Federal High Court.

For the avoidance of doubt, section 1(5) of the Decree states:–

“Notwithstanding the provisions of the Constitution of the Federal Republic of 1979 as amended, or any enactment to the contrary, the supervisory jurisdiction or Power of Judicial Review of a High Court shall not extend to any matter or proceeding before the Tri-bunal duly constituted in this Decree.”

What then is the effect of this provision? Learned Counsel submitted that the provisions of section

1(5) and (6) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 is in pari materia with section 1(8) and (9) Tribunal Miscellane-ous Provision Decree No. 9 of 1991. He cited the Supreme Court case of Agwuna v Attorney-General of the Federation (1995) 5 NWLR (Part 396) page 418.

A careful perusal of the wordings of section 1(5) of the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree reveals that notwithstanding the su-premacy of any provision of the Constitution of 1979 as amended by Decree No. 107 or any law whatsoever to the


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contrary, the supervisory jurisdiction and power of judicial review of the High Court shall not (mandatory) extend to any matter or proceeding before the Tribunal duly consti-tuted.

Going by this, therefore, it is sufficient if the respondent can show that the Tribunal is duly constituted. And a Tribu-nal is said to be duly constituted when it consists of a serv-ing or retired judge of the Federal High Court or of the High Court of State or of the Federal Capital Territory, Abuja.

In the instant case, there is no evidence to show that the Enugu Zone of the Failed Banks Tribunal is not duly consti-tuted. What the applicant is complaining of is that the proce-dure for bringing him (applicant) was not followed. But is that the issue? It is my view that it is enough if it is shown that the Tribunal is duly constituted whether or not the pro-cedure for bringing an accused is followed. Section 1(5) of the Decree says no Court shall (in fact it is mandatory) en-tertain any matter or proceedings connected with that Tribu-nal. The word any matter or proceedings is all embracing. It definitely includes issues that has bearing with Chapter IV of the Constitution as amended.

To this, one should be bold to say includes issues touching on Fundamental Rights. The ouster is absolute in the sense that one cannot invoke the Constitution or any law to as-sume jurisdiction. This matter was dealt with clearly in the Supreme Court case of Lekwot v Judicial Tribunal (1997) 8 NWLR (Part 515) 22 at 27 where Belgore, JSC said that all courts in this country derive their authority and therefore ju-risdiction either under the Constitution or specific statutes made under the Constitution.

In the instant case, Decree No. 18 of 1994 ousts the juris-diction of any other Court except the confirming authority. As such without any statutory provisions allowing this Court to assume jurisdiction in matters under the said Decree, it will amount to what the Supreme Court called judicial defi-ance to ignore lack of jurisdiction (see Lekwot v Judicial Tribunal (supra)).


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The argument of the applicant’s Counsel that Decree No. 107 is superior to the Failed Banks Decree No. 18 of 1994 is not tenable in that the Failed Bank Decree seeks to amend the provisions of Decree No. 107. This is in harmony with the Supremacy of a Decree over any law. Where two De-crees are in conflict a latter Decree overrides an earlier one since the latter seeks to modify or amend the earlier. The Decree seeks to make the provisions of the Constitution which is the grundnorm inferior in matters relating to Failed Banks. Therefore, any argument on the judicial powers un-der sections 6 and 230 of the Constitution of the Federal Republic of Nigeria 1979 as amended by Decree No. 107 cannot stand because the Decree makes Decree No. 107 subordinate in matters under the Failed Banks (Recovery of Debts) and Financial Malpractices in Bank Decree No. 18 of 1994 (as amended).

In view of the foregoing, therefore, I hereby rule that this Court has no jurisdiction to entertain any matter before the Failed Banks Tribunal, Enugu Zone which is duly consti-tuted and there is no evidence to the contrary.

It is no longer necessary to go into the other issues for de-termination, since I lack the jurisdiction to entertain any matter before that Tribunal.

That is my ruling.

[1999] 9 N.B.L.R. (COURT OF APPEAL, ENUGU DIVISION)

Co-operative and Comm Bank v. O’Silvawax International Ltd 393

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Co-operative and Commerce Bank (Nigeria) Plc v O’Silvawax International Ltd and others

COURT OF APPEAL, ENUGU DIVISION TOBI, FABIYI, MUHAMMAD JJCA Date of Judgment: 29 MARCH, 1999 Suit No.: CA/E/109M/97

Banking – Bank – Revocation of banking licence – Effect of – Whether amounts to death of the Company Banking – Bank – Revocation of licence – Whether a Bank whose licence has been revoked can sue or be sued or prose-cute an appeal Company Law – Legal personality of Companies – When it ceases Facts The appellant sought and was granted the following orders on the 24 March, 1998 by the Court of Appeal:– (i) An order of the Honourable Court extending the

time within which the applicant can seek leave to appeal against the ex parte orders of the Federal High Court, Enugu, made on 12 November, 1996, and 19 March, 1997;

(ii) An order of the Honourable Court extending the time within which the applicant can appeal against the ex parte orders of the Federal High Court, Enugu, made on 12 November, 1996, and 19 March, 1997; and

(iii) An order of the Honourable Court extending the time within which the applicant can appeal against the ex parte orders of the Federal High Court, Enugu, made on 12 November, 1996 and 19 March, 1997.

Counsel for the first and second respondents however, raised a preliminary objection contending in the main that the ap-peal before the Court filed pursuant to the order of court dated 24 March, 1998 was incompetent on the grounds, inter alia, that the appellant could not have got those orders



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because at the time the orders were made, the licence of the bank had been revoked by the Central Bank and a winding up order already made against it by the Federal High Court. Hence at the time the orders were being made, the bank was already dead, and could therefore not have been in a posi-tion to prosecute the appeal. All the orders made by the Court would therefore be null and void. Held – 1. The revocation of licence of a Bank by the Central Bank

of Nigeria does not necessarily remove the “life” of the Bank thereby making it incapable of suing or being sued or barring it from becoming an appellant or a respondent in the appeal process.

2. The revocation of the licence of a Bank could have indi-cated an ill-disposition, an acute and serious ailment. It does not go beyond that to herald and or constitute its death. The bank remained alive possessing its legal per-sonality as sick as it could have been and as indicated by the revocation of its licence.

3. The order of winding up by the Court however changed not only its effectiveness as a bank, as a body corporate, but also brings about its death. The appointment of a re-ceiver by the same court can be likened to naming an undertaker who was not only to prepare for but to ensure its burial.

4. The dissolution of legal person is analogous to the death of an ordinary human person. Dead men are no longer legal persons in the eye of the law as they have laid down their legal personality with their lives at death. Being destitute of rights or interest they can neither sue nor be sued.

Objection sustained.


Nigerian Ezenwosu v Ngonadi (1988) 3 NWLR (Part 81) 163 Nzom v Jinadu (1987) 3 NWLR (Part 51) 533 Opebiyi v Oshoboja (1976) 9 and 10 SC 195



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Nigerian statute referred to in the judgment

Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, section 73(1)

Counsel For the appellant: Dr Ilochi Okafor, S.A.N.

For first – second respondents: Chief S.O. Nwogu

Judgment

MUHAMMAD JCA: (Delivering the lead judgment) On 24 March, 1998, Dr Ilochi, S.A.N., moved this Court in terms of the following prayers:– (i) An order of the Honourable Court extending the

time within which the applicant can seek leave to appeal against the ex parte orders of the Federal High Court, Enugu, made on 12 November, 1996 and 19 March, 1997;

(ii) An order of the Honourable Court extending the time within which the applicant can appeal against the ex parte orders of the Federal High Court, Enugu, made on 12 November, 1996, and 19 March, 1997; and

(iii) An order of the Honourable Court extending the time within which the applicant can appeal against the ex parte orders of the Federal High Court, Enugu, made on 12 November, 1996 and 19 March, 1997.

The court granted the orders as prayed.

Chief S.O. Nwogu, Counsel for first and second respon-dents, filed a Notice of Preliminary Objection on 22 July, 1998. The notice was dated 21 July, 1998. The objection which was brought under Order 3(15)(1) of Rules of the Court alleged that the appeal before this Court filed pursuant to the order of this Court given on 24 March, 1998, is in-competent. Applicants also alleged that the very orders of


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this Court facilitating the appeal are null and void. The ap-plicants’ objection are based on the following grounds:– (a) The appellant which is a body corporate established

under the Companies and Allied Matters Act, 1990 as a banking institution had her licence revoked by the Governor of the Central Bank, Chief Paul Og-wuma, under section 12 of the Banks and Other Fi-nancial Institutions Decree, 1991 as amended on 16 January, 1998.

(b) The Federal High Court at Enugu wound-up the first respondent/appellant on 12 March, 1998 by court order.

(c) The first respondent/appellant did not exist at the time the order of the Court was made on 24 March, 1998.

The applicants’ Counsel submitted that the effect of the winding-up order of the Federal High Court is that the ap-pellant had died from the date of the order. The appellant with that order had ceased to have legal personality and thus incapable of maintaining a suit or prosecuting an appeal. In support of this he cited Ezenwosu v Peter Ngonadi (1988) 3 NWLR (Part 81) page 163, 174–176 and Nzom v Jinadu (1987) 1 NWLR (Part 51) page 533 at 539. Counsel urged us to refer to the court’s ruling of 24 March, 1998 and take judicial notice of the ruling of the Federal High Court, Enugu, and the winding-up order given and dated 12 March, 1998, and thereby sustain the objection.

Nwangene for the respondent had nothing much to com-mend for his clients. He argued that the applicants were still maintaining the suit at the court below against the same per-son they now call dead. Counsel urged the court to dismiss the objection.

The issue to decide on whether or not to sustain the objec-tion raised by applicant is an easy one. Can a non-existing person institute and or maintain an appeal?

By virtue of section 73(1)(m) of the Evidence Act, I take it that as at 24 March, 1998, when this Court granted first


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respondent/appellant the orders sought to facilitate its ap-peal, the Federal High Court, Enugu, had ordered that it be wound up and a receiver had been appointed consequen-tially. The order was made on 12 March, 1998. I take it also that prior to the order that wound up the first respon-dent/appellant, its licence as a banking institution had been revoked by the Governor of the Central Bank pursuant to his powers as contained in the Banking and Financial Matters Decree, 1998. This was on 16 January, 1998.

It is a common ground as submitted by Counsel to both applicant and respondent in this matter that the first respon-dent/applicant is a body corporate established under the Companies and Allied Matters Act, 1990.

I find the submissions made by applicants’ Counsel terse and brief as they seem, to be precise and germane to the is-sue raised by the applicant before this Court. The authorities cited by Counsel were also apposite.

It is my considered view that revocation of licence of the first respondent by the Central Bank on 16 January, 1998, did not necessarily remove the “life”, so to say, of the first respondent thereby making it incapable of suing or being sued or barring it from becoming an appellant or a respon-dent in the appeal process. The revocation of the licence could have indicated an ill-disposition, an acute and serious ailment. It did not go beyond that to herald and or constitute the death of the first respondent. The bank remained alive possessing its legal personality as sick as it could have been and as indicated by the revocation of its licence. The order of winding up by the Federal High Court on 12 March, 1998, however, changed not only its effectiveness as a bank, as a body corporate, but also brought about the “death” of the first respondent. The appointment of a receiver by the same court can be likened to naming an undertaker who was not only to prepare for but to ensure the burial of the first respondent.

In essence the legal personality which first respondent pos-sessed by virtue of its being a body corporate came to an


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absolute end with the issuance of the winding up order of 12 March, 1998.

Yet this Court, as stated earlier, on 24 March, 1998, granted the prayers of this “dead” person that is, the first respon-dent/appellant. By his objection, Chief Nwogu of Counsel is saying that it is not tenable in law for a dead person to ap-proach a court of law and make any prayers. I also understand the objection to be saying that in law it is not tenable for court to listen to the prayers of such a dead person let alone grant the purported prayers. I further understand applicants’ Counsel to be saying that even where prayers of a “dead” person are pur-portedly listened to and granted, the deceased, because he no longer exists, cannot prosecute his appeal. I hold the same view because that is the position of the law.

The Supreme Court’s decision in Tesi Opebiyi v Shittu Oshoboja and another (1976) 9 and 10 SC. 195 is most ap-plicable to the circumstance and facts which gave rise to the objection the subject matter of this ruling. In that case, as in the present one, the order for extension of time within which to appeal was made when there were no respondents to the said appeal. The original defendants who should have been the respondents died before the court’s order for extension of time was made. The Supreme Court held partly, that it was not legally tenable to issue the order for extension of time under such a situation.

It must be reiterated here as done by Oputa, JSC, as he then was in Nzom v Jinadu that:–

“. . . the dissolution of legal person is analogous to the death of an ordinary human person . . . dead men are no longer legal persons in the eye of the law as they have laid down their legal personality with their lives at death. Being destitute of rights or interest they can neither sue nor be sued.”

I unhesitatingly add that such dead men cannot equally ap-peal against decisions not in their favour nor can they re-spond in an appeal, attempting to sustain such decisions which, during their lifespan, favoured them. Whether at trial in first instance courts or on appeal, dead men lack legal ex-istence which parties must have to give them competence.


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The first respondent here, clearly, was not in existence on 24 March, 1998 when it purportedly acquired the orders given that day.

I am of the view that orders given to a non-existing party is ipso facto null and void. The application has succeeded.

On the whole, the objection raised by applicants is hereby sustained. The application has succeeded. The orders of this Court given on 24 March, 1998 seeking to facilitate the ap-peal by a dead legal person are null and void. The appeal sought to be facilitated is incompetent.

I am making no order as to cost. TOBI JCA: I agree. FABIYI JCA: I agree. Application granted.



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African Pulp and Paper Mills Limited and others v Nigeria Deposit Insurance Corporation

SPECIAL APPEAL TRIBUNAL, LAGOS AGBAJE, ODUNLAMI JJ Date of Judgment: 6 APRIL, 1999 Suit No.: SAT/FBT/482/98

Banking – Banker and customer relationship – Nature of

Banking – Equipment leasing – Rental dues thereon – Whether a debt owed to bank under the Decree Banking – Failed Banks Tribunal – Interest on judgment debit – Whether has power to award interest on judgment debt in civil trials – Rate thereof – Whether a Failed Bank can still charge interest

Banking – Failed Banks Tribunal – Jurisdiction of over matters “arising in the ordinary course of business” – Mean-ing of – Section 3(1)(a) Failed Banks Decree No. 18 of 1994 (as amended) considered

Banking – Failed Banks Tribunal – Whether bound to accept documentary evidence in civil trial – Where uncontroverted Facts By Notice of Application for the Recovery of Debt filed in the Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Tribunal, Enugu Zone, the respondent Nigeria Deposit Insurance Corporation (“NDIC” for short) as Receiver of Alpha Merchant Bank PLC, now in Liquida-tion pleaded as follows:–

Alpha Merchant Bank Plc now in liquidation (hereinafter referred to as “the Bank”) as lessor and at the request of the first respondent as lessee granted credit facilities in 1991 in the sum of US$3,600,000 (three million six hundred thou-sand dollars), procured under the NEXIM African Devel-opment Bank/Export Stimulation Loan (ADB/ESL) project to enable the first respondent finance the procurement of capital equipment for paper milling (jumbo rolls, writing grade paper, pulp processing), and in consequence an


African Pulp and Paper Mills Ltd v. Nigeria Deposit Insurance 401

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Equipment Lease Agreement/Equipment Sale and Lease Back Agreement was put in place between the Bank and the respondent.

The said facilities were released to the first respondent to purchase the equipment. The facilities were guaranteed by the second and third respondents.

The respondent contended that though the facility was ac-tually utilised, the company had not started operation, and so the first respondent could not liquidate the indebtedness. The respondent also denied causing the failure of Alpha Mer-chant Bank. Alternatively, the respondent prayed the Court to order the applicant to exercise its rights under the equip-ment lease agreement to dispose of the leased equipment by whatever manner it deemed fit.

The applicant called a witness and tendered in evidence various documents in evidence but the respondent called no witness.

In a considered judgment the Lower Tribunal found in fa-vour of the applicant in the sum of $6,715,994.08 and inter-est at the rate of 12½% per annum until the judgment debt is fully liquidated.

Being dissatisfied with this judgment, the respondents ap-pealed to the Special Appeal Tribunal on grounds, inter alia, that the Tribunal lacked jurisdiction to entertain the applica-tion for recovery of debt and that the rate of interest awarded on the judgment debt was at variance with the rules of court applicable.

Held – 1. The relationship of banker to customer is one of con-

tract. It consists of a general contract, which is basic to all transactions together with special contracts which arise only as they are brought into being in relation to specific transactions or banking services. The essential distinction is between obligations which come into exis-tence upon the creation of the banker/customer relation-ship and obligations assumed by specific agreement.



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2. Under Order 45 Rule 7 of the Federal High Court (Civil Procedure) Rules which are applicable to the proceed-ings now before us on appeal, interest can be awarded on judgment debts from the date of judgment until the date of full payment. The interest permissible under the Federal High Court (Civil Procedures) Rules is a maxi-mum of 5% annum. Interest is payable either by contract or by statute.

3. The fact that the bank has been declared a failed bank does not put an end to the agreement which will con-tinue to run its course.

In the instant case, the Lower Tribunal was right to enter judgment for the respondent amount due to the respon-dent-Principal debt and interest – after the Bank has been declared a failed bank.

4. The interest rate which the Failed Banks Tribunal can award on judgment debt is 5%. Therefore, the 12½% in-terest awarded by the Lower Tribunal will be set aside by the Special Appeal Tribunal and same substituted with 5% per annum.

5. Documentary evidence like promissory notes and ir-revocable standing orders are unlike oral evidence which if given and uncontroverted, the trial Court or Tribunal must accept it.

6. The provisions of section 3(1)(a) of Failed Banks De-cree No. 18 of 1994 (as amended) relating to the civil jurisdiction of the Lower Tribunal do not contain the expression “arising in the ordinary course of banking business” but the expression “arising in the ordinary course of business”. This is why we are of the view that the definition of “Banking business” in section 61 of BOFID will not be applicable here since we are con-cerned in section 3(1)(a) of the Decree with “business” simpliciter and not “banking business”.

7. To limit the definition of the word “business” in section 3(1)(a) of the Decree to its definition when it is coupled with the word “banking”, is wrong, because the Decree



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does not couple it with that word. On the applicable canon of construction the word “business” in its ordinary meaning is “concerns”, or “affair”.

8. The word “business” in section 3(1)(a) of the Decree will cover not only obligations which come into exis-tence upon the creation of the banker-customer relation-ships but also obligations which are subsequently as-sumed by specific agreements.

9. Any debt owed to a failed bank arising in the ordinary course of obligations assumed by a specific contract will fall within the jurisdiction of the Lower Tribunal under section 3(1)(a) of the Decree. Needless to say that the same thing goes for any debt owed to a failed bank arising in the ordinary course of obligations which come into existence upon the creation of banker customer relationship.

10. Rentals due and unpaid on Equipment Lease Agreement, qualify as debts within the meaning of that word in sec-tion 29 of the Decree. In the instant case, rentals due to the Bank and unpaid in exhibit APA.9 the Equipment Lease Agreement, are debts owed to the Bank, arising in the ordinary course of business.

Appeal dismissed.


Nigerian Boshali v Allied Commercial Exporters Ltd (1961) All NLR 917 Nigerian Maritime Services Ltd v Afolabi (1978) 2 SC 79 Odulaja v Haddad (1973) 11 SC 35

Nigerian statutes referred to in the judgment Banks and Other Financial Institutions Decree No. 25 of 1991, section 61 Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), sections 3(1)(a), 9, 29



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Nigerian rules of court referred to in the judgment Federal High Court (Civil Procedure) Rules, Order 45 Rule 7

Book referred to in the judgment Paget’s Law of Banking (10ed) page 159, chapter 10

Judgment AGBAJE J: By Notice of Application for the Recovery of Debt filed in the Failed Banks (Recovery of Debts) and Fi-nancial Malpractices in Banks Tribunal, Enugu Zone, here-inafter referred to as “the Lower Tribunal”, the respondent Nigeria Deposit Insurance Corporation (“NDIC” for short) as Receiver of Alpha Merchant Bank Plc, now in Liquida-tion hereinafter referred to as the “Bank” pleaded as follows in the paragraph of the Application headed State-ment/Particulars of indebtedness:–

Statement/Particulars of Indebtedness i. “Alpha Merchant Bank Plc now in liquidation (hereinafter

referred to as the ‘Bank’) as Lessor and at the request of the first respondent as Lessee granted credit facilities in 1991 in the sum of US$3,600,000 (three million six hundred thousand dollars), procured under the NEXIM African De-velopment Bank/Export Stimulation loan (ADB/ESL) pro-ject to enable the first respondent finance the procurement of capital equipment for paper milling (jumbo rolls, writing grade paper, pulp processing), and in consequence an Equipment Lease Agreement/Equipment Sale and Lease Back Agreement was put in place between the Bank and the respondent all in the following circumstances:–

(a) By an Agreement (described as ‘Subsidiary Loan Agreement’) made on 28 November, 1989 between the Bank and the Central Bank of Nigeria (Hereinafter called the ‘CBN’), the CBN agreed to procure for the bank after due processing of application from eligible exporters, funds, in foreign exchange for utilisation by such exporters in financing export oriented transactions.

(b) Under the said Agreement, the Nigeria Export Credit Guarantee and Insurance Corporation (‘NEXIM’), then c/o Agricultural Finance Department of the CBN secured about US$245 Million for allocation to par-ticipating banks in tranches.


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(c) The first respondent formally applied for the loan in respect of this Export Stimulation Loan project on 10 October, 1990.

(d) By an application dated 12 November, 1990, the bank applied for and was, on 29 April, 1991 allocated under the third tranche offer by NEXIM the sum of US$3,600,000 in favour of the first respondent.

(e) By a letter dated 7 May, 1991, the bank responded to the favourable letter from NEXIM as mentioned in subparagraph (d) above.

(f) By a letter dated 15 May, 1991, NEXIM wrote ‘to formally offer (the) bank an Export Stimulation Loan facility’ of US$8,600,000.

ii. The first respondent (African Pulp and Paper Mills Limited) by its letter dated 10 October, 1991 applied to the bank for the grant of an ADB/ESL facility on the third tranche con-sideration in the sum of US$3,600,000 (Three Million, Six Hundred Thousand Dollars only) to enable it procure ma-chinery, equipments and spare parts for the setting up of the first respondents paper milling/manufacturing edifice at Aba, Abia State.

iii. By a letter dated 20 May, 1991, the bank formally wrote NEXIM to accept the latter’s office of 15 May, 1991 and to request NEXIM to ‘Put us in fund’, that is make available to the bank’s account with Bankers Trust Company of Broadgate London, inter alia, the sum of US$3,600,000 ‘in respect of African Pulp and Paper Mills Limited’. The bank’s statement in its account No. 022/07/10396 with Un-ion Bank of Nigeria Plc London dated 31 July, 1992 shows the remittance and utilisation by first respondent of the sum of US$3,600,000. There are remittance telexes in favour of the U.K. equipment exporters – Nippon Graphics (U.K.) Ltd.

iv. (a) Under the Agreement(s) between the bank and NEXIM, the bank was expected and obligated to de-posit promissory notes as well as irrevocable standing orders with the CBN as pre-condition for each draw down on the foreign currency credit facility, that is, these documents were mandatory pre-disbursement documents to be provided by the bank, in this way, the CBN always reached and was enabled to reach out for the bank’s Naira resources with the CBN.

(b) Furthermore, under the said Agreement(s), the cur-rency repayment by the bank ‘shall be the British


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Pound or U.S. Dollars’ or any other currency accept-able to the CBN as per the Loan Repayment Schedule.

v. (a) On or about the 9 July, 1992 the bank and the first re-spondent formally entered into a duly executed Lease Agreement which, inter alia, not only vested the Legal ownership of the Leased equipment (which formed the schedule to the Agreement) on the bank as lessor but also enunciated that title to the equipment leased ‘Shall remain the personal property of the lessor and shall continue in the ownership of the Lessor’.

(b) The Equipment Lease Agreement further enjoined the first respondent as lessee to ‘pay rentals to the lessor in fourteen (14) equal quarterly amounts of US $321,416.43 in advance’ and also that ‘punctual pay-ment shall be the essence of this lease’ during the stipulated period for total loan repayment.

(c) The said Agreement however, granted the first re-spondent an 18 month moratorium or lease-in-process period during which period only ascertained or de-fined/designated dollars interest payments would be made by the first respondent strictly in accordance with the schedule of interests.

vi. By its letter dated 3 July, 1991, the bank formally sent a letter of offer to the first respondent whose acceptance of said offer was evinced by the Equipment Lease Agreement mentioned above as well as first respondent’s utilisation or enjoyment of dollar disbursements made to it by the bank as early as 27 May, 1991 (‘value date’) as evidenced by first respondents dollar blocked account. There was also a duly executed offer and acceptance document which the said letter of 3 July, 1991 only incorporated. The bank had also on 18 October, 1991 written another letter requesting compliance by first respondent with all necessary legal documentation. The said offer was formally accepted on 13 November, 1991.

vii. (a) In consideration of the bank ‘ranting such banking fa-cilities as narrated above to the first respondent, the second and third respondents jointly and/or severally gave to the bank duly executed Guarantee documents in the amount of US$3,600,000 granted by the bank to first respondent as the borrower.

(b) Amongst other things, the second and third respon-dents guaranteed ‘payment to the bank on demand . . . all moneys and liabilities . . . incurred to the bank . . .’,


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and also that the within named guarantor(s) ‘shall be liable to repay the outstanding amount owed by the principal within 30 days after demand in writing . . .’ Furthermore, the guarantee ‘is to be applicable to the ultimate balance that may become due . . .’ it shall ‘continue to bind’ the guarantors.

(c) The outstanding balance as at 8 September, 1994 due from respondents to the bank stood at:–

(i) US$2,464,192,79 representing Lease Rental Re-ceivable.

(ii) US$2,035,637.52 representing Lease Rental not yet due.

(iii) N8,026.22 representing overdraft. (iv) US$865,775.47 representing Lease in progress. viii. The first respondent has failed, refused or neglected to

make any dollar repayment whatsoever in spite of repeated recovery/demand letters such as those dated 15 May, 1992, 31 May, 1992, 15 and 19 June, 1992, which were never re-sponded to and second and third respondent as obligated guarantors have similarly failed, refused/neglected to pay to the bank the dollar sums due as repayable from the said credit facility inspite of solicitors’ letter of May 17, 1996 to the Guarantors from S.E. Mosugu and Co, the solicitors to applicant demanding for such repayment.

ix. An Equipment sale and Lease-Back Agreement was also negotiated between the Bank and the first respondent, as per the bank’s letter to first respondent dated 17 February, 1994, 1 March, 1994, 28 April, 1984 as well as first respon-dent’s letter dated 21 February, 1994.

x. By a letter dated 2 July, 1991 the bank requested the first respondent to confirm, inter alia, that ‘all title documents in respect of the machinery shall be in the name of Alpha Merchant Ltd’, and the first respondent wrote a reply dated third July, 1991, to confirm the points raised in the bank’s said letter.

xi. The first respondent has no direct contract with NEXIM. The bank is the primary obligator in respect of the NEXIM loan the bank gave to first respondent. Several other corre-spondences were made relative to this matter as those dated 28 April, 1992, 20 August, 1992, 1 September, 1992, 4 No-vember, 1992, 26 November, 1992, 4 December, 1992, 18 December, 1992, 25 January, 1993, 31 December, 1993, 18 December, 1993, 11 January, 1994.


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xii. The applicant further states that the said loan of US$3,600,000 (principal) granted to the first respondent way back in 1991 was intended to assist the first respondent in the installation and operation of its Paper Mill Factory in Aba, Abia State and a consequential ability to export manu-factured paper products.

xiii. The applicant avers that the machinery and equipment site are all situate and lying in Aba, Abia State.

xiv. After taking benefit of the dollars credit facility, the first respondent has refused to repay back the outstanding bal-ance either instalmentally as and when it fell due or in lump sum or at all. The machinery and equipment though im-ported in the name of first respondent, were so imported with loan extended to first respondent by the bank hence the necessity for a sale and lease back arrangement.

xv. The bank’s (Alpha Merchant Bank’s) banking licence was revoked by the CBN on (8 September, 1994 and the appli-cant, the Nigeria Deposit Insurance Corporation (‘NDIC’) was appointed liquidator and the dollar amount outstanding and due for repayment by respondents to applicant stood at $5,365,605.78 as at 8 September, 1994.

xvi. That the said sum of US$ 5,365,605.78 has fallen due and recoverable as debt under the Failed Banks (Recovery of Debt) and Financial Malpractices Decree No. 18 of 1994 as amended.

xvii. That this outstanding debt of US$5,365,605.78 forms part of the factors that contributed to the failure of the bank.

xviii. The interest continue to accrue at the rate of 14.5% US Dollars per annum and as 31 May, 1996 the dollar balance due to the applicant stands at US$5,780,182.23. Applicant states she will rely upon, inter alia, first respondents’ ME-MART, Form CO7. NEXIM’s letters dated 2/8/91, 14th and 16 July, 1992, 28 April, 1992, 26 November, 1992, 21 December, 1992, 14 May, 1993, 3 December, 1993 and other relevant documents.

xix. WHEREOF applicant urges that this Honourable Tribunal to pronounce first, second and third respondents as liable to pay whether jointly and or severally – the said outstanding dollar balance to the applicant and with a further or other order for confiscation of respondent’s assets in satisfaction, in the alternative, in the event of refusal to pay.”

The appellants, the respondents to the application of NDIC in the Lower Tribunal, after entering an appearance to the


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application filed, first, a joint reply to the application and later, with the leave of the Lower Tribunal, a joint amended Reply to the application, wherein it is pleaded as follows:– 1. Save as is hereafter specifically admitted, the respondents

hereby deny all the material allegations in the applicant’s application as if the same had been denied seriatim.

2. The respondents admit paragraph 1(i), (ii), (iii), (iv) and (vi) of the applicant’s application, but deny paragraph (v) and will put the applicant to strict proof.

3. The respondents admit paragraph 2 of the applicant’s appli-cation only to the extent that the first respondent was granted credit facilities in sum of US$3,600,000 for the pro-ject of the first respondent located at Aba. The said money was procured under the NEXIM African Development Bank/ Export Stimulation Loan (“ADB/ESL”) Project to enable first respondent finance the procurement of capital equipment for its said paper milling project. Under this ar-rangement Alpha Merchant Bank Plc (hereinafter referred to as “the bank”) acted merely as vehicle or agent through which the said credit facilities were obtained from NEXIM.

4. The respondents admit paragraph 2a of the application. 5. The respondents admit paragraph 3 of the application. 6. The respondents admit the particulars of the second and

third respondents as given in paragraph 4 of the application but categorically deny any liability on the part of these re-spondents and will put the applicant to strict proof.

7. The respondents aver that the only security required under the agreement was that the lessor (applicant) would have legal ownership of the Leased Equipment.

8. The respondents further contend that the equipments pur-chased in name of the first respondent are the security for the credit facility granted. For this reason, the second and third respondents were never required to be guarantors of the credit facility. The Equipment Lease Agreement made no reference to any other agreement or provide for addi-tional security by way of guarantors.

9. The respondents aver that because of the nature of the Equipment Lease Agreement, the applicant felt adequately secure in releasing funds to the respondents. The transaction cannot therefore be qualified as an ordinary banking debt of the type envisaged by the Banks Financial Malpractices Decree, 1994.


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10. The respondents will at the hearing of this application raise as a preliminary objection the inclusion of the second and third respondents as parties in this application. The respon-dents will specifically aver that because of the nature of the agreement between the parties the second and third respon-dents did not guarantee the credit facility granted.

11. The respondents will on the premise raised above apply that the names of the second and third respondents be struck out of the application.

12. The respondents cannot admit or deny paragraphs 5(1)(a), 5(1)(b), 5(1)(c) and 5(1)(f) of the application as they are matters within the knowledge of the applicant. The respon-dents will however, put the applicant to strict proof.

13. The respondents admit paragraphs 5(1)(c) and 5(1)(d) of the application.

14. In further answer to paragraph 5(1)(c) and 5(1)(d) of the application the respondents aver:–

i. That the credit facilities granted the first respondent was in pursuance of the Federal Government Policy to pro-mote the exportation of non-oil products and to solve the raw material problems of industries in the country.

ii. That these objectives which still remain the Federal Government Policy will be defeated if the first re-spondent is not allowed to ever go into production.

iii. That the credit facilities granted the first respondent was done in accordance with the banking regulations and that there was no fraud or intention of same on the part of the respondents.

15. The respondents admit paragraph 5(ii) of the application and further state the bank was merely the conduit pipe through which the first respondent’s said application was channelled to NEXIM for the procurement of the said ADB/ESL facilities.

16. The respondents are not in a position to admit or deny para-graph 5(iv)(a) and (b) and will put the applicant to strict proof. The respondents however contend that the statement that the currency for the repayment of the loan “Shall be the British Pound or U.S. Dollars or any other currency accept-able to the CBN as per the loan Repayment Schedule” shows clearly that the loan was to be repaid from the earning from the exportation of the paper milling products which had not come to fruition by the time this action was begun.


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17. The respondents admit paragraph 5(v)(a) of the application to the extent that an Equipment Lease Agreement was en-tered into by the bank and the first respondent. The respon-dents will contend at the trial of this application that this agreement qualifies as a bill of sale in that it vests owner-ship of the equipment purchased by the first respondent in the bank whilst first respondent retains possession of the equipment as lessee.

18. In further answer to paragraph 5(v)(a) of the application, the respondents aver that the so-called “Equipment Lease Agree-ment” (said to have been made between the bank and the first respondent on the 9 July, 1992) has no connection whatsoever to the loan of $3,600,000 procured from NEXIM to enable the first respondent “procure machinery, equipments and spare parts for the setting up of the first respondent’s paper milling manufacturing edifice at Aba, Abia State” as stated in para-graph 5(ii) of the application. The respondents contend that the said “Equipment Lease Agreement” is in direct conflict with the policy of the Federal Government aimed at promoting ex-port trade in the country by limiting the term of the Lease “to five (5) years inclusive of eighteen (18) months moratorium period commencing on the 27 May, 1991”. During which pe-riod the process of installing the equipment and commission-ing same might not have even begun, let alone beginning the export of the finished products.

19. There being no nexus whatsoever between the said “Equipment Lease Agreement” and the NEXIM loan of $3,600,000 to the first respondent it becomes very clear that the applicant is merely trying in a clever way, to invoke the operations of the Failed Banks (Recovery of Debts) Finan-cial Malpractices in Banks Decree, 1994 to a situation it does not apply.

20. The respondents will contend at the hearing of this applica-tion that the terms of the so-called “Equipment Lease Agreement” are most oppressive to the first respondent and highly unconscionable. The clause in the said Agreement, to wit – “The Lessor (ie the bank) shall have the right to dispose of the leased equipment in whatever manner it deems fit at the end of the lease period” – is (having in mind that the lease period is only 5 years) nothing but a clog on the first respondent’s equity of redemption of the leased equipment.

21. The statement that “the title to the equipment leased shall remain the personal property of the lessor and shall


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continue in the ownership of the lessor” defeats completely the whole purport of the loan and renders the lease agree-ment most objectionable.

22. The said “Equipment Lease Agreement” is of no evidential value since it did not state the amount of the principal loan to the first respondent which is essential condition for the recovery by a banking organisation of any loan said to have been made by it with interest from anyone.

23. In paragraph 5(iv)(b) of the application, the applicant talked of the repayment of the loan by “any other currency acceptable to the CBN as per “the loan repayment sched-ule” yet, the so-called “Equipment Lease Agreement” did not reflect this loan repayment schedule.

24. In answer to paragraph 5(v)(b) and (c) the respondents say that going by the requirement “to pay rentals to the Lessor in fourteen (14) equal quarterly amounts of US$321,416.43” as from 25 November, 1992, the last of such quarterly payments would be due payable in July, 1997 which supports that this action is highly premature.

25. In further answers to paragraphs 5(v)(b) and (c) the respon-dents state that the respondents are not in a position to pay up Lease in process of rentals because the first respondent has not yet begun operation. Payment for these are to be made from earnings from exportation of the paper milling projects.

26. The respondents deny paragraph 5(xi) of the application and would put the applicant to strict proof.

27. The respondents deny paragraphs 5(vii)(a), (b) and (c) of the application and will put the applicant to strict proof.

28. The respondents deny paragraphs 5(vii), 5(ix), 5(x) and 5(xi) of the application and will put the applicant to strict proof.

29. The respondents admit paragraph 5(xii) of the application in that the said loan of US$3,600,000 (principal) granted to the first respondents was intended to assist the first respon-dent in the installation and operation of its Paper Mill at Aba, Abia State, and a consequential ability to export manufactured paper products which would in no way be helped by the “Equipment Lease Agreement”.

30. The respondents admit paragraph 5(xiii) of the application. The respondents further state that the first respondent duly presented its project to NEXIM which approved the loan after being satisfied that the project was viable. The


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respondent aver that the approval of the loan facility was not fraudulently, recklessly or negligently made.

31. The respondents deny paragraph 5(xiv) of the application and will put the applicant to strict proof. The respondents however say that the credit facilities received from NEXIM were utilised as agreed, and also admit that the machinery and equipment were all imported in the name of the first re-spondent and were so imported with the loan granted by NEXIM to the first respondent through the bank. The first respondent had entered into an agreement with Nippon Graphics of Hong Kong for the supply and installation of the machinery and equipment and thereafter to become the Technical Management Partners of the first respondent. But unfortunately, the applicant did not allow the project to take off before making this application. The respondents will rely on the said agreement dated 15 January, 1991, made between the first respondent and Nippon Graphics of Hong Kong and hereby plead the same.

32. The respondent state that first respondent had utilised about N200M (Two Hundred Million Naira) to put in place the factory buildings and infrastructure including road network at its site at Aba.

33. The respondents state that work was going on at the first respondent’s factory site at Aba until the tension generated in the country by the event of June 12, 1993 Presidential election and thereafter, when the representatives of Nippon Graphics of Hong Kong had to leave the country and return to Hong Kong.

34. The respondents state that presently, the first respondent has prevailed upon the representatives of Nippon Graphics of Hong Kong to return to Aba to complete the job of install-ing the equipments and commissioning same.

35. The respondents state that the equipments are still in the factory site of the first respondent and can still be put into use for the good of the first respondent in particular and the entire country.

36. The respondents say that one Mr Dhawan who is of the Nippon Graphics of Hong Kong is now at the site of the first respondent’s factory at Aba doing some of the installa-tions works while waiting the arrival of the rest of his team from Nippon Graphics, Hong Kong.

37. The respondents say that the first respondent’s factory is a viable venture which will be of great importance to the en-tire country and should be given the opportunity to take off.


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38. The respondent state that the first respondent has been in contact with NEXIM and further say that as far back as De-cember, 1994, officials from NEXIM had visited the site of the first respondent’s factory and raised the idea of repay-ment of the loan being rescheduled.

39. The respondents state that the idea of rescheduling the loan repayment was extensively discussed by NEXIM officials and the idea was very welcome to NEXIM officials.

40. The respondents state that they had always been confident that the NEXIM official who visited the factory and having seen the extent of the progress made on the site would ap-prove the rescheduling of the repayment of the loan.

41. The respondents are yet to get the final approval from NEXIM of rescheduling of the loan repayment.

42. The respondents say that the first respondent hopes to be able to begin repayment of the loan twelve (12) months from the time agreement is reached on rescheduling, when, judging from the rate of progress at the site at the moment, production and sales would have begun in earnest.

43. The respondents say that the first respondent is ready and willing to work in close consultation with NEXIM so as to pay back the loan as may be rescheduled by NEXIM, or if need be, to raise money from another bank or financial in-stitution so as to pay off the loan at a much earlier time.

44. The respondents at any rate say that if the matter should come to the worst, they would not stand in the way of the applicant going into the site in pursuance of the said obnox-ious clause of the said “Equipment Lease Agreement” by which the lessor shall have the right to dispose of the Leased Equipment whatever manner it deems fit at the end of the lease period, if the applicant is averse to the resched-uling of the loan by NEXIM, or allowing the first respon-dent in close consultation with NEXIM to raise money from another bank or financial institution so as to pay off the loan as quickly as possible.

45. The respondents deny paragraph 5(xv) of the application and will put the applicant to strict proof. The respondent deny most vehemently that the dollar amount outstanding for repayment by respondents stood at $5,365,605.78 as at 8 September, 1994.

46. The respondents deny paragraph 5(xvi) of the application and will put the applicant to strict proof.


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47. The respondents deny paragraph 5(xvii) of the application and will put the applicant to strict proof. The respondents vehemently deny being in any way responsible for the fail-ure of Alpha Merchant Bank Plc. The respondents say that the bank had been declared distressed and was a failure of long before the repayment of the loan was to have begun. The non-repayment of the loan from NEXIM could not have affected the fortunes of the bank in any way.

48. The respondents deny paragraph 5(xviii) of the application and will put the respondents to strict proof. The respondents vehemently deny that as at 31 May, 1994 the dollar balance due to the applicant was $5,780,182.23.

49. Whereof the respondents urge the Tribunal to:– i. Declare this suit premature as the first respondent had

not been given the chance to utilise the credit facilities granted to it.

ii. Declare that the respondents are not in any way re-sponsible for the failure of Alpha Merchant Bank Plc.

iii. Dismiss the application of the applicant in as much as the “Equipment Lease Agreement” on which the appli-cation is founded is inconsistent with the credit facili-ties to the tune of $3,600,000 granted by NEXIM to the first respondent.

iv. Declare that the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree, 1994 does not apply to such credit facilities granted by NEXIM to the first respondent through the Alpha Merchant Bank Plc.

Alternatively v. Order that the applicant should exercise its right under

the “Equipment Lease Agreement” to dispose of the leased equipment in whatever manner it deems fit.

It is on the above state of the pleadings of the parties that the case proceeded to trial before Nzeako, J at the Failed Banks Tribunal, Enugu Zone I on 9 October, 1997. On this day, one Adekunle David Oluwole, a chartered accountant, in the employ of the NDIC, the respondent, began to give evidence for the latter, the applicant in the Lower Tribunal. He con-cluded his evidence in the case on 16 March, 1999. He put in evidence documents relating to the claim of the applicant, NDIC, in the Lower Tribunal, against the respondents there (here the appellants) which witness said he came


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across in the records kept by the Bank while he was in-volved as an employee of the respondent NDIC in the re-covery of debt owed the Bank. The documents were put in evidence by consent of Counsel on both sides.

The evidence of APW1 Mr Oluwole in respect of these documents and their admissibility in evidence according to the printed record is a follows:– “(3) i. African Pulp and Paper Mills Application to Alpha

Merchant Bank for the said sum of $3.6 million dated 10 October, 1990 plus

ii. Proforma Application also of 10 October, 1990 (in 10 pages)

(4) NEXIM Allocation of funds in the sum of $3.6 million to Alpha Merchant Bank for African Pulp dated 29 April, 1991.

(5) Alpha’s letter to NEXIM stating priority African Dev. Bank/Export-Stimulation Loan (‘ESL’) disbursement listed dated 25 April, 1991.

(6) Alpha’s letter of offer to African Pulp and Papers Mills Ltd (containing African Pulps acceptance – letter dated 3 July, 1991).

(7) L/C and two telexes:– i. LC established on 15 July, 1991. ii. Telex of 2 October, 1991 for $3 million. iii. Telex of 13 December, 1991 for $600,000. (8) i. Equipment Lease Agreement dated 9 July, 1992. ii. Covering letter of 17 July, 1992. (9) Two Guarantees:– i. By Lord Chief Ifegwu; ii. By Dubic Industries Ltd (undated). (10) Two letters dealing with title to machinery in name of Al-

pha Merchant Bank:– i. From Alpha dated 2 July, 1991. ii. From African Pulp Ltd of 3 July, 1991. (11) A batch of eight promissory notes together with eight cor-

responding irrevocable standing order. i. Promissory Note 01/A/AP/CMD/91 ii. Promissory Note 02/A/AP/CMD/91 iii. Promissory Note 03/A/AP/CMD/91 iv. Promissory Note 04/A/AP/CMD/91


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v. Promissory Note 05/A/AP/CMD/91 vi. Promissory Note 06/A/AP/CMD/91 vii. Promissory Note 07/A/AP/CMD/91 viii. Promissory Note 08/A/AP/CMD/91 (12) Batch 3 letters from Alpha Merchant Bank to African

Pulp:– i. Headed ‘Approve ADB/ESL Facility’ – Re: project

implementation scheme – dated 18 June, 1992 ii. Headed ‘Approve ADB/ESL Facility’ – visitation of

project site – dated 9 July, 1992. iii. Head – ‘Re-visitation of project site dated 24 July,

1992’. (13) A letter from NDIC solicitors – S.E. Mosugu and Co letter

of demand to Chief Ifegwu dated 17 May, 1996. (14) Five letters – demand letters from Alpha Merchant Bank to

African Pulp and Papers Mills Ltd. i. Dated 31 May, 1992 ii. Dated 15 June, 1992 iii. Dated 26 November, 1992 iv. Dated 4 December, 1992 v. Dated 18 December, 1992 (15) History Statement of Account pertaining to African Pulp

and Paper Mills Ltd up to 30 August, 1994 and then to 30 September, 1997.

(16) i. Equipment Sale and Lease back Agreement (unexe-cuted) together with three letters pertaining to this equipment sale and lease back agreement.

ii. Letter of 17 February, 1994 iii. Letter of 21 February, 1994 iv. Letter of 1 March, 1994 (17) Two Letters:– i. From Alpha Merchant Bank Plc to African Pulp and

Paper Mills Ltd dated 18 December, 1993, ‘ADB/ESL facility debt rescheduling’.

ii. From Alpha Merchant Bank Plc to NEXIM dated 31 December, 1993, ‘Application for rescheduling facility in respect of African Pulp and Paper Mills Ltd’.

PW1: There is also a further document – telex message in respect of the Application of the Funds – dated 2 October, 1991.


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Tribunal: We will number that (18) – telex of 2 Oc-tober, 1991

Dr Mosugu: These are all the documents we sorted out and agreed to tender without objection, in evidence.

Mrs Onyekwuluje: These are the documents which we agreed

would be tendered and admitted without objection from me.

Tribunal: The documents listed under (1)–(18) are hereby admitted in evidence and marked as follows:–

(1) Documents listed under (1) as 1(i) and 1(ii) – exhibits APA.2 (i) and 2(ii) respectively.

(2) Documents under (2) – exhibits APA. 3. (3) Batch of two documents under (3) – exhib-

its APA.4(1) and APA.4(11) respectively. (4) Document under (4) – exhibits APA.5. (5) Document under 5 – APA.6. (6) Document under 6 – APA.7. (7) Documents in batch of 3 under (7) – exhib-

its APA. 8(i). 8(ii) and (iii) respectively. (8) Document in batch of 2 under (8) – exhib-

its APA. 9(i) and 9(ii) respectively. (9) Two Guarantees in a batch under (9) – ex-

hibits APA.10(i) and 10(ii). (10) Two Letters in a batch under (10) – exhib-

its APA.11(i) and 11(ii). (11) Batch of eight Promissory Notes with cor-

responding irrevocable standing orders un-der (11) – exhibits APA. 12(i), 12(ii), 12(iii), 12(iv), 12(v), 12(vii) and 12(viii) respectively.

(12) Batch of 3 Letters under (12) – exhibits APA. 13(i), 13(ii) and 13(iii).


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(13) Letter of S.E. Mosugu and Co Solicitors – under (13) – exhibits APA.14.

(14) Letters in batch of 5 under (14) – exhibits APA. 15(i), 15(ii), 15(iii), 15(iv) and 15(v) respectively.

(15) History Statement of Account under (15) – exhibits APA. 16.

(16) Batch of 4 documents under (16) – exhibits APA.17(i), 17(ii), 17(iii) and 17(iv) respec-tively.

(17) Batch of 2 Letters from Alpha Merchant Bank Plc – exhibits APA.18(i) and 18(ii).

(18) Telex Message dated 2 October, 1991 un-der (18) – exhibits APA.19

Expatiating on some of the documents put in by Counsel, APW1, Mr Oluwole testified as follows:–

“As to how such facility was granted the first respondent, African Pulp – it was USD $3.6 Million. This came about when it applied to the Bank – Alpha Merchant Bank for NEXIM loan on 10 October, 1990. Alpha then applied to NEXIM on 15 October, 1990 for the loan. NEXIM approved on 27 April, 1991. Then the funds were dis-bursed by NEXIM in 3 tranches of $3 million and $600,000 total-ling $3.6 Million. Before the disbursement, after approval by NEXIM, Alpha for-mally offered the first respondent the facility by a letter of offer dated 3 July, 1991. This offer was accepted by that respondent on 13 November, 1991. This is the document attesting to the offer and acceptance of the offer (witness identifies exhibit AP8.7) with acceptance at page 7. I see exhibit AP8.(3) admitted by consent. It is Alpha’s formal ap-plication to NEXIM dated 15 October, 1990. Also here is exhibit APA.4(1) which is first respondent’s formal application to Alpha Merchant Bank for $3.6 million. Exhibit AP8(5) – conveys NEXIM’s approval of the facility – dated 29 April, 1991, addressed to Alpha Merchant Bank. I see exhibit AP8(6) – letter of 25 April, 1991 from Alpha Mer-chant Bank Ltd to NEXIM detailing the priority disbursement list


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of the NEXIM loan allocated to the Bank customers of which Af-rican Pulp the first respondent is No. 2 on the list. I now say that NEXIM approval was on 29 April, 1991 (not 27 April, 1991) as I earlier stated before I saw exhibit AP5. As earlier stated there were two disbursements of $3 million and $600,000. This is the LC established for African Pulp – first respondent the sum of $3.6 million to Union Bank of Nigeria Plc London in fa-vour of Nippon Graphics. This exhibit AP8(1). Exhibit AP8(2) is the telex message by Alpha Bank to BTC Lon-don date 2 October, 1991. It instructs BTC London to transfer $3 million from Alpha’s Ac-count to Barclays Bank Plc New York. Exhibit APB(3) is a second telex from Alpha dated 13 December, 1991 to BTC London to debit Alpha’s Account in Barclays Bank London and transfer it to Barclay’s New York. There were altogether $3.6 million. The duration of the facility is 5 years from 27 May, 1991 to 25 February, 1996. I meant to say that the 5 years period would end on 25 May, 1996.”

The way the loan was structured was as follows:– (1) Interest was payable at 12½% every 6 months the first to be

paid on 26 November, 1991, the second 26 May, 1992, third – 25 November, 1992.

This is called lease in process. This means that period the first respondent would have put everything in place before the commencement of full rental payment. This is common with all leases.

(2) The agreement further stipulates that the company will pay $321,416.45 to NEXIM every three months.

The first payment was to commence 25 November, 1992. The fourteenth and last payment to be on 25 February, 1996. These were the agreed terms of payment as per the letter of offer (see page 8 of exhibit AP8(7). This structure affected Alpha in the following manner:– Alpha issues promissory notes and irrevocable standing orders to CBN to debit Alpha’s current Account to CBN should first re-spondent, African Pulp fail in its repayment obligation of the fa-cility.


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The first respondent did not fulfil its obligations, consequently CBN debited Alpha’s currency Account with CBN. The consequence was that Alpha’s current Account with CBN be-came overdrawn and it went into debit. This led to the eventual liquidation of the Bank on 8 September, 1994. The CBN resorted to the use of promissory notes and irrevocable standing orders already issued by the defunct Alpha Merchant bank with the CBN for the debt of African Pulp under the ADB/ESL Loan Agreement and Alpha being the main obligor for the loan. What this means is that under the subsidiary loan agreement, Al-pha is the only body known to NEXIM for all the funds collected from NEXIM under the export stimulation loan (“ESL”) scheme. In essence Alpha is the main obligor for all the facilities it ex-tended to its customers under the scheme. The various customers of Alpha were required to repay their debts through Alpha. They do not have direct account with NEXIM or CBN. Hence, the sub-sidiary Loan Agreement committed the defunct Alpha Merchant Bank to NEXIM. Hence the debiting of Alpha’s current account in CBN. Apart from exhibit APA.12(1) – 12(8), Alpha also put in place an equipment lease agreement which it entered into with African Pul-pand Paper Mills Ltd, in order to have a first claim on the assets procured with the NEXIM facility. This is in line with all borrow-ing by customers of Nigerian Banks to guard against default and also to mitigate the loses that could, result from such borrowing. This is the Equipment Lease Agreement – exhibit APA.9(1) dated 9 July, 1992 between Alpha Merchant Bank and African Pulp and Paper Mills Ltd. On paper 1 of this exhibit is shown that the term of the lease to be for 5 years with moratorium of 18 months commencing on 27 May, 1991. Rentals – to be paid in 14 Quarterly instalments of $321,416.45, the first to be paid on 25 November, 1992 interest applicable is 2% over the CBN rate of 10% for USD denominated loans. Any part not paid of the rentals on due date renders the whole lease agreement repudiated. Finally security for the L-S

1. Lessor to have legal ownership of the equipment. 2. right to dispose of item, Lessee is given the benefit of pur-

chasing at a cost of not less than 12½% of the original costs.


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The moratorium is the period of the customer to put his house in order.

Only united interest is charged – during moratorium called “Lease-in-process period”.

After that period full quarterly rentals are paid. The connection between the equipment loan agreement exhibit APA.9(1) and the loan of $3.6 million is that it is taken to procure the equipment is basically a lending to African Pulp. Alpha enters a lease agreement to safeguard its interest in the equipment pur-chased with the loan. This is customary in banking industry to have a fall back position in case of default by the borrowing cus-tomer. I had said I knew the guarantor of the loan. They are Lord Chief Ifegwu and Dubic industries. Their guarantee is evidenced by separate document deeds of guarantee by each party. These are the deeds – (already submitted by consent). Exhibit APA. 10(1) – is the guarantee of Lord Chief Ifegwu. Exhibit APA. 10(2) – is that of Dubic industries Ltd. These were duly signed by Chief Ifegwu for himself and them and Secretary to the Board for Dubic industries Ltd. The security given for the $3.6 million loan:–

(1) The equipment L-S agreement. (2) Machinery registered in the name of Alpha Merchant Bank. (3) Title documents of the equipment also registered in the

name of Alpha. Alpha, by several letters demanded repayment of the facility from African Pulp. On the part of the Liquidator of Alpha Merchant Bank – NDIC through its Counsel also wrote demand letter to African Pulp on 17 May, 1996. The respondents, to the best of my knowledge did not pay any part of the loan since 27 May, 1991, the inception of the lease. Exhibit APA.7 (admitted by consent) is the letter of offer and ac-ceptance and shows the expired on 26 May, 1996. The current status of the indebtedness is as follows – As at 30 September, 1997 – $6,715,995.03, broken down as fol-lows:– Lease in process interest – $674,504.85. Lease rentals not paid $4,499,830.31 interest on unpaid lease rent-als – $1,541,658.88. These sums have fallen due for repayment by African Pulp.


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Apart from 26 May, 1996, there has not been any re-scheduling of the loan. What NDIC, the Liquidator of Alpha and applicant want from this Tribunal.

1. (a) Full payment of the L-S in process interest. (b) Unpaid L-S rentals. (c) Interest on the unpaid L-S rentals. All amount to $6,715,994.03 as at 30 September, 1997. 2. Also that Alpha in Liquidation through the NDIC be

granted power to exercise its right of possession of the L-S agreement in addition to the full payment of all amounts due.”

“Tribunal: It is ordered that this uncertified photocopy of what has been exhibit APA.16 shall be replaced with the certified copy now produced by Dr Mosugu. The said certified copy shall also be marked – exhibit APA. 16. I see exhibit APA.16, APA.7 and APA.9(1). APA.7 is letter of of-fer and acceptance. APA.9(1) is the Equipment Lease Agreement between Alpha Merchant Bank and African Pulp – first respon-dent. I see exhibit APA.16 page 3, the Account is Account No. 001/05/09/A00198/02 otherwise called the lease interest receiv-able account. The interest I mention is in accordance with the pro-visions in exhibit APA.7 and APA.9(1). The last posting on page 3 is the balance as at 8 September, 1994 the commencement of Al-pha’s liquidation process – $674,564.84 debit. At page 4, the liquidator has taken control of the Bank in the mid-dle column the figure of N2,571,331.61, etc are quarterly unpaid rentals, the rental period started at the end of the moratorium pe-riod – 25 November, 1992. The extreme right hand column repre-sent the interest payable on the lease comprising of lease-in-process interest and interest on unpaid rentals. Page 5 middle col-umn – $4,178,413.86 is the 13th unpaid rental which accumulated. $499,830.31 represents the 14th and final accumulated unpaid rentals on the lease. This is the same as that on page 2 of the ex-hibit. The right hand column – $1,180,243.23 is interest on the lease as at 31 May, 1996. To this is added monthly interest on un-paid interest for each succeeding month. Page 6 is interest calcula-tion on the lease rentals till 30 September, 1997 – interest calcu-lated at the end of each month . . . Lease rentals not paid – $499,830.31 (total of pages 1 and 2). Interest on unpaid lease rental – $1,541,658.88 (addition of all interest computations on pages 4,5 and 6 of the exhibit, less the lease – process interest of


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$674,504.85. As at 30 September, 1997, the total indebtedness of African Pulp Ltd is $6,715,994.83. The position is that interest will continue to be paid on all out-standing unpaid rentals for as long as they are outstanding, at the agreed rate of 12½%. Thus the interest from 1 October, 1997–31 October -$47,641.65. November – $46,104.82 December – $47,641.65 January 1998 – $47,641.65 The Total – $189,030.00

The total outstanding as at January, 1998 =$6,905,024.00. I am familiar with the conversion rate of N to USD. In 1994–97 the rate was also N80 = 1USD. If reduced to Naira the amount owed by first respondent as at 31 January, 1998 is N552,401,920.

The witness was cross-examined by Counsel for the re-spondents in the Lower Tribunal. In cross-examination he said, inter alia, as follows:–

“Alpha Merchant Bank is the main obligator of the loan as evi-denced by the subsidiary loan agreement it entered into with CBN, in addition to the promissory notes and irrevocable standing or-ders it issued to CBN to debit its account in the event of default on the part of the customers. African Pulp got the loan under the ADB/ESL scheme. Under the scheme the forms are channelled to the manufacturers of the relevant equipment. The Loan or the ac-tual funds did not get into any of the 3 accounts of the first re-spondent but the money was channelled to purchase the paper pulp equipment from Nippon Graphics. Tribunal:– By who? APW: Channelled by NEXIM After the approval, first respondent wrote AMB Ltd asking for disbursement of the facility by letter of 3 July, 1991 – Exhibit APA.11(2).”

The evidence of APW1 was the only evidence in the case. Giving its judgment in the case on 19 June, 1998, the Lower Tribunal held that it had jurisdiction to entertain the respon-dent’s application for the recovery of debt against the appel-lants and that the applicant before it (now the respondent to this appeal) was entitled to judgment against the respondent in the Lower Tribunal/now the appellants in this appeal as


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claimed and which claim had been proved. It entered judg-ment in favour of the respondent against the appellants in the sum of $6,715,994.08 as principal plus interest due to the respondent from the appellants as at 30 September, 1997 to-gether with interest, thereon at the rate of 12½% per annum from 1 October, 1997 till payment. It also made the follow-ing orders in the judgment:–

“We accept the applicant’s evidence that after calculations of in-terest as at 30 September, 1997, the sum of $6,715,994.08 was due. The CBN directed rate of exchange of the Naira to USD shall apply to convert the debt to Naira. Judgment is therefore hereby entered for the applicant in the sum claimed which as at 30 September, 1997 came to the above sum, together with interest thereon at the rate of 12½% per annum from 1 October, 1997 till payment. The applicant is also entitled to all the rights of possession set out in the Equipment Lease, should the respondents fail to pay the debt and costs. As to the right of sale of property, the same shall be subject to the provisions of Decree No. 18 of 1994.”

The fourth prayer in the application of the respondent in the Lower Tribunal relating to legal costs and expenses was re-fused. However, the Lower Tribunal said in the judgment that Counsel will be heard on the issue of costs. There are no indications in the record of proceedings how the question of costs was solved.

It is against this judgment that the appellants have now ap-pealed to this Special Appeal Tribunal on 16 grounds of ap-peal – original and additional.

It is not necessary to state the grounds of appeal since briefs of arguments have been filed on both sides and the issues arising for determination from the grounds of appeal have been identified therein.

In the appellants’ brief of arguments the issues said to arise for determination in this appeal from their grounds of appeal are 12 and they are as follows:– “3.01: Whether the transaction between Alpha Merchant Bank

Plc and the first appellant was one contemplated by De-cree Number 18 of 1994, as amended, as one of recovery


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of debts owed to a failed bank on the date the bank is de-clared failed.

3.02: If the answer is yes, whether the Lower Tribunal was right to have determined only the amount of money it con-ceived as due to the bank on the date of failure of the bank without taking into account the rights of the first appellant under the agreement between the parties.

3.03: If the answer is no, whether the Lower Tribunal had juris-diction to have adjudicated in the matter at all.

3.04: It the answer to the foregoing is yes, whether the Lower Tribunal ought to have treated the agreement between the parties as frustrated by an unforeseen event and to have approached the issue of accrued debts owed by the first appellant and the respective rights of the parties from the point of view of general principles of frustration, particu-larly that damages and rights would lie where they fell on the date of frustration.

3.05: Whether the applicant/respondent was under the enabling Decree, the agreement of the two parties, or any applica-ble law entitled to be awarded interest, more so at 12½% per annum, with effect from 8 September, 1994 the date of failure of the bank till 30 September, 1997 and/or until the date of full payment.

3.06: Whether on the pleadings and evidence called before the Lower Tribunal the applicant/respondent proved its case and proved entitlement to the sums awarded to it as at 8 Septem-ber, 1994, which were in the nature of special damages.

3.07: Whether the evidence of APW1, the only witness, was capable and sufficient to prove the case of the appli-cant/respondent.

3.08: Whether there was any or satisfactory evidence that the Central Bank of Nigeria has debited the account of the bank with any, or all, the sums comprised in the credit fa-cility of $3.6 million and that the bank in turn debited the account of the first appellant – conditions precedent to ap-pellant’s liability.

3.09: Whether the judgment of the Lower Tribunal was not ar-rived at on a procedure studded with a Fundamental vice and irregularities of such a nature that they vitiated the proceedings and the judgment.

3.10: Whether the judgment of the Lower Tribunal was not a one sided judgment which did not consider adequately, or all, the case and rights of the appellants.


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3.11: Whether the Lower Tribunal was right to have left the fix-ing of the rate of exchange on the amount, if any, found due, to the Central Bank of Nigeria instead of making an appropriate order therefore, particularly in view of the 1998 budget speech of the Head of State which fixed the rate for exchange for the repayment of all NEXIM and NERFUND loans at N22 per U.S. Dollar.

3.12: Whether in view of the numerous defects in the quantum and standard of proof, the Lower Tribunal was right to have found subterfuge in the principle of the decision in Union Bank of Nigeria Plc. v Sax Nigeria Ltd (1994) 8 NWLR (Part 361) 150 at 163.”

In the respondent’s brief of arguments, it is said as to the is-sues arising for determination in this appeal as follows:– “2.1. appellant appears to have formulated a total of 12 issues

for determination, arising out of the 17 Grounds of Ap-peal. But respondent very respectfully submits that only one main issue can be distilled from the valid Grounds of Appeal, and it is as follows.

2.2. Whether there was a loan (backed by a valid loan agree-ment) from Alpha Merchant Bank Plc to first respondent, guaranteed by second and third respondents, which was not paid but is over-due for repayment – and how much?”

We propose to stick in the determination of this appeal to the issues identified by the appellants as arising for determina-tion in this appeal from their grounds of appeal. Evidently, the grounds of appeal filed by the appellants raise issues which go very far beyond the only issue said by the respon-dent in its brief of arguments to arise for determination in this appeal.

We shall take first the issues which raise the question of the jurisdiction of the Lower Tribunal to entertain the re-spondent’s application before it against the appellants. To our minds, these issues are Issues 3.01 and 3.03 which we have reproduced. It is if and only if these issues relating to the jurisdiction of the Lower Tribunal to try the case before it are resolved in favour of the respondent that the other is-sues will arise for determination.

As regards Issue 3.01 and 3.03 it is submitted in the appel-lants’ brief of arguments and by Counsel for the appellants


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in open Court that the credit facility of US$3.6 million was not a loan made to the first appellant for 5 years by the bank but a credit facility granted to it by NEXIM through the Bank, from which the latter did not show that the first appel-lant had drawn any amount of money which would then be-come a debt owed by the first appellant. It is therefore sub-mitted by Counsel for the appellants both in the appellants’ brief of arguments and in arguments in open Court that the facility could not be regarded as a “debt” arising in the ordi-nary course of banking business and which remained out-standing and unpaid within the meaning of that word in sec-tions 3(1)(a), 9 and 29 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994, hereinafter referred to as The Decree, to found the jurisdiction of the Lower Tribunal to entertain the respon-dent’s application before it.

It is further stated that the Bank is a mere conduit pipe of NEXIM as regards the facility giving rise to this case now on appeal. The implication of this submission is in our judgment that the Bank and hence the respondent have no locus standi to take a legal action in respect of the facility, which is not made an issue in this appeal. We must leave it at that.

It is further submitted by Counsel for the appellants in the latter’s brief of arguments that the facility, the subject mat-ter of the case, now on appeal, did not arise in the ordinary course of banking business, in that a bank is ordinarily “an institution usually incorporated whose business is to receive money or deposit cash cheques or drafts, document com-mercial papers, make loans and issue promissory notes pay-able to bearer known as bank notes”.

Counsel referred to the definition of Banking in the Black’s Law Dictionary and to the definition of “Banking Business” in section 61 of the Banks and Other Financial Institutions Decree No. 25 of 1991, BOFID for short, for the above submissions of his. For reasons hereinafter appearing, we do not consider it necessary to reproduce the definition of “Banking Business” in section 61 of BOFID.


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It is the submission of Counsel for the appellants that in the case now on appeal we are not dealing with an ordinary banking business but a business of equipment leasing by the Bank to the first appellant, a matter not within the purview of the Lower Tribunal.

The submissions of Counsel for the respondent as to the jurisdiction of the Lower Tribunal to entertain the respon-dent’s application before it are grounded on the following definitions of the words “application”, “debt” and “loan” in section 29 of the Decree:– “(a) ‘application’ means ‘an application made by a Receiver or

Liquidator of a failed bank for the recovery of the debt owed to the failed bank’. The ‘debt owed’ is not frozen as at to quantum as at the date of the bank’s failure, neither is it dichotomised into debts ‘before’ and ‘after the bank’s fail-ure’;

(b) ‘debt’ means ‘any loan, advance, credit, accommodation, guarantee or any other credit facility, together with the in-terest thereon which remain outstanding and unpaid against a customer of a bank in favour of the bank’

(and according to Counsel under this crucial definition, ‘debt’ need only to be outstanding against a customer and in favour of the bank)

(c) ‘loan’ includes ‘an advance’, a guarantee and any other credit facility.”

Let us start the consideration of the issue at hand by repro-ducing section 3(1) of the Decree which provides for the civil jurisdiction of the Lower Tribunal. It says “3(1) The Tribunal shall have power to:– (a) recover in accordance with the provisions of this De-

cree, the debts owed to a failed bank, arising in the or-dinary course of business and which remain out-standing at the date the bank is closed or declared a failed bank by the Central Bank of Nigeria.”

It is significant to note that the above provisions relating to the civil jurisdiction of the Lower Tribunal do not contain the expression “arising in the ordinary course of banking business” but the expression “arising in the ordinary course of business”. This is why we are of the view that the defini-tion of “Banking business” in section 61 of BOFID will not


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be applicable here since we are concerned in section 3(1)(a) of the Decree with “business” simpliciter and not “banking business”. It will be wrong in our judgment, to limit the definition of the word “business” in section 3(1)(a) of the Decree to its definition when it is coupled with the word “banking” because the Decree does not couple it with that word. We are of the view that on the applicable canon of construction we must give the word “business” its ordinary meaning which is “concerns”, or “affair”.

For the reason we have just given we are of the view that the definition of banking in Black’s Law Dictionary is not helpful to us. It is worthy of note too that the word “ordinary” in the expression “arising in the ordinary course of business” qualifies the word “course” and not the word “business”. So, in our judgment, it will not be correct to construe the expres-sion as referring to the ordinary business of a bank.

In the construction of section 3(1)(a) of the Decree we shall permit ourselves to be guided by the following passage from Paget’s Law of Banking (10ed) page 159 Chapter 10 Relationship of Banker and Customer:–

“The relationship of banker to customer is one of contract. It con-sists of a general contract, which is basic to all transactions to-gether with special contracts which arise only as they are brought into being in relation to specific transactions or banking services. The essential distinction is between obligations which come into existence upon the creation of the banker-customer relationship and obligations assumed by specific agreement.”

In our judgment, therefore, the word “business” in section 3(1)(a) of the Decree will cover not only obligations which come into existence upon the creation of the banker-customer relationships but also obligations which are subse-quently assumed by specific agreements.

In our judgment, therefore, any debt owed to a failed bank arising in the ordinary course of obligations assumed by a specific contract will fall within the jurisdiction of the Lower Tribunal under section 3(1)(a) of the Decree. Need-less to say that the same thing goes for any debt owed to a failed bank arising in the ordinary course of obligations


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which come into existence upon the creation of banker cus-tomer relationship.

It is the case of the respondent that its claims against the appellants are based upon specific contracts (1) between the Bank and the first appellant and (2) between the Bank and the second and third appellants. The specific contract be-tween the Bank and the first appellant is the Equipment Lease Agreement – exhibit APA 9 in this case and the spe-cific contracts between the Bank and the second and third appellants are the two documents of guarantee one executed by the second appellant – exhibit APA 10(1) and the other by the third appellant exhibit APA.10(A).

In our judgment, rentals due and unpaid on exhibit APA.9, Equipment Lease Agreement, qualify as debts within the meaning of that word in section 29 of the Decree. So, in our judgment, rentals due to the Bank and unpaid in exhibit APA.9 the Equipment Lease Agreement, are debts owed to the Bank, arising in the ordinary course of business. There is in addition, the evidence of APW1 that the debts remain out-standing as at the date the Bank was declared a failed bank by the Central Bank. Consequently, in our judgment, the Lower Tribunal had jurisdiction under section 3(1)(a) of the Decree to adjudicate on the application of the respondent before it against the appellants.

In our judgment therefore the Lower Tribunal was right for different reasons in holding that it had jurisdiction to enter-tain the application the subject matter of the case now before us on appeal.

The way is now clear for us to consider the other issues identified by the appellants as arising for determination in this appeal beginning with Issue 3.02.

We have set down the issue earlier on in this judgment. It goes without saying that the Lower Tribunal was duty bound to consider the rights of the Bank and those of the first appel-lant under the agreement between them – exhibit APA.9 – before arriving at what was due to the Bank from the first ap-pellant as unpaid rentals in respect of the Equipment Lease


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Agreement. All the arguments in the appellants’ brief of ar-guments in respect of the issue in question are directed to-wards showing that the Lower Tribunal on a true and proper interpretation of section 3(1)(a) of the Decree had no juris-diction to entertain the respondent’s application before it. But we have already resolved the issue against the appellants. Nowhere in the appellants’ brief of arguments was any right of the first appellant under exhibit APA.9, the Equipment Lease Agreement, between the Bank and the first appellant, alluded to, which the Lower Tribunal ought to have consid-ered but did not consider before arriving at the unpaid rentals due to the Bank under the agreement. We must perforce re-solve Issue 3.02 against the appellants.

We now go to Issue 3.04. All the arguments in the appel-lants’ brief of arguments on the point that the Lower Tribu-nal ought to have treated the Equipment Lease Agreement, exhibit APA.9 between the Bank and the first appellant as having been frustrated by an unforeseen event and did not do so, must, necessarily proceed on the footing of the facts pleaded, if any, in the appellants’ reply to the respondent’s application. Significantly the appellants on the facts pleaded by them in their reply to the respondent’s application urged the Lower Tribunal in paragraph 49 to:– “(i) Declare this suit premature as first respondent (the first ap-

pellant) had not been given the chance to utilise the credit facilities granted;

(ii) Dismiss the application of the applicant in as much as the Equipment Lease Agreement on which the application is founded is inconsistent with the credit facilities to the tune of $3,600,000 granted by NEXIM to the first respondent (first appellant);

(v) Declare that the Failed Bank (Recovery of Debts) and Fi-nancial Malpractices in Banks Decree No. 18 of 1994 does not apply to such credit facilities granted by NEXIM to the first respondent (first appellant) through the Alpha Mer-chant Bank Plc.”

Equally significant to note are the following paragraphs of the reply of the appellants:– “Paragraph 35: The respondents (appellants) state that the

equipments are still in the factory site of the


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first respondent (first appellant) and can still be put into use for the good of the first respondent (first appellant) in particular and the entire country.

Paragraph 42: The respondents (appellants) say that the first respondent(first appellant) hopes to be able to begin repayment of the loan twelve (12) months from the time agreement is reached on rescheduling, when, judging from the rate of progress at the site at the moment, production and sales would have begun in earnest.”

It is clear from the above that the appellants did not put up a defence of the frustration of the Equipment Lease Agree-ment exhibit APA.9 between them and the Bank by any event. In the event that issue was not before the Lower Tri-bunal. So, it could not have lawfully and legally treated the contract as having been frustrated. It did not rightly in our judgment do that. So, Issue 3.04. must be resolved against the appellants.

As to Issue 3.05, which we have copied above, it is recog-nised in the appellants’ brief of arguments that under Order 45 Rule 7 of the Federal High Court (Civil Procedure) Rules which are applicable to the proceedings now before us on appeal, interest can be awarded on judgment debts from the date of judgment until the date of full payment. The interest permissible under the Federal High Court (Civil Procedures) Rules is a maximum of 5% annum.

Interest is payable either by contract or by statute. Exhibit APA.9(1) the Equipment lease Agreement provides as re-gards rentals thus:– “Rentals:– to be paid in 14 quarterly instalments of

$321,416.45, the first to be paid on 25/11/92 interest applicable is 2% over CBN rate of 10% for USD denominated loan.”

So, it is clear that the payment of interest is provided for in the contract between the first appellant and the Bank.

The fact that the bank has been declared a failed bank does not put an end to the agreement, exhibit APA.9 which will continue to run its course. So, in our judgment the Lower


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Tribunal was in order to enter judgment for the respondent for the amount due to the respondent-principal debt and in-terest – as at 30 September, 1997 after the Bank has been declared a failed bank.

On Issue 3.05, we hold that the proper rate of interest which the Lower Tribunal ought to have awarded on the judgment debt till the date of payment is 5% per annum. We hereby set aside the interest of 12½% per annum awarded by the Lower Tribunal and substitute therefore interest at rate of 5% per annum.

We shall take Issues 3.06 and 3.07 together which in es-sence raise the question whether on the pleadings and the evidence of the only witness in this case the respondent has proved its case against the appellants.

We said earlier on in this judgment that the case of the re-spondent to this appeal is based on (i) the Equipment Lease Agreement between the Bank and the first appellant and (2) the Documents of Guarantee between the Bank and the sec-ond and third appellants in respect of the Equipment Lease Agreement. The Equipment Lease Agreement and the Documents of Guarantee were pleaded by the respondent and both sets of documents were admitted by the appellants in their pleadings. The Equipment Lease Agreement and the documents of guarantee were duly put in evidence. It is common ground that the first appellant was in possession of the equipment, the subject matter of the Equipment Lease Agreement. It is also common ground that the rentals due under the Equipment Lease Agreement were unpaid. We have shown above that payment of interest on the rentals under the Equipment Lease Agreement was provided for in the agreement in question. We have held earlier on in this judgment that the issue of frustration of the agreement does not arise on the pleadings in this case.

In view of the above we must perforce hold that the re-spondent on the pleadings and the evidence, proved its claim for rentals due and unpaid under the Equipment Lease Agreement and interest amounting to $6,715,994.38 as at 30 September, 1997.


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As to Issue 3.08, whether there was any satisfactory evi-dence that the Central Bank of Nigeria had debited the ac-count of the Bank with it with any or all sums comprised in the credit facilities in question in this appeal and that the Bank in turn debited the account of the first appellant with the same, the evidence from the respondent as per APW1 is as follows, for ease of reference:–

“The CBN resorted to the use of promissory notes and irrevocable standing orders already issued by the defunct Alpha Merchant Bank for the purpose of debiting the Account of Alpha Merchant Bank with the CBN for the debt of African Pulp under ADB-ESL Loan Agreement and Alpha being the main obligor of the loan. What this means is that under the subsidiary loan agreement, Al-pha is the only body known to NEXIM for all the funds collected from the NEXIM under the export stimulation loan (‘ESL’) scheme. In essence, Alpha is the main obligor for all the facilities it extended to its customers under the scheme. The various cus-tomers of Alpha were required to repay their debts through Alpha. They do not have direct Account with NEXIM or CBN. Hence, the subsidiary loan Agreement committed the defunct Alpha Merchant Bank to NEXIM. Hence the debiting of Alpha’s current account in CBN. This is the subsidiary loan agreement exhibits APA.2 – which I mentioned (also in by consent of Counsel) dated 28 November, 1989 between CBN and Alpha Merchant Bank Ltd – page 5 para-graph 8.01 and 9.01 relate to the promissory notes and Standing Orders earlier mentioned.”

The evidence is documentary that is to say, it is the various promissory notes and irrevocable Standing Orders in evi-dence in this case. This type of documentary evidence is unlike oral evidence which if given and uncontroverted, the trial Court or the Tribunal must accept it. In other words the principle of law enunciated in such cases as Odulaja v Haddad 1973 11 SC 35; Nigerian Maritime Services Ltd v Afolabi 1978 2 SC. 79 at 81–82 and Boshali v Allied Com-mercial Exporters Ltd 1961 All NLR 917 will not apply here. It is for the Lower Tribunal to construe and interpret the various documents and then decide whether they support the case of the respondent that the account of the Bank with the Central Bank of Nigeria was debited with the sum of money outstanding from the first appellant in respect of the


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said $3,600,000 credit facility in respect of which the Bank in turn executed the said promissory notes and irrevocable standing orders in favour of the Central Bank of Nigeria.

The Lower Tribunal did not do this but accepted the un-contradicted oral evidence of APW1 in that regard relying on the above cases. We have said above that they are not applicable to documentary evidence. And what is more, APW1 was not giving evidence in respect of matters within his knowledge. He was giving evidence in respect of matters of records and interpreting the same.

In respect of the documentary evidence, the Lower Tribunal and this Special Appeal Tribunal are in the same position to interpret the documentary evidence. Although the Lower Tri-bunal did not construe the promissory notes and the Standing Orders to determine whether by virtue of them the CBN had debited the account of the Bank with it with the sums out-standing in respect of the credit facilities in question without reference to the evidence of APW1 on that point before it we can properly do so and shall now proceed to do so.

The promissory notes were made subject to the following conditions subsequent, namely if the first appellant fail in its obligation to repay the loan and interest under the ADB/ESL, scheme managed by the CBN through NEXIM, in that event the promissory notes shall mature, that is due for payment. The irrevocable Standing Orders signify that once the notes mature the account of the Bank with the CBN are to be deb-ited with the amount due under the promissory notes and the irrevocable Standing Orders cannot be countermanded by the Bank before the maturity of the promissory notes.

It is common ground that the first appellant had defaulted in the payment of the loan and interest thereon under the ADB/ESL Scheme managed by the CBN through NEXIM. So, in our judgment the promissory notes in question have matured. So, by virtue of the irrevocable Standing Orders in question, the CBN in the ordinary course of business, has debited or must have debited the account of the Bank with the amount to which the promissory notes relate.


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In our judgment, therefore, there is satisfactory evidence in this case that the CBN had debited the account of the Bank with it with the amount comprised in the credit facilities in question.

It is submitted in the appellants’ brief of arguments that the above is a condition precedent to the liability of the appel-lants to the Bank. The decision we have just given shows that the condition precedent, according even to the appel-lants, duly materialised in this case. We resolve issue 3.08 against the appellants.

We take Issue 3.09 as to whether the judgment and the proceedings in this case were vitiated by irregularities.

The irregularities complained of are, according to Counsel, as follows in the appellants’ brief of arguments:–

“On 24 February, 1998, in the course of APW1 giving evidence during the hearing, the Chairman of the Lower Tribunal butted in and reminded the only witness called that his oral evidence did not tally with the figures at pages 1 to 6 of the vital exhibit tendered, that is exhibit 16, the history summary of financial dealings be-tween the parties. Learned Counsel for the applicant took the hint and applied for, and was granted, an adjournment to help him to . . . endeavour make a copy of the document and acquaint myself with the contents of exhibit APA.16 to obviate the difficulty of witness in explaining the figures.”

Because of the above, it is submitted in the appellants’ brief of arguments that the Learned Chairman of the Lower Tri-bunal took sides with the applicant in the case, the respon-dent to this appeal, and was not an impartial umpire, a cir-cumstance, it is further submitted, which renders the whole of the proceedings a nullity, in that it violated the constitu-tional right of the appellants to a fair hearing, guaranteed by section 33 of the 1979 Constitution.

The complaints levelled against the conduct of the learned Chairman of the Lower Tribunal completely, in our judg-ment, misunderstand the role of a judge when trying a case before him or her. In the trial of a case a judge is not sup-posed to act as a robot. It is definitely permissible for a Judge to ask a witness a question or two on any piece of


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evidence which is not clear to him or her. What a judge should not do is to descend into the arena and give the im-pression that he or she has taken over the conduct of the case of one of the parties. This happens not when a Judge asks one or two questions to clear an ambiguity in the evi-dence, as in this case, but when he asks a series of questions giving the impression that he or she is conducting the case of a party for him or her.

In our judgment, what the learned trial Judge did was per-fectly in order. It cannot in our judgment be said by any stretch of the imagination that the Learned Trial Judge by commenting in open court on the ambiguity in the oral evi-dence of APW1 and the documentary evidence exhibit 16 that she had descended into the arena or sided with the re-spondent to this appeal. We find no substance in this com-plaint. We resolve Issue 3.09 against the appellants. We have even said earlier in this judgment while considering Issue 3.08 that the oral evidence of APW1 is not of much assistance in this appeal.

Our judgment on Issues 3.02 and 3.04 has taken care of Issue 3.10. The reply of the appellants to the respondent’s applica-tion is prolific, but the appellants led no evidence at all in the Lower Tribunal. So their case in the Lower Tribunal must nec-essarily stand or fall by the documentary evidence adduced by the respondent, the applicant in the Lower Tribunal. This is the view which, correctly in our judgment, the Lower Tribunal took of the case of the appellants. In doing this the Lower Tri-bunal did not give a one sided judgment but adequately, in our judgment, considered the case and the rights of all the parties before it on the available evidence before it.

In our judgment, therefore, Issue 3.10 as to whether the Lower Tribunal gave a one sided judgment which did not consider adequately or at all the case or the rights of the ap-pellants must be resolved against the appellants.

As for Issue 3.11, we find nothing wrong in the order of the Lower Tribunal that the CBN directed rate of Exchange of the Naira to USD shall apply to convert the debt to Naira.


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The Lower Tribunal did not leave it to the CBN to fix the rate of Exchange that would apply. The Lower Tribunal did, that is the CBN directed rate of Exchange as laid down by the CBN. So, Issue 3.11 is resolved against the appellants, in our judgment.

As to Issue 3.12, the Lower Tribunal correctly directed it-self as to the quantum and standard of proof in the case be-fore it now on appeal before us. So, in our judgment we find no defect, let alone numerous defects as alleged in the appel-lants’ brief of arguments, in the proceedings of the Lower Tribunal as regards the quantum and standard of proof in this case. So, in our judgment Issue 3.12 must be resolved against the appellants.

In the result the appeal of the appellants fails, except on the issue as to the rate of interest which the judgment of the Lower Tribunal will attract from the day of judgment until the time of payment which we have reduced from 12½% per annum to 5% per annum. The judgment of the Lower Tribu-nal is upheld by us except that the judgment debt of $6,715,994.08 will now attract interest at the rate of 5% per annum from the date of judgment until the time of payment. The respondent is entitled to the costs of this appeal against the appellants which we now proceed to assess.



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Alpha Allied Nigeria Limited and others v Nigeria Deposit Insurance Corporation

SPECIAL APPEAL TRIBUNAL, LAGOS AGBAJE, ODUNLAMI, JJ, BALONWU S.A.N. Date of Judgment: 20 APRIL, 1999 Suit No.: SAT/FBT/423/98

Action – Parties to an action – Joinder of – Guiding princi-ples

Failed Banks Tribunal – Recovery of debt against companies – Joinder of directors – Whether proper – Liability of Direc-tors therefore – Section 15(7) Failed Banks Decree No. 18 of 1994 (as amended) – Section 290 Companies and Allied Mat-ters Act Cap 59 Laws of the Federation of Nigeria, 1990

Practice and Procedure – Parties to an action – Joinder of – Principles guiding

Practice and Procedure – Service of process – Failure thereof on a party – Effect

Facts This is an appeal by the appellants in respect of a contract which was awarded to the first appellant by Borno State Government to supply 110 No. Water Pump Machines at the contract sum of N198,000. At the instance of the Borno State Government the respondent the Premier Commercial Bank Plc advanced the first appellant the N198,000 to en-able the first appellant execute the contract on the under-standing that after the contract was executed the first appel-lant would hand over all the original documents relating to the contract to the respondent which would use them for collection of the N198,000 from Borno State Government to off set the advance granted to the first appellant. The first appellant supplied the 110 Water Pump Machines to Borno State Ministry of Agriculture and Natural Resources which received the water pump machine and sold them to Fadama at higher price under the Borno State Fadama Irrigation Scheme.


Alpha Allied Nigeria Ltd and others v. Nigeria Deposit Insurance 441

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The Borno State Government instead of using the proceeds collected from the sale of Pump Machines to pay back to the respondent, the Borno Government lodged the money into the State Treasury and nothing was paid to the respondent.

The respondent later took action before the Kano Zone of the Failed Banks Tribunal for the refund of the N198,000. The appellants contended that they were not served with the Hearing Notice and other processes and despite the non-service of the processes the Tribunal heard the case on a Motion on Notice and gave judgment against the appellants jointly and severally in favour of the respondent in the sum of N1,106,863.88 with interest at 21% per annum from 1 October, 1996 and in respect of its Kaduna Branch account in the sum of N52,594.16 with interest at 21% and the costs of N30,000 was awarded. The appellants’ application to the Lower Tribunal to set aside the judgment was dismissed and as the appellants were dissatisfied with the judgment of the Lower Tribunal they lodged an appeal to this Special Appeal Tribunal.

Held –

1. A plaintiff has a legal duty to bring to Court all persons who may be affected by the decision in the case so that the matter in dispute could be resolved once and for all. In the case in hand the first appellant is a corporate body (legal entity) and 2nd to the 5th defendants are the Di-rectors of the Company who could be made answerable for the debt as in section 15(7) of the Failed Bank (Re-covery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended).

2. It is a fundamental principle of law that all parties who will be affected one way or the other in a litigation must be made parties. They are entitled to be heard and must be heard before judgment is given by the Court. This is because it is against all known principles of fair hearing for a party to be condemned in judgment in which he is not given opportunity to lead evidence either in support or in defence of his right.



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3. All parties who will be affected one way or the other in a litigation must be made parties as they are entitled to be heard and must be heard before judgment is given by the Court. Since the Borno State Ministry of Agriculture and Natural Resources is not a party to the litigation herein, it will be against all known rules for it to be or-dered to pay the respondents the sum awarded by the Lower Tribunal.

4. It has been established that failure to serve writ of sum-mons on the defendant is a condition fundamental to the exercise of jurisdiction.

In the case in hand, there is evidence to show that the defendants were properly served.

Appeal allowed in part.


Nigerian Adeigbe v Kusimo (1965) NMLR 284 Chiga v Umaru (1986) 3 NWLR (Part 29) 400 Onabanjo v Ewetuga (1993) 4 NWLR (Part 288) 445 Sken-Consult (Nigeria) Ltd v Ukey (1981) 1 SC

Nigerian statutes referred to in the judgment Companies and Allied Matters Act Cap 59 Laws of the Fed-eration, 1990, section 290 Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), sec-tions 11, 15(7)

Judgment ODUNLAMI J: This is an appeal by the appellant in respect of a contract which was awarded to the first appellant by Borno State Government to supply 110 No. Water Pump Machines at the contract sum of N198,000. At the instance of the Borno State Government, the respondent the Premier Commercial Bank Plc advanced the first appellant the


Odunlami J


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N198,000 to enable the first appellant execute the contract on the understanding that after the contract was executed the first appellant would hand over all the original documents relating to the contract to the respondent which would use them for collection of the N198,000 from Borno State Gov-ernment to off set the advance granted to the first appellant. The first appellant supplied the 110 Water Pump Machines to Borno State Ministry of Agriculture and Natural Re-sources which received the water pump machine and sold them to Fadama at higher price under the Borno State Fadama Irrigation Scheme.

The Borno State Government instead of using the proceeds collected from the sale of Pump Machines to pay back to the respondent, the Borno Government lodged the money into the State Treasury and nothing was paid to the respondent.

The respondent later took action before the Kano Zone of the Failed Banks Tribunal for the refund of the N198,000. The ap-pellants contended that they were not served with the Hearing Notice and other processes and despite the non-service of the processes the Tribunal heard the case on a Motion on Notice and gave judgment against the appellants jointly and severally in favour of the respondent in the sum of N1,106,863.88 with interest at 21% per annum from 1 October, 1996 and in respect of its Kaduna Branch account in the sum of N52,594.16 with interest at 21% and the costs of N30,000 was awarded. The appellants’ application to the Lower Tribunal to set aside the judgment was dismissed and as the appellants were dissatisfied with the judgment of the Lower Tribunal they lodged an ap-peal to this Special Appeal Tribunal.

The appellants’ Counsel filed appellants’ brief on 12 Janu-ary, 1999 in which he formulated four issues for determina-tion. Later on 22 January, 1999 with the leave of this Tribu-nal he filed amended brief in which six issues were formu-lated for determination.

The respondent’s brief was filed on the 26 January, 1999 but after receiving appellants’ amended brief of 22 January, 1999 Counsel for the respondent also filed supplementary respondent’s brief on 9 February, 1999.


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The first issue for determination is whether the service of the Hearing Notices on the appellants is fundamental and a precondition for the exercise of the Tribunal’s jurisdiction. The learned Counsel for the appellants contended that his clients were improperly served with processes in the case as they were expected to be served by substituted service.

It has been established that failure to serve writ of sum-mons on the defendant is a condition fundamental to the ex-ercise of jurisdiction. (See Adeigbe and another v Kusimo and another (1965) N.M.L.R. 284 and Sken-Consult (Nige-ria) Ltd v Ukey (1981) 1 SC. at 26.)

In the case in hand, there is evidence that the bailiff served the fourth appellant whilst the first, second, third, fourth and fifth were allegedly served by respondent’s Counsel when there was order for substituted service. There is however, the evidence that the processes were served personally on the other respondents.

The learned trial Judge was satisfied with the mode of ser-vice hence on page 2 of the record of proceedings he had this to say:–

“The respondents have since been served and there are affidavits of service in the file at pages 22, 24, 26 and 28.”

There is also an affidavit in support of motion dated 13 Au-gust, 1998 sworn to by second appellant Alhaji Umar Abba Gana which states in paragraph 4 thus:–

“That as soon as I was served with the writ of summons on this suit I briefed my retainer Ibrahim Yinusa and Co to file a defence on my behalf.”

Paragraph 17 of the same affidavit also states:– “17. That the said Ibrahim Yinusa and Coy also misled me into

thinking that they were representing me in the suit. In Mo-hammed v Mustapha (1993) 5 NWLR (Part 292) 222 at 225 holding no. 6 states that the Certificate of Service or the Af-fidavit of Service is generally enclosed in the case file of the suit concerned so that at the hearing of or mention of the case the Judge can be referring to it readily to see whether there is any such document indicating service or not.”


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In the instant case, the learned Judge at page 3 of certified copy of the record of proceeding in his judgment had this to say after going through the file of the case. From the affida-vits of service, the second respondent was served on 27 No-vember, 1997 while the first, third, fourth and fifth respon-dents were served on 28 November, 1997. Although each of the respondents was supposed to have entered appearance within 8 days after service non (sic) of them has entered ap-pearance up till now (15 December, 1998). In Mohammed v Mustapha above in holding no. 2 at page 232 paragraph A Mustapha, JCA stated thus:–

“A party to a dispute in any matter before the Court must be in-formed by serving on him the process for him if he so desires to appear in Court and answer the claim brought against him.”

The learned Trial Judge who ordered the services of the processes checked from the suit file and was satisfied from affidavits of service filed by the bailiff that the appellants had been served. We are satisfied on the admission of sec-ond respondent along with the finding of the Judge that the respondents were served with the processes of the Court and so there was no failure to notify the appellant of the date of the hearing of the suit and as such we are of the view that the Lower Tribunal had jurisdiction to try the case. It is also noteworthy that second appellant paid N200,000 after he was served and it was after the service that he briefed his Counsel and made available to his Counsel’s chamber all documents relating to the suit. He instructed Counsel to travel to Maiduguri and verify Premier Commercial Bank’s claim and that on his return from Maiduguri his Counsel ad-vised him that he should just forget about the matter, and settle the claim to avoid embarrassment before the Tribunal. He even made further payments and prayed for part of the interest to be waived.

The learned Counsel further contended that the Lower Tri-bunal relied on exhibits A and B attached to the affidavit in support of the judgment. We find nothing in the judgment of the Lower Tribunal to show that the learned trial Judge re-lied on exhibits A and B attached to the affidavit in support


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of his judgment neither is there anything on the record of proceeding to justify the assertion.

The third issue for consideration is whether it is right to make the fourth and fifth appellants jointly and severally liable as the appellants were not appointed into the Board of Directors of first appellant at the time that the overdraft was granted.

It is a fundamental principle of law that all parties who will be affected one way or the other in a litigation must be made parties. They are entitled to be heard and must be heard before judgment is given by the Court. This is be-cause it is against all known principles of fair hearing for a party to be condemned in judgment in which he is not given opportunity to lead evidence either in support or in defence of his right. (See Alhaji M. Onabanjo v M.S.O.A. Ewetuga (1993) 4 NWLR (Part 288) 445 at 458 paragraphs A and B.)

A plaintiff has a legal duty to bring to Court all persons who may be affected by the decision in the case so that the matter in dispute could be resolved once and for all. (See Chiga v Umaru (1986) 3 NWLR (Part 29) 400.)

In the case in hand the first appellant is a corporate body (legal entity) and second to the fifth defendants are the Di-rectors of the Company who could be made answerable for the debt as section 15(7) of the Failed Bank (Recovery of Debt) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) states:–

“If the money obtained from sale of properties under subsection (6) of section 15 is still not sufficient to off-set the outstanding loan and interest thereon, the Tribunal may, subject to section 290 of CAMA, 1990 levy execution on the personal properties of the Directors of the body corporate, partners of the partnership or in-dividuals of the association as the case may be which shall be sold and applied in satisfaction of the outstanding debt in accordance with the provision of this section.”

In view of the provision of this section we are of the view that the second – fifth respondents were properly joined in the action in case the assets of the first appellant is not suffi-cient to satisfy the judgment debt and costs.


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We agree with the learned Counsel for the appellants that the Tribunal has the duty of finding those Directors who are liable jointly and severally for the debt owed by the corpo-rate body to the Failed Bank. In this case although the Direc-tors were rightly joined in the action but there is no evidence to show that the third – fifth appellants were involved so as to justify their being found liable after the veil is lifted so as to make them personally liable by invoking section 290 of Companies and Allied Matters Act Cap 59. It has not been proved that the third – fifth appellants utilised any part of the loan for some other purpose for which it was not granted or that they acted fraudulently.

In so far as the second appellant is concerned he is the alter ego of first respondent and he admitted taking the money and admitted using it for the purpose that it was to be util-ised but that it has not been refunded and he has personally paid part of it. In our view, there is no evidence to hold the third to fifth appellants liable jointly and severally with the first and second appellants.

In considering argument advanced by Counsel for both par-ties, we are satisfied that the processes of Tribunal were all served on the respondents but that they declined to enter ap-pearance as found by the learned Judge of the Lower Tribunal.

In view of the evidence before the Lower Tribunal, the ap-plication for recovery of loan was brought in conformity with section 11 of Decree No. 18 of 1994.

We are also satisfied that the second to fifth appellants were properly joined in the suit.

It is the view of this Tribunal that there is no evidence that the third – fifth appellants did anything to justify making them liable jointly and severally with the first and second appellants for the payment of the loan so as to invoke the provision of section 290 of Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990.

It is on record of proceeding that the loan received was for a specific purpose and was utilised for the purpose ie the execu-tion of contract to supply pumping machines. There is no


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evidence of fraud against them even after lifting the veil so as to make them liable for repayment of the loan and so the creditor, (the respondent) cannot fall on them for the recovery of the overdraft. We therefore hold that the judgment should not have been entered against the third – fifth appellants. We are of the opinion that the Judge was in error in doing so.

In the relief sought, the learned Counsel for the appellants is seeking an order directing the Borno State Ministry of Ag-riculture and Natural Resources to pay the respondent the sum awarded by the Lower Tribunal. It has been pointed out in the case of Alhaji M. Onabanjo v M.S. Ewetuga above that all parties who will be affected one way or the other in a liti-gation must be made parties as they are entitled to be heard and must be heard before judgment is given by Court. The Borno State Ministry of Agriculture and Natural Resources is not party to this litigation and so it will be against all known principles of fair hearing for the Ministry to be ordered to pay the respondents the sum awarded by the Lower Tribunal. It will be equally an error for this Tribunal to order the re-opening of the suit and join the Borno State Ministry of Agri-culture and Natural Resources as a co-defendant.

The last relief asked for by appellants’ Counsel is an order on Borno State Government to reimburse the appellants of all legal expenses incurred in the course of defending the suit. This issue was not before the Lower Tribunal and it was not one of the issues taken before us. Moreover, the Borno State Government is not a party to the Litigation before us.

On the whole, the judgment of the Lower Tribunal against the third – fifth appellants is set aside and in its place, judg-ment is entered in favour of the respondent in this appeal jointly and severally against the first and second appellants only as follows:– (1) In respect of Maiduguri Branch Account in the sum of

N1,306,863.83 with interest thereon at 21% per annum from 1 October, 1996 until full liquidation of the debt; and

(2) In respect of the Kaduna Branch Account in the sum of N52,594.16 with interest thereon at the rate of 21% per annum commencing from 1 November, 1996 until full liquidation.


Francis Ejiogu and others v. Nigeria Deposit Insurance Corporation 449

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Francis Ejiogu and others v Nigeria Deposit Insurance Corporation

SPECIAL APPEAL TRIBUNAL, LAGOS AGBAJE, ODUNLAMI, JJ, BALONWU S.A.N. Date of Judgment: 20 APRIL, 1999 Suit No.: SAT/FBT/454/98

Failed Banks Tribunal – Notice of Appeal against judgment thereof – Where to file same – Section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) and section 18(1), (2) Recovery of Public Property (Special Military Tribunals) Act Cap 389 Laws of the Federation of Nigeria, 1990 Practice and Procedure – Stay of execution – Application of stay of execution pending appeal – Guiding principles Facts On 22 August, 1997 the Zone 2 of the Failed Banks Tribu-nal, Lagos entered judgment against the appel-lants/applicants for the sum of N21,139,612.24 (Twenty-One Million, One Hundred and Thirty-Nine Thousand, Six Hundred and Twelve Naira, Twenty Four Kobo).

On 28 August, 1997, the appellants filed a Notice of Ap-peal in the Registry of the Lower Tribunal, but headed it “in the Special Appeal Tribunal”. An application for stay of execution pending Appeal was also filed. In considering the said application, the learned Trial Chairman held that the Notice of Appeal exhibit AOX was invalid having being headed “in the Special Appeal Tribunal” but filed in the Lower Tribunal. He was of the view that a process meant for and headed “in the Special Appeal Tribunal” should not have been filed in the Lower Tribunal. He therefore, refused the application for stay.

The applicants made a similar application for stay of exe-cution to the Special Appeal Tribunal. They contended that the loan, subject matter of the judgment debt was used to fi-nance a contract from Imo State Government and that they have not received any payment on the contract. They con-tended also they did not have money and would have to sell



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all their properties and borrow more to satisfy the judgment debt.

Section 5(1) Failed Banks (Recovery of Debts) and Finan-cial Malpractices in Banks Decree No. 18 of 1994 (as amended) provides:–

“Section 5(1) A person convicted or against whom a judgment is given under this Decree may within 21 days of the conviction or judgment appeal to the Special Appeal Tribunal established under Recovery of Public Property (Special Military Tribunal) Decree 1984 as amended in accordance with the provisions of that De-cree.”

Section 18(1) and (2) Recovery of Public Property (Special Military Tribunals) Act Cap 389 Laws of the Federation, 1990 provides:– “18(1) Where a person convicted by any of the Tribunals de-

sires to appeal to the Special Appeal Tribunal he shall give notice of appeal to the Tribunal concerned within fourteen days from the date of conviction;

(2) Where a Notice of Appeal has been filed, the Tribunal concerned shall within seven days forward its record of proceedings and findings thereon to the Appeal Tribu-nal.”

Held –

1. Notice of Appeal against the judgment of the Failed Banks Tribunal must bear the heading of the Special Appeal Tribunal but must be addressed to and filed within the time prescribed in section 5(1) Failed Banks Decree No. 18 of 1994 (as amended) at the Lower Tri-bunal against whose judgment the Appeal is lodged for onward transmission to the Special Appeal Tribunal in accordance with section 18(1) and (2) of the Recovery of Public Property (Special Military Tribunals) Act.

In the instant case, since the appellants headed their No-tice of Appeal “in the Special Appeal Tribunal” and filed same in the Lower Tribunal within time, their No-tice of Appeal is valid and subsisting and the learned Trial Chairman erred in holding that it was not valid.



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2. In case of a judgment debt a stay of execution is usually granted on a good affidavit showing that if the judgment debt were paid immediately and the appeal eventually succeeds, the appellant would not be able to recover the money back from the respondent. However, a stay can also be granted when the appellant/applicant has shown special or exceptional circumstances warranting the granting of the orders being sought by the applicant.

In the instant case, there is unchallenged evidence, that the subject matter of the Judgment debt arose from a loan obtained from Progress Bank to finance a contract which was duly executed but the Imo State Government is yet to pay for same; and that the applicants have not derived any benefit from the contract and have no money to pay; the applicants are therefore entitled to a stay on the condition that they enter into a bond not to dispose of any of their assets pending appeal.



Nigerian Vaswani Co Ltd v Savalakh (1972) 12 SC 77

Nigerian statutes referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), section 5(1) Recovery of Public Property (Special Military Tribunals) Act Cap 389 Laws of the Federation of Nigeria, 1990, sec-tion 18(1) and (2)

Judgment AGBAJE J: This is an application by the appel-lants/applicants for the following reliefs:– “(1) An order granting unconditional stay of execution of the

judgment of the Failed Banks (Recovery of Debts) and Fi-nancial Malpractices in Banks Tribunal, Zone II, Lagos


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delivered on 22 August, 1997 pending the determination of the appeal filed by Notice of Appeal dated 28 August, 1997; and/or

(2) Extension of time within which the applicants may appeal against the said judgment and an order deeming the Notice of Appeal dated 8 March, 1999 (exhibit AO2 herein) and duly filed and served as properly filed.

(3) Such further orders as this Honourable Tribunal may deem fit to make in the circumstances.”

Relevant to the application are the following paragraphs of the affidavit sworn in support of the application by one Alexander Obasi a clerk in the Chambers of the applicants’ solicitors:–

“I, Alexander Obasi, Nigerian, Litigation Clerk of 3, Military Street Onikan, Lagos do hereby make oath and state as follows:–

1. I am a Litigation Clerk in the Chambers of the appel-lants/applicants’ solicitors and as such I am conversant with the facts of this case and have the authority of the appli-cants to depose to this affidavit.

2. I am informed by Julius Ejikonye, of Counsel, and I verily believe him as follows:–

(a) That on the 22 August, 1997 the Failed Banks (Recov-ery of Debts) and Financial Malpractices in Bank Tri-bunal, Zone II, Lagos gave judgment against the ap-plicants in the sum of N21,139,612.24 and gave the applicants 14 days to pay same.

(b) That being dissatisfied with the said judgment the ap-plicants promptly instructed him to lodge an appeal against the same.

(c) That he promptly prepared and filed a Notice of Ap-peal dated 28 August, 1997 on same date at the Regis-try of the Lower Tribunal.

(d) That simultaneously with the said Notice of Appeal he also filed an application for stay of execution of the said judgment pending the determination of the appeal.

(f) That in the mean time, that in an effort to expedite the hearing of the substantive appeal, he put pressure on the Registry of the Lower Tribunal to compile and forward the Record of Appeal to this Honourable Tribunal.

(g) That in the cause of his efforts he was told at the Reg-istry of the Lower Tribunal that the request for the Re-cords of Appeal had to be made by the Registry of this Tribunal before they are forwarded.


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(h) That in view of this rather curious information he shifted his efforts to the Registry of this Tribunal where he was asked to submit copies of the Notice of Appeal filed at the Lower Tribunal’s Registry. This he did and eventually succeeded in getting the appeal en-tered as No. SAT/FBT/454/98. A copy of the Notice of Appeal is now produced and marked exhibit AO1.

(j) That he was, therefore, surprised when the Lower Tri-bunal in its ruling on 5 March, 1999 refusing the appli-cation for stay of execution stated that there was no ex-istent Notice of Appeal, and that no notice of any ap-peal filed by the applicants was given to it.

(n) That both exhibit AO1 and the fresh Notice of Appeal contain substantial and arguable grounds of appeal and raise serious issues, including that of jurisdiction, for determination by this Honourable Tribunal.

(p) That it will also be in the interest of justice to grant un-conditional stay of execution of the said judgment con-sidering the special circumstances of this case and in particular the finding of the Lower Tribunal that the contract was duly executed but the Imo State Govern-ment is yet to pay for same; and the fact that the Imo State Government/Imo State Public Utilities Board had been irrevocably authorised by the fourth appellant to domicile payment of the contract sum with the bank.

(q) Further to the above, the appellants have sought the assistance of the respondent to get the Government to pay but to no avail.

3. I was informed by the first respondent when he came to our chambers to brief my employers and I verily as follows:–

(a) That in view of paragraph 2(p) and (q) above, the ap-pellants do not have at present the money to pay the judgment debt to the respondent unless they have to sell all their belongings and even borrow more.

(b) That doing the above will engender irreparable damage to the appellants which cannot be adequately compen-sated by a refund of the money (even if with interest) should the appellants succeed in this appeal.

(c) That none of the appellants has derived any benefit whatsoever from the subject contract rather they have been subjected to serious hardship as a result.”

At the hearing of the application, Counsel for the appellants withdrew the application for an extension of time within


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which to appeal against the judgment in question and so that application was struck out.

The ruling of the Lower Tribunal refusing the application of the applicants for a stay of execution of the judgment in ques-tion is an annexe to the further affidavit of the applicants in support of this application. It is marked exhibit AO3. To our minds the following passage from the ruling is significant.

“In spite of these lapses, learned Counsel for the appli-cant/respondent conceded that a conditional stay could be granted. Much as this Tribunal is willing to grant a conditional stay such a stay must be related to the happening of an event. As I pointed out, in this ruling, there is no pending Notice of Appeal either in this Tribunal or at the Special Appeal Tribunal. A stay should be contingent on the happening of an event. A stay could not be granted pending the occurrence of nothing.”

The lapses observed by the Lower Tribunal in the applica-tion of the appellants for a stay of execution are, according to the Lower Tribunal, the absence of a competent and valid Notice of Appeal by the applicants. According to the Lower Tribunal, exhibit AO1, a purported Notice of Appeal is headed “in the Special Appeal Tribunal” but filed in the Reg-istry of the Lower Tribunal. In the words of the Lower Tri-bunal, “definitely a process meant for the Special Appeal Tribunal should not have been accepted for payment at the Lagos Zone II of the Failed Banks Tribunal. The position is that there is no Notice of Appeal at the Special Appeal Tri-bunal and none at the Failed Banks Tribunal Lagos Zone II”.

In our judgment, the Lower Tribunal was in error in hold-ing that exhibit AO1 is not a competent and valid Notice of Appeal. In this regard, we refer to section 18(1) and (2) of the Recovery of Public Property (Special Military Tribu-nals) Act. It says:– “18(1) Where a person convicted by any of the Tribunals de-

sires to appeal to the Special Appeal Tribunal he shall give notice of appeal to the Tribunal concerned within fourteen days from the date of conviction;

(2) Where a Notice of Appeal has been filed, the Tribunal concerned shall within seven days forward its record of proceedings and findings thereon to the Appeal Tribu-nal.”


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A Notice of Appeal bears the heading of the Appellate Court to which the appeal is lodged. It is however, addressed to the Lower Tribunal against whose judgment the appeal is lodged for onward transmission to the Appellate Court. This is what the appellants have done in the instant case by head-ing exhibit AO1 “in the Special Appeal Tribunal” and filing the same in the Lower Tribunal. In our judgment, it is in or-der and accords with the Provisions of section 18 of the Re-covery of Public Property (Special Military Tribunals) Act.

In our judgment, exhibit AO1 is a subsisting, competent and valid Notice of Appeal duly filed within the period of 21 days prescribed for doing the same by section 5(1) of the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree. It is also provided in section 5(1) of the Decree that the appeal shall be in accordance with the provisions of the Recovery of Public Property (Special Mili-tary Tribunals) Act in that regard, which we have just con-sidered.

It is true that in the case of a judgment debt a stay of exe-cution is usually granted on a good affidavit showing that if the judgment debt were paid now and the appeal eventually succeeds the appellant would not be able to recover the money back from the respondent, which is not the case here. However, the case of Vaswani Co Ltd v Savalakh (1972) 12 SC. 77 has decided it that a stay of execution of a judgment can be granted when the appellant/applicant has shown spe-cial or exceptional circumstances warranting the granting of the orders being sought by him or her.

In the instant case, it is deposed in the affidavit in support of the application we are now considering, and these facts are not challenged in the respondent’s counter-affidavit, as follows:– “2(p) That it will also be in the interest of justice to grant uncon-

ditional stay of execution of the said judgment considering the special circumstances in this case and in particular the finding of the Lower Tribunal that the contract was duly executed but the Imo State Government is yet to pay


Agbaje J


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for same; and that the fact that the Imo State Govern-ment/Imo State Public Utilities Board had been irrevoca-bly authorised by the 4th appellant to domicile payment of the contract sum with the bank.

3(a) That in view of paragraph (2)(p) and (q) above, the appel-lants do not have at present the money to pay the judg-ment debt to the respondent unless they have to sell all their belongings and even borrow more.

3(b) That doing the above will engender irreparable damage to the appellants which cannot be adequately compensated by a refund of the money (even if with interest) should the appellants succeed in this appeal, since they will be unable to get back those belongings.

3(c) That none of the appellants has derived any benefit what-soever from the subject contract rather they have been subjected to serious hardship as a result.”

We are satisfied that the above facts placed before us by the appellants constitute special or exceptional circumstances warranting the granting of a stay of execution of the judg-ment debt. However, we are not minded to grant an uncon-ditional stay of execution but a conditional stay of execu-tion.

It is hereby ordered that a stay of execution of the judg-ment of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Zone II, Lagos dated 22 August, 1997 pending the determination of the appeal before us is granted subject to the following condition namely, the ap-plicants shall enter into a bond in the sum of the judgment debt that is N21,139,612.24 not to dispose of any of the as-sets of the company, the fourth applicant, or of any of the assets of the first–third applicants upon which the respon-dent can fall in satisfaction of the judgment debt.


Allied Bank of Nigeria Plc v. A.G. Mijinyawa and Co Nigeria Ltd 457

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Allied Bank of Nigeria Plc v A.G. Mijinyawa and Co Nigeria Ltd and another

FEDERAL HIGH COURT, KANO DIVISION SENLONG J Date of Judgment: 21 APRIL, 1999 Suit No.: FHC/K/CS83/97

Banking – Banker and customer relationship – Whether within jurisdiction of Federal High Court – Section 230(1)(d) of 1979 Constitution as amended by Decree No. 107 of 1993 Court – Federal High Court – Jurisdiction of – Whether covers bank and customer relationship – Section 230(1)(d) of 1979 Constitution as amended by Decree No. 107 of 1993 Jurisdiction – Federal High Court – Jurisdiction of over transactions between bank and customer relationship – Whether within jurisdiction of Federal High Court – Section 230(1)(d) of 1979 Constitution as amended by Decree No. 107 of 1993 Jurisdiction – Federal High Court – Jurisdiction of over transactions between bank and customer relationship – Whether the word “individual” in proviso of section 230(l)(d) of 1979 Constitution as amended by Decree No. 107 of 1993 applies to human being as opposed to Corporate body Facts In the course of proceedings when the case came up on 11 March, 1999 the Court suo motu after perusing the plain-tiff’s claim, raised the issue of jurisdiction of the Court and asked Learned Counsel to address it on the issue.

Addressing the Court on 20 April, 1999, learned Counsel for the plaintiff submitted that this Court had jurisdiction to entertain the claim herein by virtue of section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993. She argued that although the claim related to the loan granted by the plaintiff to the first defendant the proviso to section 230(1)(d) of the Constitution as amended by Decree



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No. 107 of 1993 relates to individuals, ie a single human be-ing as opposed to a Corporation, a firm or a group of people or a limited liability company. She argued that the word “his” in the proviso refers to an individual being and not a corporate body. She referred to definition of “individual” at page 773 of Black’s Law Dictionary (6ed). She also cited the case of NDIC v FMBN (1997) N.C.L.C. (Part 5) 118 at page 122 and urged me to assume jurisdiction over the case.

Learned Counsel for the plaintiff relied on the authority of NDIC v FMBN (supra), also reported in (1997) 2 NWLR (Part 490) 735 to argue that the proviso to section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993 does not oust the jurisdiction of the Federal High Court in matters of banker/customer relationship.

Section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993 provides as follows:– “230(1) Notwithstanding anything to the contrary contained in

this Constitution and in addition to such other jurisdic-tion as may be conferred upon it by an Act of the Na-tional Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion to any other Court in civil causes or matters arising from:–

(d) banking, banks, other financial institution includ-ing any action between one bank and other, and ac-tion by or against the Central Bank of Nigeria, arising from banking, foreign exchange, coinage, legal tenders, bills of exchange, letter of credit, promissory note and of their fiscal measures:–

Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the indi-vidual customer and the bank.”

Held – 1. The Federal High Court has exclusive jurisdiction over

the matters in section 230(1)(d) less the proviso, it has no jurisdiction over the matters excluded by the proviso which are vested in the State High Courts. The legisla-ture was more concerned with vesting jurisdiction in the Federal High Court in respect of matters affecting the



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revenue and other fiscal measures of the Federal Gov-ernment and not dispute between an individual customer and his bank. Therefore, the Federal High Court has no jurisdiction over disputes between a bank and its indi-vidual customer.

2. Any dispute arising from a banker/customer relationship is expressly excluded from the provisions of section 230(1) of the 1979 Constitution as amended by virtue of the proviso to the subsection 230(1)(d). The result of this is that the State High Court and not the Federal High Court has jurisdiction over the claim.

3. Per curiam “The Court held at page 756 of the Report as follows:–

‘The proviso in section 230(1)(d) of the 1979 Constitution as amended cannot be interpreted to have effect of cutting down the jurisdiction conferred on the Federal High Court under the section beyond what compliance with the proviso renders necessary. What the proviso renders necessary and results in upon the circumstances contemplated is four fold in its ramification namely:–

(a) that the State High Court shall have jurisdiction in the circumstances indicated in the proviso;

(b) that the Federal High Court shall not have exclusive jurisdiction, as given to it under the main section, when it comes to matters falling within circumstances of the proviso;

(c) that the fact that the Federal High Court’s exclusive jurisdiction in section 230(1)(d) shall not apply to mat-ters falling within the circumstances of the proviso does not entirely remove jurisdiction therein from the Federal High Court; and

(d) that both the Federal High Court and the State High Court have and can exercise concurrent jurisdiction in such circumstances.

My understanding of the ratio decidendi in the above case is that while the Federal High Court has exclusive jurisdic-tion over the matters in section 230(1)(d) less the proviso, it has no jurisdiction over the matters excluded by the proviso which are vested in the jurisdiction of the State High Courts. I think the Legislature was more concerned with vesting jurisdiction on the Federal High Court in respect of



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matters affecting the revenue and other fiscal measures of the Federal Government and not dispute between an indi-vidual customer and his bank. I do not therefore find any legal basis for the argument that this Court has jurisdiction over disputes between a bank and its individual customer. I think this position has been succinctly and clearly dealt with by our superior Courts of record.”

4. The proviso to section 230(1)(d) of the 1979 Constitu-tion as amended by Decree No. 107 of 1993 ousts the jurisdiction of the Federal High Court not only in re-spect of natural human persons but also in respect of ar-tificial persons (both of them being legal persons) with respect to disputes relating to banking business or trans-action between the legal persons (human or artificial) as customers and their bankers.

Jurisdiction declined.


Nigerian Bi Zee Bee Hotels Ltd v Allied Bank (Nigeria) Ltd (1996) 8 NWLR (Part 465) 176 NDIC v FMBN (1997) 2 NWLR (Part 490) 735 N.I.D.B. v Fembo (Nigeria) Ltd (1997) 2 NWLR (Part 489) 543

Nigerian statute referred to in the judgment Constitution (Suspension and Modification) Decree No. 107 of 1993, section 230(1)(d)

Counsel For the plaintiff: Mrs EA Olayemi holds brief for M Etu-daiye, Esq.

Judgment SENLONG J: When this case came up on 11 March, 1999 the Court suo motu after perusing the plaintiff’s claim, raised the issue of jurisdiction of the Court and asked learned Counsel to address it.


Senlong J


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Addressing the Court on 20 April, 1999, learned Counsel for the plaintiff submitted that this Court has jurisdiction to entertain the claim herein by virtue of section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993. She argued that although the claim relates to the loan granted by the plaintiff to the first defendant the proviso to section 230(1)(d) of the Constitution as amended by Decree No. 107 of 1993 relates to an individual, ie a single human being as opposed to a Corporation, a firm or a group of peo-ple or a limited liability company. She argued that the word “his” in the proviso refers to an individual being and not a corporate body. She referred to definition of “individual” at Page 773 of Black’s Law Dictionary (6ed). She also cited the case of NDIC v FMBN (1997) N.C.L.C. (Part 5) 118 at page 122 and urged me to assume jurisdiction over the case.

It is not in dispute that the plaintiff’s claim is for the re-payment of a loan granted to the first defendant and guaran-teed by the second defendant plus interest therein. This rela-tionship is therefore between a bank and its customer for the avoidance of doubt. Section 230(1)(d) of the 1979 Constitu-tion as amended by Decree No. 107 of 1993 provides as fol-lows:– “230(1) Notwithstanding anything to the contrary contained in

this Constitution and in addition to such other jurisdic-tion as may be conferred upon it by an Act of the Na-tional Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion to any other Court in civil causes or matters arising from:–

(d) banking, banks, other financial institution including any action between one bank and other, and action by or against the Central Bank of Nigeria, arising from banking, foreign exchange, coinage, legal tenders, bills of exchange, letter of credit, promis-sory note and of their fiscal measures:–

Provided that this paragraph shall not apply to any dis-pute between an individual customer and his bank in re-spect of transactions between the individual customer and the bank.”

Learned Counsel for the plaintiff relied on the authority of NDIC v FMBN (supra) also reported in (1997) 2 NWLR


Senlong J


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(Part 490) 735 to argue that the proviso to section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993 does not oust the jurisdiction of the Federal High Court in matters of banker/customer relationship. I am afraid I do not find any such conclusions in the judgment. In that case, although the matter was between a banker and another, the subject matter was purely one of a loan placed for interest and did not relate to any fiscal measures and the Court held that in the circumstance the State High Court has jurisdiction to hear the matter. The four fold circumstances listed by the Court in that judgment makes the matter clearer. The Court held at page 756 of the Report as follows:–

“The proviso in section 230(1)(d) of the 1979 Constitution as amended cannot be interpreted to have effect of cutting down the jurisdiction conferred on the Federal High Court under the section beyond what compliance with the proviso renders necessary. What the proviso renders necessary and results in upon the cir-cumstances contemplated is four fold in its ramification namely:–

(a) that the State High Court shall have jurisdiction in the cir-cumstances indicated in the proviso;

(b) that the Federal High Court shall not have exclusive jurisdic-tion, as given to it under the main section, when it comes to matters falling within circumstances of the proviso;

(c) that the fact that the Federal High Court’s exclusive juris-diction in section 230(1)(d) shall not apply to matters fal-ling within the circumstances of the proviso does not en-tirely remove jurisdiction therein from the Federal High Court; and

(d) that both the Federal High Court and the State High Court have and can exercise concurrent jurisdiction in such cir-cumstances.”

My understanding of the ratio decidendi in the above case is that while the Federal High Court has exclusive jurisdiction over the matters in section 230(1)(d) less the proviso, it has no jurisdiction over the matters excluded by the proviso which are vested in the jurisdiction of the State High Courts. I think the Legislature was more concerned with vesting ju-risdiction on the Federal High Court in respect of matters affecting the revenue and other fiscal measures of the Fed-eral Government and not dispute between an individual


Senlong J


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customer and his bank. I do not therefore find any legal ba-sis for the argument that this Court has jurisdiction over dis-putes between a bank and its individual customer. I think this position has been succinctly and clearly dealt with by our superior Courts of record.

In NIDB v Fembo (Nigeria) Ltd (1997) 2 NWLR (Part 489) 543 at page 546 the Court of Appeal held that any dis-pute arising from a banker/customer relationship is expressly excluded from the provisions of section 230(1) of the 1979 Constitution (as amended) by virtue of the proviso to the subsection 230(1)(d). The result of this is that the State High Court and not the Federal High Court, has jurisdiction over the claim.

Learned Counsel for the plaintiff argued that the proviso to section 230(1)(d) applies to individual human persons and not to a limited liability company as in this case. This argu-ment is in my view cosmetic and lacks learning. It is trite that a registered company as a limited liability company is an individual legal entity or person and certainly falls within the definition of an individual not only under the proviso to section 230(1)(d) of the 1979 Constitution as amended, but also as envisaged in Black’s Law Dictionary which defines an “individual” as a single person. An incorporated company is surely a single person. The Court of Appeal had the op-portunity of listening to a very similar argument as advanced by Learned Counsel for the plaintiff in the case of Bizee Bee Hotels Ltd v Allied Bank (Nigeria) Ltd (1996) 8 NWLR (Part 465) 176, and held as follows (see page 185 of the Re-port):–

“The proviso to section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993 ousts the jurisdiction of the Federal High Court not only in respect of natural human persons but also in respect of artificial person (both of them being legal persons) with respect to disputes relating to banking business or transaction between the legal person (human or artificial) as cus-tomers and their bankers.”

In the light of my findings above I hold that the proviso to section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993 ousts the jurisdiction of this Court


Senlong J


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in relation between a bank and an individual customer. In the instant case I am satisfied that the plaintiff’s claim is predicated upon a loan it granted to the first plaintiff which is purely a banker/customer transaction. I therefore hold that this Court has no jurisdiction to hear and determine this ac-tion. Consequently, I think the appropriate order for me to make is one transferring the case to the High Court of Jus-tice of Kano State. Accordingly, in exercise of the powers conferred on me under section 22(2) of the Federal High Court Act and pursuant to Order 8 Rule 1 of the Federal High Court (Civil Procedure) Rule, this case is hereby trans-ferred to the High Court of Justice of Kano State, Kano Ju-dicial Division.

[1999] 9 N.B.L.R. (FEDERAL HIGH COURT, ENUGU DIVISION)

Dr Salihu Danlami Garba v. A-G and Minister of Justice 465

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Dr Salihu Danlami Garba v Attorney-General and Minister of Justice of Federal Republic of

Nigeria and others FEDERAL HIGH COURT, ENUGU DIVISION AJAKAIYE J Date of Judgment: 11 MAY, 1999 Suit No.: FHC/EN/CP/11/99

Failed Banks Tribunal – Conclusion of trial within 21 days – Failure to conclude trial within 21 days – Whether renders decision a nullity – Section 4(1) and (2) Failed Banks (Re-covery of Debts) and Financial Malpractices in Banks De-cree No. 18 of 1994 (as amended)

Facts The applicant was arraigned before the Failed Bank Tribunal (Zone 1), Enugu and that by virtue of that arraignment, he was detained and was still being detained even though the Failed Banks Decree stipulated that a trial of an accused per-son under the Decree should end within 21 working days. It was contended that since the trial of the applicant had ex-ceeded that time limit the continued trial and detention of the applicant was ultra vires the law and therefore unconsti-tutional. On the other hand, it was contended by the respon-dents that notwithstanding the fact that the respondents had exceeded the time limited by the Decree of the trial of the applicant, the court ought not to declare the trial and contin-ued detention of the applicant illegal and unconstitutional, particularly as the applicants were granted bail by the Tribu-nal.

Held – Section 4(2) of the Failed Banks Decree should be inter-preted to mean that even if there is no compliance with sec-tion 4(1) of the Decree, the trial of the case shall not be ren-dered a nullity. Section 4(2) of the Decree had nullified the effect of the decision in Okoroafor’s case as it pertains to matters related to the Failed Banks where there is non-



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compliance with sections 4(1) or 24(6) of the Decree, it is in the competence of the Special Appeal Tribunal to deal with. Application refused; Motion dismissed.


Nigerian Fawehinmi v Abacha (1996) 9 NWLR (Part 475) 710 Guardian Newspaper Ltd v Attorney-General of the Federa-tion (1995) 5 NWLR (Part 398) 703 Okoroafor v Miscellaneous Offence Tribunal (1995) 4 NWLR (Part 387) 59

Nigerian statute referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), sec-tions 1(5), 4(1), 4(2)

Counsel For the applicant: H.B.C. Ogboko, Esq. For the respondents: K.C. Nwakamma, Esq.

Judgment AJAKAIYE J: On 7 April, 1999, upon a motion ex parte filed on his behalf, applicant was granted leave to enforce his fundamental human rights alleged to have been violated by the respondents. Consequent upon this, a motion was filed putting the respondents’ on notice. The reliefs sought by the motion are:– (1) A Declaration that the continued detention of the

applicant at Enugu Prison without trial is unconstitu-tional, unlawful, illegal, null and void.

(2) An Order releasing the applicant from detention forthwith or in the alternative granting bail to the applicant.


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(3) A Declaration that the restriction of the movement of the applicant within the prison is illegal, unconstitu-tional, null and void.

(4) An Order of injunction restraining the respondents whether by themselves, their servants, agents and/or persons acting for and on behalf of the Federal Mili-tary Government from further interfering in any manner whatsoever with the applicant’s enjoyment of his fundamental rights to personal liberty and freedom of movement.

(5) AND for such further or other order(s) as this Hon-ourable Court may deem fit in the circumstances.

In support of the motion is a statement setting out the name and description of the applicant, the relief sought and the grounds for the relief in compliance with Order 1 Rule 2(3) of the Fundamental Rights (Enforcement Procedure) Rules, 1979. The application is further supported by 27 paragraphs affidavit sworn to on behalf of the applicant, though no affi-davit was sworn to verify the facts deposed to in accordance with the stipulation of the rules. In opposition to the motion is a 22 paragraphs affidavit deposed to on behalf of the re-spondents.

The crux of the complaint is that the applicant was ar-raigned before the Failed Banks Tribunal (Zone 1), Enugu and that by virtue of that arraignment, he was detained and is still being detained up till now even though the Failed Banks Decree stipulates that a trial of an accused person un-der the Decree should end within 21 working days. It is con-tended that since the trial of the applicant has exceeded that time limit the continued trial and detention of the applicant is ultra vires the law and therefore unconstitutional. On the other hand, it is contended by the respondents that notwith-standing the fact that the respondents had exceeded the time limited by the decree for the trial of the applicant, this Court ought not to declare the trial and continued detention of the applicant illegal and unconstitutional, particularly as the ap-plicants were granted bail by the Tribunal. (The facts so


Ajakaiye J


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summarised are deduced from the affidavit and counter affi-davit of the applicants and respondents respectively).

The learned Senior Advocate of Nigeria representing the ap-plicant, Chief E. Onyia addressed the court with forceful ar-guments in support of the application. The learned Counsel to the respondents, K.C. Nwakamma, Esq. when he was to reply indicated that he was going to base his submission on the fact that this Court has no jurisdictional competence to entertain the application. He also referred to the counter affidavit filed on behalf of the respondents. The learned Senior Advocate of Nigeria submitted that the continued detention of the applicant is unlawful and unconstitutional in that the time limited for the trial had expired and as such the trial outside the time limited and the consequent detention of the applicant cannot be justi-fied in Law. He submitted that in deciding this matter, the court should interpret section 4(1) of the Failed Banks (Recov-ery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (which I will hereafter in this Ruling refer to as “the Decree”). In aid of giving that provision the appropriate interpretation he referred the court to the case of Okoroafor v Miscellaneous Offences Tribunal (1995) 4 NWLR (Part 387) page 59 where it was held that the High Court has supervisory jurisdiction over the proceedings of Tribunals. He urged the Court to construe the provision of section 4(1) of the Decree liberally in favour of the applicant particularly in regard to the word “shall” in that section as word used in a command. He contended seriously that the jurisdiction of the Tribunal ceased the moment it exceeded the 21 working days limited for the trial of the applicant. He cited the case of Gani Fawehinmi v Sani Abacha and 3 others (1996) 9 N.WL.R. (Part 473) 710, particularly pages 726 and 727. He also cited the case of Oka-for v Attorney-General (Anambra State) (1991) 6 NWLR (Part 200) page 659 at 734. Learned Senior Advocate of Nigeria also placed reliance on Article 7(1)(d) of the African Charter on Human and Peoples’ Rights and contended that, irrespec-tive of the bail granted to the applicant by the Tribunal, the Tribunal is not competent to lawfully continue with the trial.

In his own submission in reply and in pursuance of his ob-jection to jurisdiction of this Court in the matter, learned


Ajakaiye J


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Counsel to the respondents submitted forcefully that by the combined effect of sections 1(5) and 3(2) of the Decree as amended, the jurisdiction of this Court is ousted. He referred to the averment in the respondents’ counter affidavit that the applicant was granted bail by the Tribunal and contended that it will amount to an abuse of the court’s process if this Court grants another bail to the applicant. He referred to sec-tion 4(2) of the Decree which states that the decision of the Tribunal shall not be set aside by the non-compliance with the 21 days statutory period. He contended further that if the applicant has any complaint in respect of this matter, it is to the Special Appeal Tribunal that it should go. He submitted further that it is the Tribunal that has exclusive power to grant bail to the applicant. He cited section 3(2) of the De-cree. To further buttress his point that once a provision of the Decree ousts the jurisdiction of the court on any matter, the court cannot act, he referred to the case of Salami v Chairman L.E.D.B. (1990) 1 Bar Monthly Law Reports Vol. 1 page 114 at 115. He urged the court to strike out the appli-cant’s motion with substantial cost.

In his reply on point of law, the learned Senior Advocate of Nigeria for the applicant submitted that the issue is not on the supervisory power of this Court but that in so far as the respondents are in breach of section 4 of the Decree, the Tribunal has no power to continue to try the case or to con-tinue to detain the applicant.

The issue for determination, to my mind, is the interpreta-tion of the relevant provisions of the Decree (particularly section 4(1) and (2) vis-à-vis the relevant provisions of the Fundamental Rights (Enforcement Procedure) Rules, 1979 in conjunction with section 42 of the 1979 Constitution. The contention of the applicant is that in as much as his trial be-fore the Failed Banks Tribunal could not be completed within 21 days, the Tribunal had ceased to have jurisdiction to try him and to detain him further.

For the purpose of having a very clear perception of the is-sue in contention, I shall set out the various relevant provi-sions of the Decree.


Ajakaiye J


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Section 1(5):– “(5) Notwithstanding the provisions of the Constitution of the

Federal Republic of Nigeria, 1979 as amended or any en-actment to the contrary the supervisory jurisdiction or power of judicial review of a High Court shall not extend to any matter or proceeding before the Tribunal duly Consti-tuted under this Decree.”

Section 3(2):– “(2) The Tribunal shall exercise exclusive jurisdiction over all

ancillary matters including remand, bail and any other pre-liminary issues connected with an offence or hearing over which the Tribunal has jurisdiction.”

Section 4:– “(1) The Tribunal shall deliver its judgment not later than 21

working days from the day of its first sitting.” “(2) The decision of a Tribunal shall not be set aside or treated

as a nullity solely on the ground of noncompliance with the provisions of this section or section 24(6) of this Decree unless the Special Appeal Tribunal exercising jurisdiction by way of appeal from or review of that decision is satis-fied that the party complaining of such non-compliance has suffered a miscarriage of justice by reason thereof.”

I am very much aware of and familiar with cases in which interpretations were given to ouster clauses in Decrees prom-ulgated by the Federal Military Government. In such cases the judicial reaction has always and consistently been that whenever a decree vests on an authority exclusive power (no matter how wide that power) in respect of any matter and notwithstanding the provision of an ouster clause, the courts still have the inherent jurisdiction to see whether that power has been exercised in accordance with the stipulations in the enabling Decree. It is when there is that compliance that the courts are forbidden to entertain any matter based on it. That was the reasoning and the decision in the case of Okoroafor v Miscellaneous Offences Tribunal and the case of Gani Fawe-hinmi v Sanni Abacha (supra) cited by the learned Senior Advocate of Nigeria for the applicant. In both cases, the Court of Appeal extensively dealt with the matter and vehe-mently asserted that it is only absolute compliance with the exercise of the power as granted that makes such a decree


Ajakaiye J


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or law a “no go area” for the court. However, it appears to me that the Decrees the courts were interpreting in those cases are not as restrictive as the one we are dealing with in this case.

In the Okoroafor case, the issue was whether all the neces-sary conditions precedent to bringing an action have been fulfilled. If they were, then the court cannot interfere. The court was able to interfere because there was flagrant dis-obedience of the law governing operation of the Tribunal. Arguably that situation is similar to the present case under consideration. The difference however is that the makers of the Decree in this case probably learnt from the lapses in Decree No. 9 of 1991 in consideration in the Okoroafor’s case. That was probably why they inserted subsection 2 of section 4 to the effect that the decision of the Tribunal shall not be rendered a nullity simply because of non compliance with, sub section 4(1) of the Decree. “Decision referred in section 4(2) of the Decree encompasses the whole trial. It is a symbol of the totality of the trial. If the decision of a case is a nullity, to my mind, the whole trial is a nullity. There-fore section 4(2) of the Decree should be interpreted to mean that even if there is no compliance with section 4(1) of the Decree the trial of the case shall not be rendered a nullity. It can be seen therefore that the ‘mischief’ created in the deci-sion of Okoroafor had been taken care of by section 4(2) of the Decree. In other words, section 4(2) of the Decree had nullified the effect of that decision as it pertains to matters related to the Decree (that is the Failed Banks Decree). This is reinforced by the power vested in the Special Appeal Tri-bunal in matters where there is non compliance with section 4(1) or 24(6) of the Decree, that is matters dealing respec-tively with statutory period for completing trial or starting off trial”.

I should not conclude this ruling by not commenting on section 1(5) of the Decree which expressly forbids the exer-cise of the power of supervision or judicial review of the High Court notwithstanding the Constitution. With that pro-hibitive provision and the express provision of section 4(2)


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of the Decree, I agree with learned Counsel to the respon-dents that this is not a case in respect of which this Court can intervene by way of fundamental right enforcement.

My conclusion in this ruling is in consonance with the view of Ayoola, JCA in the case of Guardian Newspaper Ltd v Attorney-General of the Federation (1995) 5 NWLR (Part 398) page 703 at pages 751–752 where he said:–

“Ouster Clauses in Statutes are of Long Standing Origin. Their use when properly applied in Administrative Law cannot be doubted. Their presence in two broad categories of cases had not given an adherent to the concept of rule of law any anxiety. The first category is where the statute had already made adequate pro-visions for the hearing and determination before the Tribunals or bodies other than the court of grievances that may arise from ex-ercise of power. The second category is such cases in which exer-cise of power may not directly involve interference with individ-ual liberty or rights and interest in property and in which the court applying the principle of self restraint would itself have exercised a discretion not to intervene. What gives concern is the exclusion of the jurisdiction of the courts in cases where rights and interests may directly be affected by exercise of powers conferred by the relevant statute but no grievance procedure is put in place for seeking protection from and remedy for abuse or wrongful use of such powers.” (Emphasis mine.)

In this case a “grievance procedure” has been put in place for seeking protection from and remedy for abuse or wrong-ful use of powers or non compliance with terms of trial by the provision of section 4(2) of the Decree. But for the pro-vision of the said section 4(2) of the Decree this Court might have been fully empowered to intervene and, because of it, I am unable.

It is for the above reasons that I am unable to grant the ap-plicant’s prayers. The motion is therefore dismissed.

[1999] 9 N.B.L.R. (COURT OF APPEAL, IBADAN DIVISION)

United Bank for Africa Ltd v. Mudasiru Oladipo Ademuyiwa 473

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United Bank for Africa Limited v Mudasiru Oladipo Ademuyiwa

COURT OF APPEAL, IBADAN DIVISION ONALAJA, OLAGUNJU, ADEKEYE JJCA Date of Judgment: 20 MAY, 1999 Suit No.: CA/I/50/94

Banking – Cheque – Wrongful dishonour of – Breach of contract – Damages – Measure of Bill of Exchange – Cheque as – Wrongful dishonour of – Damages to be regarded as liquidated – Section 57 Bill of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 – When not applicable Facts The plaintiff, now respondent, in the High Court of Abeo-kuta, Ogun State issued a Writ of Summons against the de-fendant a public company which carried on the business of Banking throughout the length and breadth of the Federal Republic of Nigeria. It has branches throughout Nigeria with its Headquarters in Lagos. It had a branch in Abeokuta, Ogun State wherein plaintiff/respondent operates account number 201-035256-9, which account was operated under the business name and style of Ola Ademuyiwa Commercial Enterprises.

On 18 December, 1989 the plaintiff/respondent averred that he paid into the said account a sum of N50,000 (Fifty Thousand Naira). On 19 December, 1989 he drew a cheque for withdrawal of the sum of N50,000 which was approved but the then Branch Manager refused the payment. plain-tiff/respondent complained to the Branch Manager who was discourteous to him, shouted on him used unprintable and derogatory remarks on him in the banking hall in the pres-ence of many customers of the defendant wherein plain-tiff/respondent was thoroughly humiliated.

On 22 December, 1989 plaintiff/respondent issued a cheque for the sum of N5,000 to his customer in his frozen fish business. The drawee duly presented the cheque but was unpaid in that he needed proper identification. He



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presented his driving licence which was rejected but that the drawer should come to identify the drawee. Plaintiff as drawer personally identified the drawee yet the defendant still dishonoured the cheque. As a result, he issued a writ of summons against the defendant.

The claim of the plaintiff was as follows:– “Wherefore the plaintiff claims against the defendant the sum of N30,000 (Thirty Thousand Naira) being special and general dam-ages for breach of contract.

‘Particulars of Damage’ Special Damages

(1) Loss of reputation for dishonouring the cheque dated 19 December, 1989 – N10,000.

(2) Loss of profit for dishonouring the cheque dated 22 De-cember, 1989 – N15,000.

General Damages N3,000.”

The defendant called the loan recovery officer at its Abeo-kuta Branch as the only defence witness. He opened his tes-timony that defendant forwarded the statement of account of plaintiff/respondent with the defendant regularly to the plaintiff as he enjoyed credit facility from defendant.

As at 19 December, 1989, plaintiff had no funds in his ac-count with defendant, as at the close of business on 18 De-cember, 1989. On 19 December, 1989 plaintiff paid in a sum of N50,000 and drew a cheque simultaneously to with-draw N50,000. As plaintiff no longer enjoyed overdraft fa-cility inspite of the certified bank cheque lodgment, after deduction of bank charges made, the account of plaintiff was not up to N50,000 hence the refusal to honour the cheque for insufficiency of funds. He denied that the plain-tiff was abused in the banking hall on 19 December, 1989 by the Branch Manager of the defendant.

The trial Judge awarded the plaintiff the sum of N80,000. The appellants not satisfied with the judgment appealed contending in the main that the judgment was perverse in that it gave more than claimed and was a radical departure from the pleadings.



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Held – 1. The refusal by a banker to pay a customer’s cheque who

has a sufficient fund with the bank to cover the amount endorsed on the cheque amounts to a breach of contract for which the bank is liable in damages.

2. The Rule in Hadley v Baxendale (1854) 9 Exch. 341 is usually not applied to cases of Banker to his Customer as a cheque is a Bill of Exchange under section 2(1) Bills of Exchange Act Cap 35 Laws of the Federation of Ni-geria, 1990. The measure for award of damages is by virtue of section 57 of the Bills of Exchange Act that where a bill is dishonoured the measure of damages shall be deemed to be liquidated damages.

3. The holder may recover from any party liable on the bill and the drawer who has been compelled to pay the bill may recover from acceptor and an endorser who has been compelled to pay the bill may recover from the ac-ceptor or from the drawer or from a prior endorser:–

(a) the amount of the bill; (b) interest thereon from the time of presentment for

payment if the bill is payable on demand and from the maturity of the bill in any other case; and

(c) the expenses of noting or when protest is necessary and the protest has been extended, the expenses of protest.

4. The award and measure of damages under section 57 Bills of Exchange Act does not include award of general damages. What is permissible is liquidated damages.

5. Section 57 of the Bills of Exchange Act may not apply where the action is based on negligence which must be properly averred, pleaded and proved.

Appeal allowed.


Nigerian Koya v UBA Ltd (1997) 1 NWLR (Part 481) 251



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R.A. Salami and Sons v Savannah Bank (Nigeria) Ltd (1990) 2 NWLR (Part 130) 106 U.B.N. Plc v Scpok Nigeria Ltd (1998) 12 NWLR (Part 578) 439

Nigerian statute referred to in the judgment Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990, sections 2(1), 57

Counsel For the appellant: O.O. Akinbode, Esq. For the respondent: Adio Akinwande, Esq.

Judgment ONALAJA JCA: (Delivering the lead judgment) The plaintiff, now respondent, in the High Court of Abeokuta, Ogun State issued a writ of summons against the defendant a public com-pany which carries on the business of banking throughout the length and breadth of the Federal Republic of Nigeria. It has branches throughout Nigeria with its Headquarters in Lagos. It has a branch in Abeokuta, Ogun State wherein plain-tiff/respondent operates account number 201-035256-9, which account was operated under the business name and style of Ola Ademuyiwa Commercial Enterprises.

On 18 December, 1989 the plaintiff/respondent averred that he paid into the said account a sum of N50,000 (Fifty Thousand Naira). On 19 December, 1989 he drew a cheque for withdrawal of the sum of N50,000 which was approved but the then Branch Manager refused the payment. plain-tiff/respondent complained to the Branch Manager who was discourteous to him, shouted on him, used unprintable and derogatory remarks on him in the banking hall in the pres-ence of many customers of the defendant when plain-tiff/respondent was thoroughly humiliated.

On 22 December, 1989 plaintiff/respondent issued a cheque for the sum of N5,000 to his customer in his frozen fish busi-ness. The drawee duly presented the cheque but was unpaid that he needed proper identification. He presented


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his driving licence which was rejected that the drawer should come to identify the drawee. The plaintiff as drawer person-ally identified the drawee yet defendant still dishonoured the cheque. As a result he issued a writ of summons against the defendant. As the headquarters of defendant was in Lagos plaintiff sought the leave of Court to issue and serve the writ of summons outside jurisdiction, the prayer was granted.

The defendant was duly served. After service the plaintiff and defendant filed, delivered and exchanged pleadings. plaintiff filed his statement of claim. In the course of trial plaintiff brought an application to amend the statement of claim which was eventually withdrawn and struck out. The defendant filed a statement of defence to which a reply was filed by plaintiff. This was the stage of the pleadings at the trial and conclusion of trial.

It is now an accepted principle and elementary in our civil jurisprudence and civil process that a statement of claim su-persedes the particulars of claim in the writ of summons though the averment by way of claim must not and shall not be contrary to the claim in the writ of summons. (See Lahan v Lajoyetan (1972) 6 SC. 190; University of Calabar v Es-sien (1996) 10 NWLR (Part 477) 225 SC.; Obawole v Wil-liams (1996) 10 NWLR (Part 477) page 146 SC; Nzeribe v Attorney-General Imo State (1996) 10 NWLR (Part 478) 322 C.A.; Onyero v Nwadike (1996) 9 NWLR (Part 471) page 231 C.A.; Atoyebi v Bello (1997) 11 NWLR (Part 528) page 268 C.A.; and Odusoga v Ricketts (1997) 7 NWLR (Part 511) page 1 SC.) Applying the above authorities the plaintiff concluded his statement of claim as follows:–

“Wherefore the plaintiff claim against the defendant the sum of N30,000 (Thirty Thousand Naira) being special and general dam-ages for breach of contract.

‘Particulars of Damage’ Special Damages

(1) Loss of reputation for dishonouring the cheque dated 19 December, 1989 N10,000.

(2) Loss of profit for dishonouring the cheque dated 22 De-cember, 1989 N15,000.


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General Damages N3,000.”

The plaintiff testified for himself that he operated account no. 201/03256/9 with the defendant at its Abeokuta Branch. On 19 December, 1989 he lodged into the said account a bank draft with No. ZM6390074 for the sum of N50,000 thus giving him I quote:–

“Thus giving my said current account with defendant a total out-standing sum of N51,516.69. I however issued a cheque for N50,000 on my said account payable to myself on the 19 December, 1989. The cheque bore the number 069730. I personally presented the cheque and was given the tally with No. 14. After a while the cheque was returned unpaid by the branch manager and I demanded to know from the Bank Manager the reason for the non-payment of my said cheque. The Manager insisted he was not permitting any payment of the cheque inspite of my informing him that I already had an out-standing credit of N51,516.69 in my said account with his Branch Bank. The Manager ended up saying ‘to hell with you and your cheque’ which he latterly threw back at me.”

The photocopy of cheque no. AKB/069750 was admitted with the consent of the parties and marked exhibit B.

The plaintiff as first PW testified further that on 25 De-cember, 1989 he issued cheque AKTS/069731 for the sum of N5,000 to Mr Latifi Fatunbi who testified as second PW. When the defendant insisted on his identification having re-jected the production of his driving licence he accompanied second PW to the Branch office of the defendant in Abeo-kuta. Apart from the fact that the cheque was his personal cheque and he identified second PW the defendant still re-fused to honour the cheque. The cheque of 22 December, 1989 was admitted as exhibit C. The exchanges of letters between the parties and solicitors on 27 December, 1989, letter from plaintiff to the Manager of defendant dated 27 December, 1989 and letter of 22 January, 1990 were marked exhibits D, E and F respectively.

The refusal of the cheque to second PW for the supply of frozen fish resulted in heavy financial loss during the Christmas of 1989. On the loss he testified as follows:–

“I would have made a profit of about N50,000 for that month of December, 1989 had I been able to get fish supplies from


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Mr L. Fatunbi if he had been paid my cheque for N50,000 issued to him legitimately by me.”

The plaintiff as first PW concluded his evidence in chief as follows:–

“I claim the sum of N30,000 for breach of contract while the ear-lier sum of N50,000 is a claim for anticipated profit for loss of fro-zen fish business occasioned by the unpaid cheque exhibit C is-sued to Mr L. Fatunbi.”

The plaintiff as first PW was subjected to rigorous cross-examination that when he issued the cheque for N50,000 he did not have sufficient fund in the account to meet the amount, as at that time he no longer enjoyed overdraft facil-ity the same having been cancelled. He denied the cancella-tion of his overdraft facility as the cancellation was not communicated to him. He maintained that he had a credit balance of N51,516.61 after deduction of bank charges on his account as at 18 December, 1989. He agreed that after his solicitor’s letter defendant paid him the proceeds of his cheque on 29 December, 1989 for the sum of N49,769.60.

The second PW was the recipient of cheque drawn on 22 December, 1989 by first PW in his favour for the sum of N5,000 as part payment in the course of his business rela-tionship with first PW. He narrated his harrowing experience over the issue of his identification and the refusal of defen-dant to honour the cheque exhibit C drawn in his favour by plaintiff/respondent the drawer of the cheque notwithstand-ing his personal identification of second PW. He concluded his evidence in chief that he had a very poor impression of plaintiff/respondent as a reliable and trustworthy customer and or business man. In a terse cross-examination he stated that plaintiff/respondent’s physical endorsement of the cheque did not correct the earlier misgiving he had of plain-tiff as a customer and business man. With this witness plain-tiff concluded and closed his case.

The defendant called the loan recovery officer at its Abeo-kuta Branch as the only defence witness. He opened his tes-timony that defendant forwarded the statement of account of


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plaintiff/respondent with the defendant regularly to the plaintiff as he enjoyed credit facility from defendant.

As at 19 December, 1989, plaintiff had no funds in his ac-count with defendant, as at the close of business on 18 De-cember, 1989. On 19 December, 1989 plaintiff paid in a sum of N50,000 and drew a cheque simultaneously to with-draw N50,000. As plaintiff no longer enjoyed overdraft fa-cility inspite of the certified bank cheque lodgment after de-duction of bank charges made the account of plaintiff not to be up to N50,000 hence the refusal to honour the cheque for insufficiency of funds. He denied that the plaintiff was abused in the banking hall on 19 December, 1989 by the Branch Manager of the defendant.

He testified that as plaintiff had earlier informed the de-fendant of the misplacement of his current cheque book it was out of caution that the cheque issued to second PW on 22 December, 1989 for presentation was rejected and for proper identification. His testimony about the transaction on exhibit C was hearsay and ought not to have been recorded. Defendant witness did not deal directly with plaintiff on 19 December, 1989. It was during cross-examination of this witness that it was extracted that he did not deal directly with plaintiff, his testimony was based on information passed on to him by the officers who handled the matter di-rectly with the plaintiff. With this witness defendant con-cluded and closed its case.

Learned Counsel to the parties addressed the court after which the learned trial Judge gave his considered judgment on 2 June, 1992 to be found at pages 55 to 67 of the record of appeal and excerpts of part of the judgment are set down as follows:–

“I thereby find acceptable as proved the entire sum claimed by plaintiff both as to breach of contract and as to loss of business profit (including also in this instance loss of reputation and also customers) to his business in the respective sums of N30,000 and N50,000 as claimed. The total sum of N80,000 is liable to be awarded. More so for lack of any contrary evidence of such mag-nitude of loss being what plaintiff suffered in the circumstances of this case adduced by defendant.”


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To conclude therefore on the foregoing, I find validity for the claim being made by plaintiff on the issues joined on the pleading of parties. That is that defendant is in breach of its contract with plaintiff by his wrongful refusal to pay the cheques for the respective sums of N50,000 and of N50,000 on the 19th and 22 December, 1989 when there were suffi-cient funds in plaintiffs business account no. 201/03256/9 and kept with defendant by which plaintiff ran his business of selling frozen fish. This fact of the nature of plaintiff’s said account is well known to defendant over the years. Consequently, it is my view and found proved also that the quick business profit that plaintiff would have made on the sale of the frozen fish for the Christmas period of 1989 completely were lost to him. So also was injury caused to his business, his credit as a business man and credit to his business also both of which are intertwined in him by such inexplicable refusal to pay plaintiffs two cheques without just cause or causes:–

“No part of the damages he claims as to N50,000 for loss of profit for the month of December, 1989 as loss of business or loss of business reputation for the unjustified dishonour of two of his cheques and or as to each of them have been averted by any re-sponse of defendant. There was loss of business reputation im-plied by operation of law through the loss of customers to him consequent on his inability to temporarily satisfy his customers by selling them frozen fish in that month of December, 1989. It is re-alised that that was the usual hectic month of Christmas when there was unusual activities of buying and selling. The N30,000 for breach of contract is hereby upheld also. The grand total mone-tary compensation to plaintiff which I find proved in this action is exactly as claimed by him in oral evidence before the court by which he enhanced the respective amount claimed by him in his statement of claim which had itself earlier amended the claims on his writ in the sum of N80,000. I find legal support in the law which I have applied in the cases of H.A. Balogun v National Bank of Nigeria Ltd (1978) 3 SC. 155 and Alhaji R.A. Salami (Trading under the business name of R.A. Salami and Sons) v Savannah Bank of Nigeria Limited (1990) 2 NWLR (Part 130) 106.” (The italics were supplied.)

The defendant was dissatisfied with the judgment of the learned trial Judge by filing timeously the notice of appeal


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at pages 69 and 70 of the record wherein defendant hence-forth referred to as appellant in this judgment formulated two grounds of appeal and in accordance with the Rules of this Court furnished the particulars. With the leave of this Court appellant filed four amended grounds of appeal which were incorporated into appellant’s brief of argument filed in this Court on 27 October, 1994 wherein at page 4, it raised the issues for determination as follows:– Based on the pleadings filed by parties in this matter, evi-dence preferred in support of the pleadings, the relevant law as well as the Grounds of Appeal filed in this Honourable Court the following issues arise for determination in this appeal:– “1. Whether the trial Judge is justified in accepting the evi-

dence of a party which amounted to departure from what he claimed in his writ of summons and pleadings.

2. Whether the learned trial Judge has jurisdiction over the excess on N30,000 claimed by the plaintiff/respondent in his writ of summons and pleadings.

3. Whether the learned trial Judge is justified to award more than the amount claimed in the writ of summons and plead-ing.”

After service of the appellant’s brief of argument the re-spondent filed with leave of court respondent’s brief of ar-gument in this Court on 6 June, 1993. At page 3, paragraph 3 of respondent’s brief of argument respondent raised the undermentioned as the issues for determination in this ap-peal.

Issues for Determination Having due regards to the pleadings filed in this matter, evidence before the trial court the judgment of the trial court and the grounds of appeal filed in this Honourable Court of Appeal, it is submitted that the issues for determination are as follows:–

(i) Whether averments proved by evidence on oath in court at the trial supersede averments in the statement of claim.

(ii) Whether if there is a variation between the amount claimed by a party in the writ of summon and statement of claim and the amount proved by evidence on oath in court at the trial, the trial court is wrong to have accepted or preferred


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the amount proved by evidence on oath in court in awarding damages.

(iii) Whether in the peculiar circumstances of this matter the learned trial Judge is right, justified or have jurisdiction to have awarded more than the amount claimed in the writ of summons and pleadings.

(iv) Whether from the totality of evidence before the trial court and briefs before this Court the judgment of the trial court ought to be reversed entirely or in part as appertained to the amount of damages awarded if the Court of Appeal found for the appellant.

Upon the matter coming up for argument on appeal before this Court, the learned Counsel to the appellant and the re-spondent each adopted and relied on appellant’s brief of ar-gument and respondent’s brief of argument. I have looked critically, and deeply into the briefs of argument of the par-ties and after careful considerations of the issues distilled by the parties they are encompassed into the undermentioned issues based on the amended four grounds of appeal as fol-lows:– “(i) Whether having regards to the pleadings, the evidence

based upon them the plaintiff discharged the burden upon him and was entitled to the judgment in his favour.

(ii) Whether the award of the sum of N80,000 in favour of the plaintiff by the learned trial Judge was based on right prin-ciple of law on award of damages when the learned trial Judge awarded damages more than the amount claimed by the plaintiff.”

The complaint of the appellant against the judgment of the learned trial Judge succinctly put is that the claim of the re-spondent as averred in the statement of claim was N30,000 being special and general damages for breach of contract. Though respondent sought leave to amend his statement of claim but abandoned to move the motion and was struck out, so the learned trial Judge lacked jurisdiction to enhance the damages more than the amount claimed by the respondent. The oral testimony of the respondent could not be and should not be contradictory or in conflict with the pleadings. The decision of the trial Judge in basing his judgment is con-trary to law as pronounced in various judgments of


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courts. In Esso Petroleum Co Ltd v Southport Corporation (1956) A.C. 218 at 238, 241 Lord Radcliffe stated:–

“I think that this case ought to be decided in accordance with the pleadings.”

Whilst in African Continental Bank Ltd v Attorney-General of Northern Nigeria (1969) NNLR 231 Obaseki, JSC ob-served as follows:–

“We find no circumstances to justify a departure from the rule the plaintiffs must be held to the case put forward in their writ of summons and pleadings.”

The respondent testified that:– “I claim the sum of N30,000 for breach of contract while the ear-lier sum of N50,000 is a claim for anticipated profit for loss of frozen fish business occasioned by the unpaid cheque exhibit C is-sued to Mr L. Fatunbi.”

The appellant contended that the award of N80,000 was far in excess of the amount claimed, was wrong in law and ought to be set aside by this Court as decided in Ekwunife v Wayne (WA) Ltd (1989) 5 NWLR (Part 122) page 422 at 425 that:–

“It is settled law that a judge should never award an amount which is never claimed or pleaded by either party or in excess of what is claimed.”

That the learned trial Judge misdirected himself when he stated thus and without justification that:–

“I have a sneaky suspicion that defendant’s rather non-challant at-titude and or inadequate response to fight back plaintiff in this case stemmed from some strange dealing which cannot see the light of day if ever they were unfolded.”

The appellant submitted and contended with respect that this was not borne out from the evidence and be rejected.

Relying on Etim Epeyong and 3 others v Inyang Effiong Nyong and 6 others (1975) 2 SC. 71 at 80, the appeal be al-lowed as the sum of N50,000 as anticipated profit was nei-ther claimed nor pleaded it just came out of the blues from the testimony of respondent.

For the above reasons, the Court should allow the appeal and dismiss the claim of the respondent having not estab-lished same in law.


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On his own part the respondent submitted that the learned trial Judge was not in breach of the rule and spirit of plead-ings. He submitted that pleadings are mere notice of what to come or likely to come before the court as averments are not equivalent or tantamount to evidence (see Ajuwon and oth-ers v Akanni and others (1993) 9 NWLR (Part 316) 182, 1993 12 SCNJ 32 at 51 and Nzeribe v Dave Engineering Co Ltd (1994) 8 NWLR (Part 361) 124; (1994) 9 SCNJ 161 at 172 as appellant did not admit the averments of the respon-dent.)

That though N30,000 was pleaded and N80,000 was claimed and proved the learned trial Judge was right when he stated:–

“In this case plaintiff gave such evidence of monetary loss which the dishonouring of his cheque to second PW cost him in all prob-ability for the business he was not able to transact effectively in December, 1989 when his said cheque to second PW was unjusti-fiably dishonoured. There was no effective challenge to that evi-dence. Nor was it in any manner rebutted with the thinking of my mind over the circumstances of this case, I am inclined to believe it as now express myself to do of that vital evidence. I am not un-mindful of the fact that that accepts a variation of the original amount being claimed on the writ. It only means that consistent with the law, that original figure has become amended or substi-tuted between the time the writ and statement of claim were filed to when plaintiff gave evidence to reflect the truer or more proper calculation of his loss, consequent on that breach of contract.”

The amount of N80,000 was not challenged or controverted as the trial Court accepted it the learned trial Judge was jus-tified. (See Baba v Nigeria Civil Aviation and another (1991) 7 S.C.N.J; (1991) 5 NWLR (Part 192) 388; J.A. Odubeko v C.O.O. Fowlerand another (1993) 7 NWLR (Part 308) 637; (1993) 9 SCNJ 185 at 198–199; and Nzeribe v Dave Engineering Co Ltd (1994) 8 NWLR (Part 361) 124 (supra)).

The respondent urged the Court to hold that the trial court was right to have accepted or preferred the amount proved on oath in awarding damages of N80,000 to that of N30,000 on writ and statement of claim.


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On the complaint against award of N80,000 instead of N30,000 by the appellant. The respondent contended that it has no basis in that respondent having claimed damages enlarged the amount in oral evidence which was permissible as decided in Honourable Justice Adenekan Ademola v Chief Harold Sodipo (1992) 7 NWLR (Part 253) 251; (1992) 7 SCNJ 417 at 446 wherein Ogundare, JSC stated:– “The Ogun State High Court Rules and similar rule in other High Court Rules does not alter this basic rule, it only per-mits the Court to make an order, though not asked for but which is ancillary or incidental to a relief proved and granted in order to make that relief effectual. Even here too the parties should be heard before such order is made”.

That in the instant case the appellant was adequately heard thereby the relief granted was still within the purview of law. So the learned trial Judge acted within the law and rightly made the award.

In order to reverse the award, appellant has the burden to show effectively that the learned trial Judge acted upon some wrong principle of law or that the amount awarded was so extremely high or so very small as to make the judgment an entirely erroneous estimate of the damages to which the plaintiff is entitled. References were made to legal authorities to back the contention, which in my understanding is the principle to guide an appellate court and its attitude towards award of damages by trial court (see Flint v Lovell (1935) 1 KB 354; Nzeribe v Dave Engineering Co Ltd (supra); and Elf Nigeria Ltd v Opers Sillo and another (1994) 6 NWLR (Part 350) 258; (1994) 7–8 SCNJ page 119 at 136.)

In the light of the above, respondent therefore urged this Court not to disturb the findings of the trial court as the award of N80,000 was rightly made, as borne out from the pleadings and evidence.

For the foregoing reasons this appeal lacks merit and ought to be dismissed and should be dismissed with sub-stantial costs in favour of respondent.

Having stated the contentions of the parties as summarised above with the encompassed issue by this Court will lead to


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the consideration of the first issue of pleadings, applicability to evidence and burden of proof.

This being a civil case the onus placed upon the respon-dent are as set out in sections 135, 136 and 137 of the Evi-dence Act Cap 112 Laws of the Federation of Nigeria, 1990 to establish his case by credible, satisfactory and convincing evidence based on the pleadings by preponderance evidence of probability. The plaintiff must succeed on the strength of his own case and not on the weakness of the defendant’s case. The exception to this rule is that where facts relied upon by the defendant (appellant in this case) supports facts in the plaintiff’s case, the plaintiff can use those facts which support plaintiff’s case in establishing and proof of plain-tiff’s case (see Kodilinye v Mbanefo Odu 2 W.A.C.A. 336; Cobblah v Gbeke 12 W.A.C.A. 294; Progress Bank Nigeria Ltd v Ugonna (Nigeria) Ltd (1996) 3 NWLR (Part 435) page 202 C.A.; Umeania v Emodi (1996) 2 NWLR (Part 43) Page 348 C.A.; and Akinola v Oluwo (1962) 1 All NLR 224 SC.; (1962) 1 SCNLR 352.)

In this appeal emphasis have been raised on pleadings and its importance under Nigeria’s adversarial system. The im-portance of pleadings in our civil process cannot be over emphasised as considered in the following cases:– (a) Egbulefu Onyero and another v Augustine Nwadike (1996)

9 NWLR (Part 471) 231 at 238, 239 C.A. “In our adversarial system of civil jurisprudence pleadings

is the life wire, blood and corner stone with the rule based upon the ancient rule of natural justice of audi alteram par-tem (that is to hear the other side). It is for this reason to meet this rule that under our system anybody be it a party, or witness must know in advance what he or she is going to say in court and to prepare for his or her defence by a fore knowledge of what the adversary is likely to confront him with and to prepare for it rather than be groping in the dark and to avoid element of surprise. Therefore, acknowledge are facts upon which a party relies by stating it in his plead-ing by pleading material facts not the evidence to support the pleaded facts as provided in the Uniform High Court (Civil Procedure) Rules adopted by each state for its con-venience in orders dealing with pleadings as Order 25


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High Court (Civil Procedure) Rules, 1988 Imo State of Ni-geria. ‘Order 25(4)(1)(a) – Every pleading shall contain and contain only a statement in a summary form of the ma-terial facts on which the party pleading relies for his claim or defence as the case may be, but not the evidence by which they are to be proved and shall when necessary, be divided into paragraphs numbered consecutively.’

(2) The facts shall be alleged positively, precisely and distinctly and as briefly as is consistent with a clear statement.”

The main function of pleadings is to focus with much cer-tainty as far as possible the various matters actually in dis-pute among the parties and those in which there is agree-ment between the parties by avoiding element of surprise being sprung on the opposite party (see Abimbola George and others v Dominion Flour Mills Ltd (1963) 1 SCNLR 117; (1963) 1 All NLR 71 at 77; Ferdinand George and an-other v UBA Ltd (1972) 8–9 SC. 264, and Morinatu Oduka and others v Kasumu and another (1968) N.M.L.R. 28).

It is this important role that pleadings play in our civil juris-prudence that gave rise that both the court and the parties are bound by their pleadings, as unpleaded fact goes to no issue.

In Phillips v Phillips (1874) 4 Q.B.D. 127 Cotton, LJ stated:– “The word ‘material’ means necessary for the purpose of formu-lating a complete cause of action and if any one material statement is omitted, the statement of claim is bad.”

In Christopher Udechukwu v Isaac Okwuka (1956) SCNLR 189, (1956) FSC 70 was a case of claim in detinue wherein for a plaintiff to succeed in a suit in detinue the plaintiff must establish by pleading the wrongful detention of his chattel by the defendant must over the wrongful detention with demand, and refusal of the return of his chattel in the statement of claim.

The Supreme Court held as follows:– (2) It is well settled that a statement of claim when filed

supersedes the writ of summons and must itself dis-close a good cause of action.

(3) In the circumstances of this case the trial Judge was right in that the statement of claim did not disclose a


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good cause of action, because it did not state the wrongful detention of his chattel though it was in the writ of summons.

The matter was also considered whether a relief sought in the statement of claim supersedes a special relief in the writ by the Supreme Court in Chief J.O. Lahan and others v Lajoyetan and others (1972) 6 SC. 190, (1972) 1 All NLR (Part 2) page 217, (1973) N.M.L.R. 44, (1972) NSCC 460 wherein it was held that in a land claim for an order of setting aside a deed of conveyance and also damages for trespass and injunction, the statement of claim supersedes a writ, so if a special relief is claimed in the writ which is not claimed in the statement of claim it will be deemed that the special relief has been aban-doned. Also where in statement of claim a consequential relief is added to the claim in the writ of summons such additional claim will be deemed as claimed before the court.

In M.A. Enigbokan American International Insurance Co Nigeria Ltd (1994) 6 NWLR (Part 348) page 4 at 19, Bel-gore, JSC held:– “(1) In all actions in our superior courts of record where pleadings

set out the facts relied upon by each party a writ must first be taken out of the court’s registry. But once the pleadings are filed and exchanged, the statement of claim therefrom super-sedes the writ. It is the law that the writ of itself must disclose reasonable cause of action, in many cases the statement of claim more than a writ amplifies through facts averred the real action a party pursues Nta v Anigbo (1972) 5 SC. 156; Udechukwu v Okwuka (1956) 1 FSC 70 at 71, (1956) SCNLR 189. It is however necessary for the statement of claim to aver clearly its purport and the practice whereby at the conclusion of the statement of claim the plaintiff avers. The plaintiff therefore claims as per writ of summon should be discouraged. It is in the interest of justice to state clearly all that a party claims and reference to writ of summons is a lazy way of pleading Keshinro v Bakare (1967) 1 All NLR page 280 at 284; see also Iguh, JSC at page 20 paragraphs F–H.”

In First Bank of Nigeria Plc v Nze K.C. Ibennah (1996) 5 NWLR (Part 451) page 725 at 738 the Court of Appeal held:– “(1) In establishing the case, the plaintiff must confine itself to

pleaded facts as facts not pleaded go to no issue. As the


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rule of pleadings is the bedrock of our civil jurisprudence lends credence to the importance of pleadings in our system as a case succeeds or fails based upon the pleading. It is this pre-eminence position of pleading that provided the rule that both the courts and parties are bound by the plead-ings. The rule had its origin of the rule of natural justice of audi alteram partem (that is hear the other side.) This rule is a safety valve against the element of surprise on the ad-verse party.”

I have taken the pains to set out the role and importance of pleadings in our civil jurisprudence and reiterate that a case succeeds or fails on the pleadings being that both the courts and the parties are bound by the pleadings as unpleaded fact go to no issue Union Bank of Nigeria Plc v Scpok Ngeria Ltd (1998) 12 N.W.L.R. (Part 578) page 439 at 477–478.

It is ex-abundanti cautela that the claim of respon-dent/plaintiff as averred and pleaded in the statement of claim was stated above in the body of this judgment and without any shadow of doubt or paradventure it was for a sum of N30,000 being special and general damages for breach of contract. With particulars furnished for loss of reputation for dishonouring the cheque dated 19 December, 1989 wherein respondent claimed N10,000. For loss of profit for dishonouring cheque dated 22 December, 1989 was exhibit C, issued for a sum of N5,000 and for which re-spondent claimed the sum of N15,000. Finally respondent claimed general damages for N5,000 for breach of contract.

Looking critically but favourably and deeply into the state-ment of claim nowhere respondent pleaded the oral testi-mony that he would have made a profit of about N50,000 for the month of December, 1989 had he been able to get fish supplies from Mr L. Fatunbi, second PW, if he had been paid his cheque for N50,000. As this was unpleaded fact it was wrong to have allowed evidence on it as it is trite law that unpleaded facts go to no issue. The findings of fact by the learned trial Judge for loss of profit of N50,000 having not been pleaded ought not to have been allowed to be given on it. The finding of fact was perverse. Where a finding of fact by the trial court is found to be perverse it constitutes an


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exemption to the rule that an appellate court is loathe to dis-turb the finding of fact. As the loss of profit of N50,000 was unpleaded the finding of fact found to be perverse is hereby set aside.

Loss of anticipated profit was held by the Supreme Court in Odumosu v A.C.B. (1976) 11 SC. 55; and U.B.N. Plc v Scpok Nigeria Ltd (1998) 12 NWLR (Part 578) page 439 C.A. to be special damage which must not only be pleaded but also strictly proved. Applying the standard of proof to establish special damages expounded in Oshinjinrin v Elias (1970) 1 All N.L.R. 153 SC.; Imana v Robinson (1979) 3/4 SC. 1 at 23; Ijebu Ode Local Government v Adedeji Balogun and Co Ltd (1991) 1 NWLR (Part 166) page 136; and Shell Petroleum Development Co Ltd v Tiebo VII and others (1996) 4 NWLR (Part 445) 657 C.A. The respondent failed woefully to establish the loss of profit even which from his testimony was speculative, more especially the testimony that it was a cheque for the sum of N5,000 exhibit C that was to be paid over to second PW for the frozen fish busi-ness. With respect no evidence was led as to the account of profit being realised daily, weekly or monthly, how invest-ment of N5,000 catapulted to N50,000 was not established so the finding was perverse.

From the issue first encompassed by this Court from the above consideration respondent did not establish his case therefore was not entitled to the judgment of the trial court to have been given in his favour.

The second encompassed issue has been sub-summed by the first issue but should I have been wrong I will proceed to consider the issue on award of damages by the trial Judge whether the award was justifiable in law.

The claim of the respondent was for the sum of N30,000 as special and general damages for breach of contract as par-ticularised (supra). This was also repeated in the concluding reply of the respondent.

In Alhaji R.A. Salami (Trading under the business name of R.A. Salami and Sons v Savannah Bank of Nigeria Limited


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(1990) 2 NWLR (sic); (Part 130) page 106 C.A. by major-ity, it was held that:– “14 The refusal by a banker to pay a customer’s cheque who has a sufficient fund with the bank to cover the amount endorsed on the cheque amounts to a breach of contract for which the bank is liable in damages”.

As it was rightly held in R.A. Salami v Savannah Bank of Nigeria Ltd that the rule in Hadley v Baxendale (1854) 9 Exch. 341 is usually not applied to cases of banker to his cus-tomer as a cheque is a bill of exchange under section 2(1) Bills of Exchange Act Cap 35 Laws of the Federation of Ni-geria, 1990 the measure for award of damages is by virtue of section 57 of the Bills of Exchange Act that where a bill is dishonoured the measure of damages shall be deemed to be liquidated damages. The holder may recover from any party liable on the bill and the drawer who has been compelled to pay the bill may recover from acceptor and an endorser who has been compelled to pay the bill may recover from the ac-ceptor or from the drawer or from a prior endorser:– (a) the amount of the bill; (b) interest thereon from the time of presentment for

payment if the bill is payable on demand and from the maturity of the bill in any other case; and

(c) the expenses of noting or when protest is necessary and the protest has been extended, the expenses of protest.

This above was judicially interpreted in UBN Plc v Scpok Ni-geria Ltd (supra) that award and measure of damages under section 57 Bills of Exchange Act does not include award of general damages. What is permissible is liquidated damages.

With respect to the learned trial Judge, the damages of N30,000 and N50,000 making a cumulative sum of N80,000 was not classified as special and or general dam-ages despite the particulars of damages set out in the state-ment of claim were as classified above. Having included the sum of N5,000 particularised as general damages for breach of contract the learned Judge was in error as the common law principle of award of damages was inapplicable.


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The attitude of Appellate Court to award of damages by the trial court was well settled, that ordinarily and normally an appeal court will not interfere with such award unless:– (a) where the trial court has acted under a mistake of law; (b) where it has acted in disregard of principle; (c) where it has acted under a misapprehension of facts; (d) where it has taken into account irrelevant matters or failed

to take account of relevant matters; (e) where injustice would result if the appeal court does not

interfere; or (f) where the amount awarded is either ridiculously low or ri-

diculously high that it must have been a wholly erroneous estimate of the damages (see Union Bank of Nigeria Ltd v Odusote Bookstores Ltd (1995) 9 NWLR (Part 421) page 558 SC.; Ijebu Ode Local Government v Adedeji Balogun and Co Ltd (1991) 1 NWLR (Part 166) page 136 SC.; Nze-ribe v Dave Engineering Co Ltd (1994) 8 NWLR (Part 361) page 124 SC; Shell Petroleum Development Co Nigeria Ltd v Tiebo VII and others (1996) 4 NWLR (Part 445) page 657 C.A and Gurara Securities and Finance Ltd v TIC Ltd (1992) 2 NWLR (Part 589) page 29 C.A. referred to).

Applying the above to the instant appeal the learned trial Judge acted under mistake of law in awarding the sum of N50,000 which was not pleaded and the sum of N30,000 which was not established with credible, satisfactory and convincing evidence being special damages must be proved strictly (see Odumosu v A.C.B. (1976) 11 SC. 55). As the transactions were dishonouring of cheques presented on presentation by respondent to appellant being Bills of Ex-change within the meaning and intendment of the Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 under section 2, the award of damages recoverable are as set out in section 57 aforesaid, as the claim was based on breach of contract. Section 57 may not apply where the ac-tion is based on negligence which must be properly averred, pleaded and proved as decided by the Supreme Court in Zacheous Abiodun Koya v United Bank for Africa Ltd (1997) 1 NWLR (Part 481) page 251. The award of the sum of N80,000 was a mistake of law, when the amount was not claimed or pleaded in the statement of claim. The wrong


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approach calls in the circumstances of this case for an inter-ference by this Court as in addition the sum of N80,000 was ridiculously too high by taking into consideration that ex-hibit C issued to second PW was for the sum of N5,000 for the frozen fish business in addition the learned trial Judge took into consideration irrelevant issues of buying and sell-ing during Xmas frozen fish which was not pleaded before him as the profit was speculative. For the foregoing reasons the award of N80,000 as damages having been wrongly made affords this Court to interfere being on wrong princi-ple of law is hereby reversed and set aside leading to dis-missal of the said sum of N80,000. The appeal of the appel-lant succeeds, the judgment of Abeokuta High Court deliv-ered on 2 June, 1992, Coram O.O. Somolu, J is hereby set aside with an order of dismissal of respondent’s claims.

The appellant is entitled to the cost of this appeal which I fix for the High Court in the sum of N2,000 and in this Court N5,000 against the respondent if the cost awarded in the High Court has been paid a refund shall be made, forth-with to the payer of the cost by the receiver of the said cost. OLAGUNJU JCA: I have had the privilege of reading in ad-vance the judgment just delivered by my learned brother, Onalaja, JCA, and I agree with both his conclusion and the reasoning.

Particularly instructive is the highlight of the distinction between the measure of damages in claim generally that is based on the time-honoured principle in Hadley v Baxendale (1854) 9 Exch. 341, and liability of the bankers or others on cheques as bills of exchange which is based on the formula set out in section 57 of the Bills of Exchange Act Cap 35 of 1990 Edition of the Laws of Federation of Nigeria.

While the blur that obscures the difference in calculating damages may not represent a grey area of the law the fact that it is, more often than not, susceptible to a misapprehen-sion lends an added glitter to the illumination of the exposi-tion in the leading judgment as much as the positive contri-bution of the decisions in Salami and Sons v Savannah Bank


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of Nigeria Ltd (1990) 2 NWLR (Part 130) 106 and Union Bank of Nigeria Ltd v Scpok Nigeria Ltd (1998) 12 N.W.L.R. (Part 578) 439, upon which he drew for demon-stration.

The cross-application of the rules of pleading and evidence and coupling the blend as a searchlight of the correct evalua-tion of the evidence by the trial court is a mirror which cap-tured graphically where and how the learned trial Judge slipped into error.

For the reasons so elaborately stated in the leading judg-ment I too will allow the appeal, set aside the judgment of the court below and substitute therefore an order of dis-missal of the action of the plaintiff/respondent. I adopt his order for costs. ADEKEYE JCA: I read in draft the leading judgment just de-livered by my learned brother, M.O. Onalaja, JCA. I agree with his reasoning and conclusion that the award of a sum of N80,000 to the plaintiff/respondent by the learned trial Judge was based on a wrong principle of law, and was out of context with the claim before the court. An Appellate Court must interfere by way of reversing such decision. The award of N80,000 is therefore dismissed. I adopt the consequential orders including the award of costs as mine. Appeal allowed.

[1999] 9 N.B.L.R. (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)


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Nigeria Deposit Insurance Corporation v Nyamatai Enterprises Ltd and another

FAILED BANKS TRIBUNAL, ZONE II, LAGOS OPE-AGBE J Date of Judgment: 27 MAY, 1999 Suit No.: FBFMT/L/Z.II/56/96

Fair Hearing – Right of fair hearing – When not violated Judgment and Order – Arrest of – What applicant must show Practice and Procedure – Adjournment – Application for adjournment – Principles governing grant or refusal of Facts In the affidavit sworn in support, it was deposed in the main that a Counsel who was involved in the matter was involved in an accident on his way to Abuja and his briefcase was misplaced and that prevented the Chambers from ascertain-ing what transpired in Court. As a result they were not able to participate in the proceedings.

Opposing the application, applicant’s/respondent’s Counsel pointed out that the date Counsel travelled to Abuja and when his briefcase was retrieved were not stated in the affidavit in support, hence there was nothing to ground the application. Held – 1. A Court is not obliged to adjourn a case where a party to

an action before the Court who was duly informed of the date fixed for the hearing of his case in court fails to turn up or inform the court in advance of his inability to be present on the date fixed for the hearing.

2. Where a party to a suit has been accorded a reasonable op-portunity of being heard and in the manner prescribed un-der the law, and for no satisfactory explanation it fails or neglects to attend the sitting of the court, the party cannot thereafter be heard to complain of lack of fair hearing.

3. The application for arrest of judgment bothers on discre-tion, however such a discretion must be exercised judi-ciously and judicially.


Nigeria Deposit Insurance Corporation v. Nyamatai Enterprises Ltd 497

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4. Before the Tribunal can exercise the power to arrest the judgment before the judgment is delivered, sufficient materials must be placed before the Tribunal to enable it exercise its discretion in its favour. In the instant case the respondents/applicants have not shown exceptional circumstances why the judgment should be arrested.

Application struck out.


Nigerian Attorney-General of Anambra State v Nwobodo (1992) 7 NWLR (Part 256) 711 Kaduna Textiles Ltd v Umar (1994) 1 NWLR (Part 319) 143 Morakinyo v Adesoyero (1995) 7 NWLR (Part 409) 602

Counsel For the applicant/respondent: Mr Nasiru Tijani

Judgment OPE-AGBE J: This application brought by the first and sec-ond respondents/applicants under the inherent jurisdiction of the Tribunal is for an order vacating/revoking the proceed-ings that went on in the absence of the respon-dents/applicants and stopping any ruling in favour of the ap-plicant/respondent.

There is a 10 paragraph affidavit in support of the applica-tion. Annexed to it as exhibit A is photocopy of proposed amended statement of defence dated 15 June, 1997.

Alex Irene, Esquire learned Counsel in the Chambers of Okon Edem and Associates Solicitors to the respon-dents/applicants swore in the affidavit in support of the ap-plication that as a legal practitioner in the said chambers he is familiar with the facts of the case to wit:– (i) That the Counsel handling the matter Okon Edem

Esquire informed him that trial has not commenced in this matter.


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(ii) That the said Counsel travelled out of the country and asked Saka Azimasi to hold the brief in this case for him during his absence.

(iii) That unfortunately the said Azimasi was involved in an accident on his way to Abuja and his brief case containing the case file was not quickly found to en-able the chambers ascertain what transpired in court.

(iv) That the Solicitor Okon Edem in this matter just came back from Lome, Togo on Wednesday, 14 April and went to the Tribunal during his absence only to discover that the plaintiff had gone on with the case in his absence.

The above facts are the reasons why the parties – Counsel and the respondents/applicants – were absent from the Tri-bunal when the applicant/respondent witness led evidence in proof of the claim.

In moving the application, the learned Counsel for the re-spondents/applicants Okon Edem Esquire stated that the re-spondents/applicants have been diligent in this case and sub-mitted that it is the applicant/respondent who has been absent from the Tribunal and wants to get judgment on the two days applicant/respondent was present. Learned Counsel repeated the facts deposed to by Alex Irene earlier reproduced in this ruling but gave dates which were absent in the depositions and urged that judgment should not be delivered but that the witness should be recalled for cross-examination.

In his response the learned Counsel for the appli-cant/respondent submitted that in an application of this na-ture it is the conduct of the respondents/applicants that is relevant since they are the ones asking for the discretion of the Court. That all the submissions touching on the conduct of the applicant/respondent in this matter are irrelevant and go to no issue. That the date Mr Azimasi travelled to Abuja is not stated in paragraph 4 of the affidavit in support and so the submissions touching on the date is irrelevant, that since the facts contained in paragraph 4 of the affidavit are within the peculiar knowledge of Mr Azimasi he ought to have de-posed to the affidavit, that it is not stated when Mr Azimasi


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was involved in the accident and when his brief case was retrieved etc; that if paragraph 4 (supra) is discountenanced there will be nothing in the other paragraphs.

In order to be fair to both sides on the issue of attendance in the Tribunal before the applicant/respondent witness led evi-dence in proof of the claim, I intend to have recourse to the record of proceedings in the case file as I am entitled to do.

The application for recovery of debt in this suit was filed into this Tribunal on 2 September, 1996 as the cashier’s stamp indicates. The second respondent/applicant Chief Eniang E. Offiong entered appearance for the first and sec-ond respondents/applicants on 15 November, 1996 on pro-test and they filed their statement of defence (reply) on 9 December, 1996. An application to amend the respon-dents/applicants’ statement of defence (reply) was granted on 25 June, 1997.

With regard to appearances in the Tribunal on 18 March, 1997 the applicant/respondent’s representative Mr J. Etim was present in the Tribunal. The respondents/applicants were absent. Mr Nasiru Tijani appeared for the appli-cant/respondent. The case was adjourned till 8 April, 1997 for trial. On 8 April, 1997 the applicant/respondent Mr J.O. Etim was present in the Tribunal. The respon-dents/applicants were absent. Mr N. Tijani appeared for ap-plicant/respondent while Mr O. Edem appeared for the re-spondents/applicant. In view of part-heard matters trial could not open and the case was adjourned till 23 April, 1997. On 23 April, 1997 the parties were absent from the Tribunal. Mr Nasiru Tijani appeared for the applicant/ re-spondent while Messrs Okon Edem and Associates for the respondents/applicant wrote asking for adjournment because Mr Okon Edem was appearing at the Court of Appeal, Enugu. Mr N. Tijani had no objection and the case was ad-journed till 20 May, 1997 for trial.

On 20 May, 1997 the parties were absent from the Tribu-nal. Mr A. Omowole appeared for applicant/respondent. Mr O. Edem appeared for respondents/applicants. Mr Omowole


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applied for adjournment because the applicant’s witness who was to come from Calabar failed to show up.

Mr Edem did not object and the case was adjourned till 25 June, 1997 for trial.

On 25 June, 1997 the parties were absent. Mr Okon Edem appeared for respondents/ applicants. There was no representa-tion for the applicant/respondent. Mr Okon Edem moved the application for amendment of respondents/applicants’ state-ment of defence. The case was adjourned till 28 July, 1997 for trial. On 28 July, 1997 the parties were absent. Mr Okon Edem appeared for respondents/applicants. The applicant/respondent was unrepresented, the matter was adjourned till 29 Septem-ber, 1997 with N1,000 costs awarded in favour of the respon-dents/applicants against the applicant/respondent. There fol-lowed four adjournments 29 September, 1997, 5 November, 1997, 29 January, 1998 and 16 March, 1998 due to power fail-ure and public holiday.

On 15 June, 1998 the parties were absent. Mr N. Tijani ap-peared for the applicant/ respondent while Mr Okon Edem appeared for the respondents/applicants. Mr Tijani applied for hearing date. The case was adjourned till 27 July, 1998 for trial. There followed three adjournments 27 July, 1998, 29 October, 1998 and 15 December, 1998 due to power failure. On 16 February, 1999 the applicant/respondent’s representative Mr Alex Uzowulu was present. The respon-dents/applicant were absent so also was their Counsel. The applicant/respondent opened and closed their case on that date. The case was adjourned till 11 March, 1999 for address and on that date the parties were absent. Mr Tijani who represented the applicant/respondent moved an application to substitute the name of the applicant/respondent. The motion on notice was shown to have been served on the respondents/applicants’ Counsel who endorsed the copy of the motion paper but still refused, neglected or failed to appear in the Tribunal. The learned Counsel for the applicant/respondent also addressed the Tribunal at the conclusion of which the case was adjourned for judgment till 16 April, 1999. It was on that 16 April, 1999 that the motion to arrest the judgment was


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served on the applicant/respondent’s Counsel in the Tribunal and arguments on the motion was adjourned till 5 May, 1999.

I have earlier on in this ruling set out the reasons for the absence of the learned Counsel from the Tribunal on 16 Feb-ruary, 1999 when the applicant/respondent opened its case, closed it and on subsequent adjourned date addressed the Tribunal after moving the application for substitution of ap-plicant’s name which motion was received and signed for by the Secretary to learned Counsel for the respon-dents/applicants one Ms Mfon Mandu.

Now, a court is not obliged to adjourn a case where a party to an action before the court who was duly informed of the date fixed for the hearing of his case in court fails to turn up or inform the court in advance of his inability to be present on the date fixed for the hearing. (See the case of the Attor-ney-General of Anambra State v Nwobodo (1992) 7 NWLR (Part 256) 711 at page 725 G–H.)

As rightly submitted by the learned Counsel for the appli-cant/respondent the date Mr Azimasi was involved in an ac-cident on his way to Abuja as deposed to in paragraph 4 of the affidavit in support is not stated in the paragraph but was given in the submissions of the learned Counsel for the re-spondents/applicants. It is not stated in the affidavit in sup-port the date Okon Edem Esquire handling the matter trav-elled out of the country presumably to Lome, Togo but it is stated that Counsel came back on 14 April. It is not stated which year. The fact that this case was filed into the Tribu-nal on 2 September, 1996 the 14 April deposed to could be 14 April, 1997 or 14 April, 1998 or 14 April, 1999.

Assuming the date was 14 April, 1999, I am of the humble view that Mr Azimasi should have sworn to the affidavit in support himself since the issue of the accident and his travel-ling to Abuja touches on the truth or otherwise of the inci-dent. The circumstances surrounding the accident, the date of his travel, what happened to him and his brief case after the accident and how the chambers came to hear about the acci-dent are facts within his peculiar knowledge. Mr Alex Irene the deponent to the affidavit in support could not give these


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details. It is not known whether Mr Azimasi travelled by pub-lic transport or private car. It is not stated in the affidavit in support that the accident was as a result of attack by armed robbers on the vehicle the said Mr Azimasi was travelling in.

It is also not quite clear why Mr Azimasi should take along to Abuja a case file for a case holding in Lagos, these are is-sues Mr Azimasi himself would be in a better position to ex-plain in an affidavit in order to give credibility to the reasons for his absence in the Tribunal. Mr Alex Irene has failed to fill up this lacuna in the reasons for the absence of Mr Azi-masi from the Tribunal on the dates AW1 gave evidence and on the date address was made. Where a party to a suit has been accorded a reasonable opportunity of being heard and in the manner prescribed under the law, and for no satisfactory explanation it fails or neglects to attend the sitting of the court, the party cannot thereafter be heard to complain of lack of fair hearing. (See the case of Kaduna Textiles Ltd v Alhaji Isa Umar (1994) 1 NWLR (Part 319) 143 at 159–160 F–A.)

The application of the respondents/applicant bothers on discretion, however such a discretion must be exercised ju-diciously and judicially. (See the case of Morakinyo and another v Adesoyero and another (1995) 7 NWLR (Part 409) 602 at 622 C–D.)

I am in agreement with the submissions of the learned Counsel for the respondents/applicants that this Tribunal can exercise the power to arrest this judgment before the judg-ment is delivered but sufficient materials must be placed be-fore the Tribunal to enable it exercise its discretion in its fa-vour. I am unable to find any defence to the claim that the first respondent/applicant obtained facility from the appli-cant/respondent which it has not repaid. The defence is that the proceeds of sale of the respondents/applicants’ property at Calabar was not properly accounted for and that it was sold at under value. This defence will be considered in the judgment.

The respondents/applicants have not shown exceptional circumstances why the judgment should be arrested.

The application fails and is struck out.

[1999] 9 N.B.L.R. (COURT OF APPEAL, LAGOS DIVISION)

Union Bank of Nigeria Ltd v. Alhaji Mufu Oki and another 503

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Union Bank of Nigeria Ltd v Alhaji Mufu Oki and another

COURT OF APPEAL, LAGOS DIVISION IGE, ADEREMI, NZEAKO JJCA Date of Judgment: 27 MAY, 1999 Suit No.: CA/L/123/91

Banking – Bank loan/advances – Repayment of – When due – Whether can be implied – Need for either notice or de-mand to issue – Applicable principles

Banking – Banker and customer relationship – Right of ac-tion for payment of overdraft – When arises – Underlying considerations

Banking – Money deposited in the bank – Right of customer to recover same – When crystallises – What customer must do – When he can sue

Facts Sometimes in 1981, the appellant granted two loans to the respondents. Specifically, the two loans of N2,000 were granted on 14 July, 1981 and 6 October, 1981 respectively. By 1987, the appellant demanded for the repayment of the loan and when the respondent failed to repay their debt the appellant filed an action claiming the same. The respondents however raised a preliminary objection to the hearing and determination of the suit on the ground that the action was statute-barred by virtue of the provision of section 8(1)(a) of the Limitation Law of Lagos State. The trial Court upheld the preliminary objection and dismissed the action as being statute-barred.

Dissatisfied, the appellant appealed to the Court of Appeal.

Held – 1. In banking law, it is when the bank has made a demand

for payment of the sum owed it by the customer, and the customer has failed to pay up, that a cause of action for the recovery of the amount can be said to have arisen



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from the date of the failure to effect payment. In the in-stant case, the learned trial Judge was wrong to hold that the cause of action arose when the bank granted the loans to the customer in 1981. The cause of action arose in 1987 when the bank demanded for the payment of the money owed by the customer and the customer in turn refused to pay back.

2. It is unheard of in banking transactions that a borrower should be liable or expected to pay back on the very day he receives the loan. The time for payment is either stipu-lated in an agreement or upon demand by the creditor.

3. The law is that a customer cannot sue his bank for money deposited with it until a demand is made.

4. In the relationship between a banker and his customer it is an implied term that there should be no right of action for the repayment of an overdraft until there has been a demand or notice given. In other words, a cause of ac-tion on an unpaid overdraft is not deemed to accrue where no specific date for payment is agreed upon until there has been a demand made or notice given.

Appeal allowed.


Nigerian Adimora v Ajufo (1988) 3 NWLR (Part 80) 1 Angyu v Malami (1992) 9 NWLR (Part 264) 242 Apari v Hose (1999) 5 NWLR (Part 604) 541 Attorney-General of Bendel State v Attorney-General of the Federation (1982) 3 NCLR 1 Eboigbe v NNPC (1994) 5 NWLR (Part 347) 649 Egbe v Adefarasin (1987) 1 NWLR (Part 47) 1 Ekeogu v Aliri (1991) 3 NWLR (Part 179) 258 Holman Bros. (Nigeria) Ltd v Kigo (Nigeria) Ltd (1980) 8–11 SC 43



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Ishola v S.G.B. (Nigeria) Ltd (1997) 2 NWLR (Part 488) 405 Obiefuna v Okoye (1961) All NLR 357 Odiase v Agho (1972) 1 ANLR (Part 1) 170 Odubeko v Fowler (1993) 7 NWLR (Part 308) 637 Ogbimi v Ololo (1993) 7 NWLR (Part 304) 128 UBA Ltd v Michael O.Abimbolu and Co (1995) 9 NWLR (Part 419) 371 University of Lagos v Olaniyan (1985) 1 NWLR (Part 1) 143 Yusuf v Co-op. Bank Ltd (1994) 7 NWLR (Part 359) 676

Foreign Biss v Lambeth Health Authority (1978) 1 WLR 382 Bradford Old Bank Ltd v Sutcliffe (1918) 2 KB 833 Cartledge v Jopling and Sons Ltd (1963) 1 AER 341 Walton v Mascall 13 M and W 458 Young v Bristol Aeroplane Co (1944) KB 718

Nigerian statute referred to in the judgment Limitation Law Cap 70 Laws of Lagos, 1973, section 8(1)(a)

Books referred to in the judgment Chitty on Contracts (24ed) page 811, paragraph 1105 Paget’s Law of Banking (8ed) page 82

Judgment IGE JCA: (Delivering the lead judgment) This is an appeal against the Ruling of the Lagos High Court delivered on 19 January, 1990 in Suit No. LD/529/88. In the court below the plaintiff/appellant a Bank claimed against the defen-dants/respondents jointly and severally as follows:– “(1) The plaintiffs claim against the defendants jointly and sev-

erally for the sum of N17,123.44k (Seventeen Thousand One Hundred and Twenty-three Naira Forty-four kobo) as at 9 December, 1987 being overdraft money including in-terest lent to the defendants at the request of the defendants in the normal course of the plaintiff’s business as Bankers,


Ige JCA


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money which the defendants have refused/neglected to pay despite repeated demands by the plaintiffs.

(2) The plaintiff also claims from the defendants jointly and severally interest on the said N17,123,44k at the rate of 21½ % per annum from 9 December, to 31 December, 1987 and at the rate of 19½% from 1 January, 1988 until the final liquidation of the debt; and

(3) The cost of this suit.”

From the above particulars, it is clear that the amount claimed by the plaintiff arose out of overdraft loan facilities granted to the defendants on two occasions in July, and Oc-tober, 1981. When by 1987 the defendants refused to pay the outstanding balance of N17,123.44k with interest upon demand by the plaintiff, the latter decided to take a court action to recover its money.

Before the matter proceeded to hearing on 13 March, 1989, Counsel for defendants raised a preliminary objection to the action on the ground that it is statute barred. He ar-gued that the total amount claimed by plaintiff as loans granted in 1981 are debts which are statute barred under the Statute of Limitation of Lagos State Laws Cap 70, section 8(1)(a) refers. According to him the writ of summons was filed six months after the expiration of the 6 years allowed under the law. He urged the court to dismiss the action.

Counsel for the plaintiff in his own reply argued that the objection was vague and should be dismissed. He maintained that the action was not statute barred as the customer under the grant of an overdraft facility takes up his offer at any time he wishes and not necessarily on the date the offer was made. The defence having failed to prove the time when the action accrued according to the rules laid down by the Supreme Court in the case of Adimora v Ajufo (1988) 3 NWLR (Part 80) 1 at page 17 the objection should be dismissed.

In a considered ruling by the learned trial Judge delivered on 19 January, 1990, the Judge upheld the objection and dismissed the action of the plaintiff as being statute barred. The plaintiff is dissatisfied with this ruling and has appealed against it to this Court.


Ige JCA


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The appellant filed three grounds of appeal and formulated four issues in his brief of argument. The following are the issues originally formulated by the appellant:– “(i) When does a cause of action arise? (ii) When does time start to run in a cause of action? (iii) Whether the learned trial Judge was right when he held that

the cause of action arose on the day of granting overdraft facility loan.

(iv) Is it essential to reply to a preliminary objection based on law by an affidavit or is it enough to reply to such orally by quoting the relevant authority in law?”

The respondents filed no brief even though they were served with all the processes in this appeal including the appellant’s brief. Failure of the respondents to file a brief does not mean that the appeal succeeds automatically. Neither does it give the appellant an undue advantage because the respondent already has the Ruling of the court below in his favour. That Ruling remains valid until it is proved wrong by the Court of Appeal. (See the case of Odiase v Agho (1972) 1 ANLR (Part 1) 170.)

The appeal has to be considered on its own merit upon the brief filed by the appellant. When the appeal came up for hearing the appellant withdrew Issues 2 and 3 leaving only Issues 1 and 4 to be argued. Issues 2 and 3 were then struck out by this Court. It seems to me that in his anxiety to keep to the rules of Court by not having more issues than grounds of appeal, Counsel for the appellant has thrown the baby away with the bath water. He limited himself to two issues ie 1 and 4 instead of withdrawing just one issue ie Issue 4 and leaving Issues 1, 2 and 3 as they are. I will leave the situation as it is since Counsel’s arguments on the issues have been lumped together in his brief of argument. Issues 2 and 3 which are relevant to the appeal – are covered by the grounds of appeal filed in the notice of appeal. Really and truly the crucial issue involved in this appeal is whether or not the learned trial Judge was right when she held that the cause of action arose on the day of granting the overdraft facility loans to the respondent.


Ige JCA


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First of all what is a cause of action? The Supreme Court in the case of Egbe v Adefarasin (1987) 1 NWLR (Part 47) 1 has held that a cause of action is the fact or facts which establish or give rise to a right of action. It is the factual situation which gives a person a right to judicial relief. (See also the case of Yusuf v Co-operative Bank Ltd (1994) 7 NWLR (Part 359) 676 at 692.)

From the facts of this case as stated in the plain-tiff/appellant’s statement of claim, it is obvious that the rela-tionship between the parties is that of a Banker and its cus-tomer and also that of Debtor and Creditor. It is therefore when the Bank has made a demand for payment of the sum owed it by the customer and the customer has failed to pay up, then a cause of action for the recovery of the amount can be said to have arisen from the date of the failure to effect payment.

In the instant case the evidence showed that the two over-draft facility loans were granted in the year 1981. In 1987 when the plaintiff/Bank demanded for payment of the out-standing balance of N17,123.44k from the defen-dant/respondents, they failed to meet the demand hence this action. In other words a cause of action for recovery of a debt by the customer just as in this case accrues only when a person in possession of money or goods has refused to sur-render the money or goods after demand has been made for its payment or delivery.

In the instant case the learned trial Judge was wrong to hold that the cause of action arose when the plaintiff granted the loans to the defendants/respondents in 1981. The cause of action arose in this case in 1987 when the plain-tiff/appellant demanded for the payment of the money owed by the respondents and the respondents in turn refused to pay back. It is unheard of in banking transactions that a bor-rower will be liable or expected to pay back a loan on the very day he receives the loan. The time for payment is either stipulated in an agreement or upon demand by the creditor. (See the cases of Ishola v S.G.B. (Nigeria) Ltd (1997) 2 NWLR (Part 488) 405 at 422; and Angyu v Malami (1992) 9


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NWLR (Part 264) 242 at 252.) In this case the factual situa-tion on which the plaintiff relies to support its claim is rec-ognised by law as giving rise to a substantive right, capable of being claimed or enforced against the respondents (see the cases of Adimora v Ajufo (1988) 3 NWLR (Part 80) 1; and Ogbimi v Ololo (1993) 7 NWLR (Part 304) 128).

Now when does time begin to run? Or when is a cause of action statute barred? A cause of action is said to be statute barred when no proceedings can be brought in respect of it because the period laid down by the Limitation Act had lapsed. Time begins to run when there is in existence, a per-son who can sue and another who can be sued and all the facts have happened which are material to be proved to enti-tle the plaintiff to succeed.

In this case time begins to run from December, 1987 when the plaintiff’s cause of action accrued. The learned trial Judge rightly held in her judgment that “the accrual of a cause of action is the event whereby a cause of action be-comes complete so that the aggrieved party can begin and maintain his cause of action”. That was a good and correct holding but unfortunately the learned trial Judge made a U turn in the last paragraph of her judgment when she held that the cause of action in this case is the granting of loan to de-fendants at their request in October, 1981. As at October, 1981 there was no right or cause of action to enforce by the plaintiff against the respondents. No aggrieved person yet.

Section 8(1)(a) of the Limitation Law of Lagos State pre-scribes for the actions founded on a simple contract for a pe-riod of 6 years from the date on which the cause of action accrues. When an action is statute barred, a plaintiff who might otherwise have had a cause of action loses the right to enforce the cause of action by judicial process because the period of time laid down by the Limitation Law for institut-ing such an action has elapsed (see the case of Odubeko v Fowler (1993) 7 NWLR (Part 308) 637 and Ekeogu v Aliri (1991) 8 NWLR (Part 179) 258). Cause of action accrues on the date on which the incident giving rise to the cause of


Ige JCA


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action occurs. (See Eboigbe v NNPC and others (1994) 5 NWLR (Part 347) 649.)

Applying the principle in Fred Egbe’s case (supra) to the facts as disclosed in the writ and statement of claim in this case and comparing that date on which the wrong was com-mitted with the date the writ was filed; if the time of the writ is beyond the period allowed by the Statute of Limitation then the action is statute barred.

In the instant case, the wrong was committed in Decem-ber, 1987 and the writ was filed on 17 March, 1988 just a few months after the cause of action arose. The statement of claim was also filed in 1988 and amended in January, 1989. It is my candid view that the learned trial Judge has miscon-strued the period time began to run in this case and has therefore jumped to a wrong conclusion that the plain-tiff/appellant’s action is statute barred and therefore unen-forceable. Plaintiff’s action is validly enforceable.

This appeal therefore succeeds and is allowed. The Ruling delivered by the learned trial Judge of Lagos State High Court in Suit No. LD/529/88 on 19 January, 1990 is hereby set aside. In its place an order for a retrial of the action on merit is hereby made. Case is sent back to the Lagos State High Court for a retrial on merit to be heard by another Judge of Lagos High Court. Respondents to pay N3,000 costs to the appellants. ADEREMI JCA: I have read in advance the leading judg-ment just read by my learned brother, Ige, JCA. I agree in law, with the conclusions reached.

The resolution of this case revolves round two narrow but important issues ie (1) when did the cause of action arise in a banker/customer transaction as in the instant case and (2) whether this action is caught by the provisions of Statute of Limitation. The simple facts of the case are that sometimes in 1981 the plaintiff/appellant granted two loans to the defen-dants/respondents. Specifically, the two loans of N8,000 and N2,000 were granted on 14 July, 1981 and 6 October, 1981 respectively. The banker (plaintiff/appellant) demanded for the payment of the loan and when the defendants/respondents


Aderemi JCA


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failed to pay their debt the plaintiff/appellant took out a writ on the 17 March, 1988 claiming the said loan. To the prelimi-nary objection taken by the respondents inviting the court to dismiss the action for the reason of being statute barred, the court below in upholding it said:–

“The cause of action in this case is the granting of loan to defen-dants at their request. plaintiff admitted granting the loan as at 6 October, 1981. In the absence of any contradicting pleadings to the defendants counter-affidavit l find cause of action therefore arose on 6 October, 1981. I agree with the defence Counsel that any ac-tion after 6 October, 1981 is statute-barred and therefore unen-forceable. The plaintiff’s action is therefore dismissed.”

To my mind, the philosophy behind the application of Stat-ute of Limitation is that barring of actions by effluxion of time will encourage and secure reasonable diligence in liti-gation and to protect defendants from stale claims when the evidence which might have answered them has perished. I find support for this statement in the dictum of Lord Pearce in Cartledge and others v Jopling and Sons Ltd (1963) 1 A.E.R. 341 or (1963) A.C. 758 at 782. And perhaps the ra-tionale for that piece of legislation is to give peace to a de-fendant after the lapse of a given period. (See Biss v Lam-beth Health Authority (1978) 1 W.L.R. 382.) Eternal vigi-lance is the price of freedom.

The all important question to be answered here is when did the cause of action accrue. I shall now begin to examine the case law on this point. In UBA Ltd v Michael O Abimbolu and Co (1995) 9 NWLR (Part 419) 371 a decision of the Lagos Division of the Court of Appeal Mohammed, JCA in a unanimous decision of that court said at page 381:–

“The question is when does the statute run in respect of an ad-vance or a loan made to a customer? The authorities are agreed that a customer cannot sue his bank for money deposited with it until a demand is made (see Joachimson v Swiss Bank Corpora-tion (1925) 3 KB 110; Yusuf v Co-operative Bank Ltd (1994) 7 NWLR (Part 359) 676). Some reasons are given for this which I need not go into here. But such a demand does not seem necessary in law when a bank seeks to recover its loan unless there is an


Aderemi JCA


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agreement to that effect, although in practice such demand is usu-ally made. In Walton v Mascall 13 M and W 458 Parke said:–

‘It is clear that a request for the payment of a debt is quite immaterial unless the parties to the contract have stipulated that it shall be made; if they have not, the law requires no notice or request, but the debtor is bound to find out the creditor and pay him the debt when due.’”

For the purpose of the Statute of Limitation, there is author-ity that time begins to run from the date of an advance even when the advance is guaranteed (see Paget’s Law of Bank-ing (8ed) page 82) and I quote:–

“There is the authority of Parr’s Banking Co Ltd v Yates (1898) 2 Q.B. 460, that the statute runs from the date of each advance even when the advances are guaranteed.”

The principle enunciated by A.L. Smith, LJ in the Parr’s Banking Co Ltd was slightly amended in Bradford Old Bank Ltd v Sutcliffe (1918) 2 KB 833 as regards the guarantor. This is to the effect that as guarantees usually contain a clause demanding payment, the limitation period will not begin to run against the guarantor or surety until after de-mand is made. But that will not affect the person guaranteed who could rely on the statute of limitation from the time the advance or the last of the advances was made.

In Chitty on Contracts (24ed) page 811, paragraph 1705 the position of the law is stated thus:–

“An overdraft is a loan by the bank to the customer and in general it seems that no demand is necessary and that time runs against the banker in respect of each advance from the time when it is made. Thus a bank cannot normally recover an overdraft that has lain dormant for more than 6 years.”

This is in line with the position of the law as painted by the decided cases reviewed (supra). But the Kaduna Division of the Court of Appeal in Angyu and another v Malarni and another (1992) 9 NWLR (Part 264) 242 seems to take the opposite view when it said that it is an implied term in the relationship between a banker and his customer that there should be no right of action for the repayment of an over-draft until there has been a demand made or notice given. So until a demand for payment of the overdraft is made and the


Nzeako JCA


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customer fails to pay there is no cause for the parties to go to court. I pause to say something on the binding nature of for-eign decisions that I have referred to above. The position that Nigerian Courts now take with regards to foreign deci-sions cited before them is that they are no longer binding on them. They may however carry with them some persuasive force; they are not more than that, (see (1) Attorney-General of Bendel State v Attorney-General of the Federation and others (1981) 10 SC. 1 and (2) Holman Bros (Nigeria) Ltd v Kigo (Nigeria) Ltd and another (1980) 8–11 SC. 43.)

As I have said above the two decisions of this Court on when a cause of action accrued in banking matters are con-flicting. This Court in Apari v Hose and others (1999) 5 NWLR (Part 604) 541, said that under the rule of stare de-cisis this Court would be bound by its previous decisions the exception is under the rules in Young v Bristol Aeroplane Co (1944) KB 718 a foreign decision considered to be very per-suasive. In the Young case the Court of Appeal (England) said that it would be bound to follow previous decisions of its own as well as those of courts of co-ordinate jurisdiction with three exceptions:– (a) it may choose between two con-flicting decisions of its own; (b) it must refuse to follow a decision of its own which though not expressly overruled, is inconsistent with a decision of the House of Lords and (c) it is not bound to follow a decision of its own given per incu-riam. In the hierarchy of courts in Nigeria, the Supreme Court is the highest. Under the doctrine of stare decisis all courts below the Supreme Court must always apply the law as laid down by the highest court of the land to the peculiar facts of the cases before them; that is the practical connota-tion of the doctrine of stare decisis (see Eso, JSC in Univer-sity of Lagos and others v Olaniyan (1985) 1 SC 295; (1985) 1 NWLR (Part 1) 143).

As I have said above, I have had the privilege of reading in advance, the lead judgment of my learned brother, Ige, JCA in which she held that a demand notice is a pre-requisite for a banker to sue for overdraft and that accrual time of action is when the demand notice is made. She cited in support the


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Supreme Court decision in Alhaji Aminu Ishola v Societe Generale Bank (Nigeria) Ltd (1997) 2 NWLR (Part 488) 405 and the Court of Appeal decision in Angyu v Malami (supra). In the Ishola case the Supreme Court per Iguh, JSC said at page 422:–

“It is also an implied term in the relationship between a banker and his customer that there should be no right of action for the re-payment of an overdraft until there has been a demand or notice given see Angyu v Malami (1992) 9 NWLR (Part 264) 242 at 252. The cause of action does not arise until there has been a demand made or notice given. When therefore there is no specific date agreed upon for the repayment of an overdraft, as in the present case, a demand should be made or notice given. In other words, a cause of action on an unpaid overdraft is not deemed to accrue where no specific date for payment is agreed upon until there has been a demand made or notice given.”

The position of the law in Nigeria today is as lucidly stated by my learned brother in the lead judgment. It must be al-lowed. Before I end, I need to say that the decision of the Lagos Division of this Court was given in 1995 some two years before the Supreme Court decision in the Ishola case was delivered. The Ishola case has a binding force on all courts from the time of its delivery of its judgment.

In conclusion, I agree with my learned brother, Ige, JCA that on the Supreme Court authority in the Ishola case, this appeal must be allowed and I also allow it and abide by all other consequential orders made by my learned brother. NZEAKO JCA: The reasoning and decision reached in the lead judgment by my learned brother, Ige, JCA accord with mine.

I only wish to say a few words concerning the important point of law as to how to determine whether an action is statute-barred. An action can be said to be statute-barred if the writ of summons is issued beyond the period allowed by the limitation law applicable to the particular action. (See Egbe v Justice Adefarasin (1987) 1 NWLR (Part 47) 1 at page 20 and Obiefuna v Okoye (1961) All NLR 357.)

It is the law that the period of limitation applicable in a case is determinable by looking at the writ and statement of


Nzeako JCA


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claim which alleges when the wrong suffered by the plaintiff was committed and placing it side by side with the date on which the writ was issued. If the writ was issued beyond the time allowed by the applicable limitation law, then the ac-tion can be said to be statute-barred. Egbe v Justice Ade-farasin (supra). In the present case the date set out in the writ and statement of claim was not the date on which the wrong giving rise to the action was committed. That was not the date the cause of action arose. The date given was when the money was borrowed, which later gave rise to the debt being claimed in the suit subject matter of this appeal.

The wrong complained of in an action between a lender and borrower in an action for debt is, in my view, the failure and/or refusal by the borrower to pay on the due date. The due date depends on the agreement between the parties.

It was therefore not correct for the lower Court in this case to have calculated the limitation period from the date the borrower borrowed the money. It was not the claim of the plaintiff that the sum borrowed was due for payment on the date it was borrowed. The plaintiff/appellant’s suit was therefore wrongly dismissed.

It is for this and other reasons set out in the judgment of my learned brother, Ige, JCA, I also allow the appeal and set aside the decision of Fafiade, J delivered on 19 January, 1994 dismissing the plaintiff/appellant’s suit.

I abide by the orders made in the lead judgment including the order as to costs. Appeal allowed.



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Savannah Bank of Nigeria Plc v Oladipo Opanubi COURT OF APPEAL, LAGOS DIVISION OGUNTADE, ADEREMI, NZEAKO JJCA Date of Judgment: 31 MAY, 1999 Suit No.: CA/L/10/98

Central Bank of Nigeria – Powers of – Manner of exercising its statutory powers – How established – Whether a matter of judicial notice or evidence

Facts The respondent (hereinafter called “the plaintiff”) had brought a Suit No. LD/4520/95 against the appellant (here-inafter called the defendant) claiming:– “1. The sum of N4,750,000 being the plaintiff’s fee for recover-

ing the sum of N47,500,000 for the defendant from Icon Ltd (Merchant Bankers) on the instructions of the defendant.

2. ALTERNATIVELY, the sum of N47.5 million from Icon Ltd (Merchant Bankers) on the instructions of the defendant.

3. Interest at the rate of 21% per annum from the 23 August, 1995 until the final liquidation of the judgment debt.”

The parties filed and exchanged pleadings after which the suit was tried by Alabi, J. On 15 November, 1996, judgment was given in favour of the plaintiff. The defendant was dis-satisfied with the judgment and has brought this appeal against it.

The plaintiff is a legal practitioner and the defendant a banker. The defendant was owed the sum of N50 Million (excluding interest) by a merchant banker, Icon Ltd. The de-fendant, by letter dated 17 April, 1994 instructed the plain-tiff to help it recover the debt. The plaintiff took the assign-ment on hand, and after some initial false steps, ultimately obtained from the Federal High Court Lagos, a judgment for the sum of N99,394,689.82 and interest thereon at the rate of 21%. At a stage after the judgment, Icon Ltd paid N2.5 Million. The defendant paid the plaintiff the sum of N250,000 representing 10% of the part payment made by Icon Ltd. This was plaintiff’s professional fees pro rata.


Savannah Bank of Nigeria Plc v. Oladipo Opanubi 517

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Problem however arose when sometime later, Icon Ltd paid a further sum of N47.5 Million. The evidence would appear to suggest that the CBN as the supervising authority in the banking industry debited the account of Icon Ltd with the CBN, and correspondingly credited the account of the defendant with the said N47.5 Million. This was after the plaintiff had obtained judgment for the defendant against Icon Ltd. The plaintiff put up a claim for N4.75 Million to the defendant as his 10% professional fee on the N47.5 Mil-lion by Icon Ltd. The defendant refused to honour the claim contending that the payment of N47.5 Million by Icon was as a result of the intervention of the CBN and not the result of any action by the plaintiff. It needs be said here that the letter of instructions to the plaintiff from the defendant had been specific that the plaintiff would only be paid a percent-age of the amount recovered by him. The crucial question before the Court was who recovered the N47.5 Million?

Held – 1. The Central Bank of Nigeria exercises supervisory func-

tions over all licensed banks and financial institutions. The origin of its powers are statutory being derived from the Central Bank Act, 1991, and Banks and Other Finan-cial Institutions Decree (“BOFID”) of 1991. The courts have judicial notice of these statutes.

2. The manner and circumstances the Central Bank of Ni-geria exercises its statutory powers vis-à-vis banks and institutions under it is a matter of day to day policy and activities of the Central Bank of Nigeria. They are not spelt out in the statutes. They are not such matters as the courts can take judicial notice of under the Evidence Act. They are a matter of evidence. In the instant case, the appellant ought to have led evidence as to what cir-cumstances led the Central Bank of Nigeria to credit it with money from the account of ICON Ltd in part set-tlement of debts owed the appellant.

Appeal dismissed.



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Nigerian Saraki v Societe Generale Bank (1995) 1 NWLR (Part 371) 325

Nigerian statutes referred to in the judgment Banks and Other Financial Institutions Decree No. 25 of 1991, sections 1, 38 Central Bank of Nigeria Act, 1991, section 2 Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, sections 19, 74(1)(a), (b) and 137(1), (2)

Counsel For the appellant: J. Okoh

Judgment OGUNTADE JCA: (Delivering the lead judgment) The re-spondent (hereinafter called “the plaintiff”) had brought a Suit No. LD/4520/95 against the appellant (hereinafter called “the defendant”) claiming:– “1. The sum of N4,750,000 being the plaintiff’s fee for recover-

ing the sum of N47,500,000 for the defendant from Icon Ltd (Merchant Bankers) on the instructions of the defendant.

2. ALTERNATIVELY, the sum of N47.5 million from Icon Ltd (Merchant Bankers) on the instructions of the defendant.

3. Interest at the rate of 21% per annum from the 23 August, 1995 until the final liquidation of the judgment debt.”

The parties filed and exchanged pleadings after which the suit was tried by Alabi, J. On 15 November, 1996, judgment was given in favour of the plaintiff. The defendant was dis-satisfied with the judgment and has brought this appeal against it. In the appellant’s brief filed, the issues for deter-mination were identified thus:– “1. Whether the learned trial Judge was right in finding that

the Central Bank of Nigeria had notice of the action between the appellant and Icon Ltd (Merchant Bankers)


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and consequently paid the sum of N47,500,000 to the appel-lant upon the instruction of Icon Ltd (Merchant Bankers) (Grounds 1 and 2).

2. Whether the learned trial Judge was right in his application of section 137 of the Evidence Act in holding that the re-spondent having established efforts made by him to recover the money, the onus ‘Shifted’ on the appellant to establish that payment was made by the Central Bank of Nigeria (‘CBN’) without the efforts of the respondent (Ground 3).

3. Whether the learned trial Judge was right in holding that the offers made by the appellant to the respondent as ‘compen-sation’ amount to admission of liability having regards to the facts and circumstances of the case. (Ground 4).”

The above issues formulated by the appellant, when viewed in a proper sense do not amount to issues at all. A proper is-sue for determination in an appeal is such that, if the issue is resolved in favour of the appellant, it may lead to reversal of the decision appealed against or substantial parts of compo-nent elements of the decision. When the facts leading to the appeal are fully exposed and the basis of the decision of the lower court appealed against is analysed, it becomes manifest that the complaint of the appellant revolves over whether or not the respondent led enough evidence to deserve the judg-ment given in his favour. All the three issues formulated by the appellant could be properly accommodated under that is-sue. The respondent in its brief adopted the three issues for determination as formulated by the appellant.

A convenient starting point to a discussion of the issues is to examine the pleadings of the parties upon which the case was tried by the lower court. The plaintiff in paragraphs 3, 12, 13 and 16 to 19 of his amended statement of claim averred:– “3. By a letter dated 7 January, 1994, the defendant instructed

the plaintiff to institute winding up proceedings against Icon Ltd (Merchant Bankers) (hereinafter referred to as ‘the Company’) for not being able to pay the sum of N50,000,000 plus interest owed to the defendant believing that the service of the winding up petition would spur the company into paying up.

12. On 12 November, 1994, the plaintiffs on behalf of the defendant filed an action, in the Federal High Court in Suit No. FHC/L/CS/307/94, for recovery of the sum of


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N99,394,689.82 owed by the company as at 28 April, 1994 and interest therein at (Amended Statement of Claim Con-tinued) the rate of 21% per annum from 28 April, 1994 till liquidation of the judgment debt.

13. On the 3 March, 1995 judgment was entered in favour of the defendant.

16. The company had paid N2,500,000 out of the judgment debt of which the defendant had paid the plaintiffs 10% ie (250,000) being their fee.

17. On 14 August, 1995 Counsel to the company informed the Court that the company had paid the sum of N47,500,000 to the defendant through the Central Bank of Nigeria. Evi-dence of the payment was shown to the Court.

18. Since the plaintiffs were not informed by the defendant of such payment, the plaintiffs had to apply for adjournment of the case to enable them to confirm from the defendant whereupon the Court adjourned the case till 30 October, 1995. At the trial of this case, the plaintiffs shall rely on the proceedings in Suit No. FHC/L/CS/1307/94.

19. The defendant confirmed the said payment to the plaintiffs whereupon the plaintiffs submitted their bill of charges dated 15 August, 1995, for the sum of N3,625,000 to the defendant. At the trial of this suit the plaintiffs shall rely on the (amended statement of claim continued) bill of charges.”

The defendant in paragraphs 2, 3 and 8 to 16 of the first amended statement of defence averred:– 2. The defendant admits paragraph 3 of the plaintiff’s claim to

the extent only that by a letter dated the 7 January, 1994 the plaintiff was instructed to institute winding up proceeding against ICON Limited Merchant Bankers (hereinafter re-ferred to as “the company”) to recover the sum of N50 Mil-lion together with accrued interest thereon.

3. The defendant avers that in the said letter of instruction, it was clearly stated that the plaintiff’s professional fees would be contingent on the actual amount recovered by the plaintiff.

8. Consequently, the plaintiff on 12 November 1994, filed another action at the Federal High Court in Suit No. FHC/L/CS/1307/94 for recovery of the sum of N99,394,689.92 owed the defendant by the company as at the 28 April, 1994 plus accrued interest at the rate of 21% per an-num from 28 April, 1994 till liquidation of the judgment debt.


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9. The defendant states that judgment was entered in favour of the defendant in the suit referred to in paragraph 3 above in default of appearance.

10. Consequent upon the judgment the sum of N2,500,000 was paid by the company out of the judgment debt out of which the defendant paid the plaintiff the sum of N250,000 being 10% as its fees pursuant to the agreement averred in para-graph 1 above.

11. On the 14 August, 1995,the Central Bank of Nigeria (“CBN”) in exercise of its discretionary powers to intervene in the financial system and without any prompting (first amended statement of defence continued) from the plaintiff debited the company’s account for the sum of N47.5 Million and credited the defendant’s account with CBN.

12. When plaintiff became aware of this it demanded for pro-fessional fees on the amount involved ie N47.5 Million and this request was declined by the defendant since the recov-ery was not effected through the plaintiff’s effort.

13. The defendant avers that despite the fact that the recovery was not made through the plaintiff, the defendant on the 17 November, 1995 offered to the plaintiff the sum of N300,000 (Three Hundred Thousand Naira) as compensa-tion and this was rejected by the plaintiff.

14. The defendant states that it sought clarification from both the Central Bank of Nigeria (“CBN”) and the Nigeria De-posit Insurance Corporation (“NDIC”) on the issue.

15. The defendant avers that by letters dated November 21, 1995 both the Central Bank of Nigeria (“CBN”) and the Nigeria Deposit Insurance Corporation (“NDIC”) wrote to inform the defendant that the Central Bank was exercising its discretionary and supervisory power meant to safeguard the financial system and that the Central Bank of Nigeria did not act on behalf of any body or in response to any re-quest or pressure from third parties and that the money was not paid by the company but by Central Bank of Nigeria on behalf of the company. The (First Amended Statement of Defence Continued) defendant will find and rely on the said letters of 21 November, 1995 at the trial of this action.

16. The defendant avers positively that the plaintiff having not been responsible for the recovery of the said N47.5 Million is not entitled to the sum of N3,625,000 claimed by it.


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It is easy to identify the cause of the dispute between the parties from the extracts of parties pleadings reproduced above. The relevant facts are these:–

The plaintiff is a legal practitioner and the defendant a banker. The defendant was owed the sum of N50 Million (excluding in-terest) by a merchant banker, Icon Ltd. The defendant, by letter dated 17 April, 1994 instructed the plaintiff to help it recover the debt. The plaintiff took the assignment on hand, and after some initial false steps, ultimately obtained from the Federal High Court Lagos, a judgment for the sum of N99,394,689.82 and interest thereon at the rate of 21%. At a stage after the judgment, Icon Ltd paid N2.5 Million. The defendant paid the plaintiff the sum of N250,000 representing 10% of the part payment made by Icon Ltd. This was plaintiff’s professional fees pro rata.

Problem however arose when sometime later, Icon Ltd paid a further sum of N47.5 Million. The evidence would appear to suggest that the CBN as the supervising authority in the banking industry debited the account of Icon Ltd with the CBN, and correspondingly credited the account of the de-fendant with the said N47.5 Million. This was after the plaintiff had obtained judgment for the defendant against Icon Ltd. The plaintiff put up a claim for N4.75 Million to the defendant as his 10% professional fee on the N47.5 Mil-lion by Icon Ltd. The defendant refused to honour the claim contending that the payment of N47.5 Million by Icon was as a result of the intervention of the CBN and not the result of any action by the plaintiff. It needs be said here that the letter of instructions to the plaintiff from the defendant had been specific that the plaintiff would only be paid a percent-age of the amount recovered by him. The crucial question is – who recovered the N47.5 Million?

The lower court in its judgment at page 139 of the record said:–

“It is convenient to start the consideration of the main issue from the premises, that the Central Bank of Nigeria could not have woken up suddenly one morning to credit the account of the de-fendant with the sum of N47.5 Million Naira, debiting the account of ICON Limited (Merchant Bankers). The Central Bank of Nige-ria must have taken that step in reaction to an action. The Central Bank of Nigeria was not a party to Suit No. FHC/L/CS/1307/94.


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The two parties to that suit were the defendant herein and ICON Limited (Merchant Bankers). The principal sum owed by ICON Limited to the defendant by ICON Limited was N50,000,000. The amount for which default judgment was obtained was N99,396,689.82. As it is now known, the Central Bank of Nigeria did not pay either the N99,394,689.82 or the N50,000,000. It is not in dispute that after judgment was obtained against ICON Limited, by the defendant, ICON Limited made a part payment of N2,500,000. The fact that ICON Limited made a part payment of N2,500,000 is prominently reflected in the decision of the Central Bank of Nigeria by paying N47.5 Million thus taking cognisance of the part payment made by ICON Limited. That immediately translates into one fact the fact that the Central Bank of Nigeria was aware of what was happening in the Court.”

The appellant’s Counsel in his brief has criticised the above passage of the judgment contending, that there was no evi-dence before the trial Judge upon which he could have come to the conclusion that the CBN knew of the suit in Court be-tween the defendant and Icon Ltd. I get the impression that appellant’s Counsel was engaged in merely dramatising a small matter to create the wrong impression. The case of the defendant at the trial court was that the CBN on its own vo-lition caused the account of Icon Ltd kept at the CBN to be debited to the tune of N47.5 Million. On the other hand, it was plaintiff’s case that the money was paid as a result of the litigation in court. It was only in this sense that it could have assisted either party’s case knowing what had prompted the CBN to debit the account of Icon Ltd by N47.5 Million.

It was undisputed that of the N99,394,689.82 for which the plaintiff got judgment against Icon Ltd for the defendant, the principal was N50,000,000. The difference between N50,000,000 and N99,394.689.82 was accounted for by in-terest at 21% per annum of the principal sum of N50,000,000. Icon Ltd following the judgment against it had paid N2.5 Million leaving a balance of N47.5 Million. By some strange coincidence, the CBN has debited the account of Icon Ltd with N47.5 Million. So, how did the CBN know that Icon Ltd was indebted to the defendant on the principal for N47.5 Million. However DW3 called by the defence


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would appear to have supplied the missing link when he tes-tified:–

“At maturity the process is reversed. The bank that had the origi-nal credit gives instructions to CBN to credit his account for the amount due and debit the account of the original transferor. It is not possible for the CBN to effect such transfer without instruc-tions from the debtor bank.” (Italics mine.)

Clearly, the import of the evidence of DW3 was that, the CBN debited the account of Icon Ltd and credited that of the defendant by N47.5 Million only because Icon Ltd in-structed the CBN to do so. The inference to be drawn there-fore, and any court would do so, was that Icon Ltd under pressure of the judgment against it and to prevent execution being levied against it on the judgment had instructed the CBN to debit its account. So when the lower court said that the CBN knew of the case between the defendant and Icon Ltd, it was referring to “knowledge” as communicated to CBN by Icon Ltd as to satisfying the judgment against ICON Ltd. The inference which the lower court drew was one informed by common sense.

Under the second issue, the appellant contended that the lower court was wrong in its application of section 137 of the Evidence Act. Now section 137 of the Evidence Act provides:– “(1) In civil cases the burden of first proving the existence or

non-existence of a fact lies on the party against whom the judgment of the court would be given if no evidence were produced on either side, regard being had to any presump-tion that may arise on the pleadings.

(2) If such a party adduces evidence which ought reasonably to satisfy a jury that the fact sought to be proved is estab-lished, the burden lies on the party against whom judgment would be given if no more evidence were adduced; and so on successively, until all the issues in the pleadings have been dealt with.”

At page 143 of the record the lower court reasoned thus:– “In this case, the plaintiff pleaded that the sum of N47.5 million paid to the defendant by the Central Bank was so paid through his efforts. The defendant in response pleaded under paragraphs 11 and 12 of their Statement of Defence dated 19 March, 1995 that


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the payment made by the Central Bank of Nigeria was so made without any prompting from the plaintiff and that the sum paid by the CBN was not recovered through the plaintiff’s efforts. The matter of whether the payment was made by the CBN through the efforts of the plaintiff was thus put in issue. The plaintiff led evi-dence to establish all the efforts made by him to recover the money, which efforts included obtaining judgment against the de-fendant’s debtor ie ICON Limited interested person. The defen-dant’s debtor ie ICON Limited admitted the judgment. ICON Lim-ited made part payment of N2.5 Million. ICON Limited filed an application for instalmental payment. Then suddenly, the CBN paid N47.5 Million. Having established his case up to that point, the burden was shifted on to the defendant to establish that the payment was made to the CBN without the efforts of the plaintiff.”

Was the lower court wrong in its approach? I think not. The plaintiff pleaded and gave evidence on the efforts he made in the recovery of the debt from Icon Ltd. He tendered the judgment which he obtained for N99,394,689.82. The sum of N47.5 million debited against the account of Icon Ltd by CBN was paid only after the judgment had been obtained. The defendant would have briefed the plaintiff to act for it only, when it realised that that was the proper method to re-cover its money. The lower court therefore correctly rea-soned that if the plaintiff had shown that he carried out the instructions of the defendant and obtained judgment; and that payment was made after judgment was obtained, the onus was on the defendant to show that the efforts of the plaintiff did not actually lead to the payment of N47.5 Mil-lion by Icon Ltd.

My view is that the defendant by their resistance to the plaintiff’s claim had overlooked two things:– (1) The evidence of DW3 that CBN could not have deb-

ited the account of Icon Ltd for N47.5 Million if ICON Ltd had not given its consent.

(2) That Icon Ltd in authorising the CBN to debit its ac-count would have acted under the necessity to pay the judgment debt or face unpleasant consequences arising from the execution of the judgment against it.


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It is common knowledge that many people obey the law and legal processes in order to avoid the unpleasant conse-quences, which may follow a failure or refusal to do so.

If Icon Ltd had not paid the judgment debt, execution might follow. Its properties might be attached and publicly sold. For a banker, that might mean the end of the road in its business. The conclusion was inevitable that it was the fear of what might follow the non-satisfaction of the judgment that impelled Icon Ltd to instruct the CBN to debit its ac-count. The onus was on the defendant to show that this was not the case.

Under the third issue, the appellant contended that the lower court was wrong to have construed the offer to pay the plaintiff the sum of N300,000 as an admission of its li-ability to pay the plaintiff N4.75 Million. At pages 145–146 of the record, the trial Judge in its judgment said:–

“It is also important to note that although the defendant claimed that the sum of N47.5 Million paid by the CBN to the defendant was not so paid through the plaintiff, the defendant offered to pay to the plaintiff a sum of N100,000 as compensation when the plaintiff rejected. The defendant on a second occasion offered to pay the plaintiff the sum of N300,000 as compensation, which the plaintiff rejected. To my mind the offers so made to the plaintiff amount to admission of liability.”

Quite frankly, I do not know why the lower court reasoned in the way it did. I am with respect unable to agree with it on the point. An offer to pay N100,000 or N300,000 without more to it could not in the circumstances of this case amount to an admission of liability to pay N4.75 Million.

Section 19 of the Evidence Act defines an admission as a statement, oral or documentary, which suggests any infer-ence as to any fact in issue or relevant fact, which is made by any persons.

The trial Judge was in error to have treated the offer of N100,000 or N300,000 as an admission of liability by the defendant.

Having made the above point, I must end by saying that the error by the learned trial Judge could not have resulted


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in a miscarriage of justice since there was substantial evi-dence on record justifying the conclusion that the plaintiff was entitled to the judgment in his favour and that the sum of N47.5 million was paid as a result of his efforts. It was undisputed that the plaintiff initiated the proceedings leading to the judgment against Icon Ltd. It must also be inferred that Icon Ltd caused the CBN to pay the N47.5 million as a result of the judgment given against Icon Ltd.

The appeal is unmeritorious. It is dismissed with N5,000 cost against the appellant. ADEREMI JCA: I have had the privilege of reading in ad-vance the judgment just delivered by my learned brother Oguntade, JCA. The issues therein involved have been lu-cidly dealt with by my learned brother in the leading judg-ment.

It is not in doubt that a contractual relationship of the na-ture of client/solicitor existed between the appellant and the respondent. Under the contract the respondent was to place at the disposal of the appellant his professional skill to facili-tate the collection of money due to it from ICON Ltd (Mer-chant Bankers). Of course, he was to get paid for his profes-sional services. A contract could be in writing; it could also be parole. Short of making an agreement for the parties, the law permits the court to infer the existence of a contract from the conduct of the parties in the circumstances of each case. After the respondent had prosecuted the case of the ap-pellant against ICON Ltd to the state of delivery of judg-ment, the judgment debtor (ICON Ltd) paid N2.5 million to the appellant as part payment of the judgment debt. Evi-dence on record shows that the sum of N250,000 represent-ing 10% of the part payment made by ICON Ltd was paid by the appellant to the respondent as his professional fees on pro-rata basis. By that conduct the appellant has held itself out as being under an obligation to pay to the respondent as professional fees, 10% of all monies arising from the judg-ment as might be paid by ICON Ltd to appellant. It would amount to a breach of its obligation under the agreement if the appellant refused to pay 10% of the sum of


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N47.5 million subsequently paid to the appellant by ICON Ltd towards the settlement of the judgment debt.

In conclusion, for the reasons I have herein given and the more elaborate and lucid ones proffered in the lead judg-ment of my learned brother, Oguntade, JCA, I too dismiss the appeal as unmeritorious. I make similar consequential order as to cost against the appellant. NZEAKO JCA: I have had the privilege of a preview of the judgment just delivered by my learned brother, Oguntade, JCA. I am in agreement with the decision and conclusions.

There is some angle however to the matters which arose in the appeal which I wish to briefly address. My learned brother, Oguntade, JCA has adequately outlined the facts of this matter. I will draw from it.

A dispassionate consideration of the evidence and the sub-mission of Counsel in this matter show that there is some vital link, which was missing in the evidence adduced by the defendant/appellant at the Court below. It was detrimen-tal to its case. Had it plugged that hole, the final decision, which this Court now comes to could have been different.

Lay persons who are familiar with the working of the Cen-tral Bank of Nigeria (“CBN”) realise its supervisory func-tions as the monetary authority in Nigeria. The CBN exer-cises these functions over all licenced banks and financial institutions. The origins of its powers are statutory. They derive from such laws as the Central Bank Act, 1991 (See section 2) and Banks and Other Financial Institutions De-cree (“BOFID”) of 1991 (particularly sections 1 and 38).

The courts of the land have judicial notice of these statutes as the laws and enactments of this land, as provided by sec-tion 74(1)(a) and (b) of the Evidence Act.

The manner and circumstances the CBN exercises these statutory powers, vis-à-vis banks and institutions under it, is a matter of day to day policy and activities of the CBN, the apex Bank. It is not spelt out in the statutes. In my view, it becomes a matter of evidence. It is not one of such matters as the courts take judicial notice of under the Evidence Act (supra).


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The defendant/appellant averred in paragraph 11 of its sta-tement of defence that:–

“On 14 August 1995, the Central Bank in exercise of its discre-tionary powers to intervene in the financial system and without any prompting from the plaintiff, debited the company’s account for . . . N47.5 million and credited the defendant’s account in CBN.”

Therefore, when the issue arose at the trial before the lower Court, as to what circumstances led the CBN to credit Sa-vannah Bank, the defendant/appellant with money from the account of Icon Merchant Bank, in part settlement of debts owed Savannah Bank from inter bank placement arrange-ment between the two Banks, it was a question to be re-solved from the evidence before the Court.

This evidence was necessary to determine whether it was through the act of the plaintiff or that of the defen-dant/appellant that the sum of N47.5 million paid from the account of Icon into that of Savannah was recovered.

A related issue arising from this and requiring evidence was how the CBN knew of the debt owed Savannah Bank, the defendants by Icon Merchant Bank, which CBN pro-ceeded to settle.

The evidence would in turn, determine if the plaintiff was entitled to the professional fee being claimed by the plain-tiff/respondent.

The defendant/appellant realising the importance of this evidence to prove his assertion in paragraphs 12 of its de-fence, duly called DW1 and DW3 to testify.

DW2, was a senior official and Bank examiner of NDIC, also involved with bank supervision by virtue of NDIC’s statutory powers as the insurer of licensed banks under the NDIC Act, 1988 and DW3, a senior CBN official. Both wit-nesses testifying, explained the circumstances upon which the Central Bank intervened since 1993, to help banks to re-cover inter bank placements. Evidence showed that that was in order to determine the actual net positions of the banks during the period of rampant distresses in banks.


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Their evidence is most relevant to the matters in contro-versy between the plaintiff/respondent and the defen-dant/appellant.

But, these vital questions were never really answered by the two witnesses.

After reading their evidence on record, one could not help concluding that it did not quite hit the mark.

DW3 said:– “As a result of the distress being experienced by many banks inci-dents of default in meeting their obligations to one another be-came rampant. These were reported to Central Bank of Nigeria and NDIC which is the organ that insures bank deposits. The CBN and NDIC con-stituted a joint Committee . . . The sub committee CBN/NDIC Technical Committee on problem Banks met to consider opera-tions of banks classified as distressed and make recommendations . . . on policies necessary to solve the identified problems.”

This piece of evidence on which the appellant heavily relied dwelt generally on banks classified as distressed.

It did not name any particular bank, or the two in this suit ICON Merchant Bank or Savannah Bank, as being those concerning which the CBN acted or as banks classified as distressed and in whose affairs the CBN unilaterally inter-vened. There is no evidence that pinned the unilateral action of the CBN unto any of the two banks.

The evidence of DW2 was virtually in the same vein as DW3’s, general in nature and content on this point, as that of DW3. When the plaintiff/respondent at the trial tried to pin the CBN action to Savannah Bank, the defendant’s wit-ness, DW2 replied:–

“I cannot remember whether the defendant bank was one of the banks that protested.”

Clearly this was reference to the protest or complaint prompting the CBN to intervene between some banks.

Therefore all that evidence from the Defence to prove its averment failed to hit the mark. It did not establish what was sought to be proved. It did not show that Savannah Bank protested or reported ICON to CBN or NDIC or that


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Savannah Bank or ICON fell into the category of distressed Banks for which CBN intervened, following the recommen-dation of the sub committee on which DW3 served, also tes-tified on by DW2.

No further evidence was adduced to prove these vital is-sues thereafter, that the payment by CBN was an act which fell within its discretion and to which Savannah Bank was entitled. Meanwhile, the plaintiff/respondent had adduced evidence of all the actions he took towards recovering the debt as set out in the lead judgment. It was then for the de-fendant/appellant to rebut same and to prove its averment in paragraph 12 of its defence.

There is the principle that after all evidence has been led, the burden of proof rests on the party against whom the court would give judgment if no further evidence is adduced on that issue.

(See Saraki v Societe Generale Bank (1995) 1 NWLR (Part 371) 325.) If the party fails to discharge the onus, then his case fails. In line with these principles, this Court cannot but come to the decision that the defendant/appellant has not discharged that burden so vital to his defence. This is detri-mental to it, and to this appeal, which fails. For this and other reasons so clearly set out by my learned brother, Oguntade, JCA, I also dismiss the appeal. Appeal dismissed.



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Nigeria Deposit Insurance Corporation v Nyamatai Enterprises Ltd and another

FAILED BANKS TRIBUNAL, ZONE II, LAGOS OPE-AGBE J Date of Judgment: 4 JUNE, 1999 Suit No.: FBFMT/L/Z.II/56/96

Failed Banks Tribunal – Recovery of debt – Liability of Di-rector of Company – How established – What applicant must prove to succeed in an application for recovery of debt Mortgage – Mortgagee’s power of sale – Whether allega-tion of sale at under value vitiates Facts The applicant’s claim as per the amended application against the first and second respondents Nyamatai Enterprises Lim-ited and Chief Eniang E. Offiong jointly and severally is for the sum of N5,845,731.32 being the outstanding amount as at 16 January, 1998 on a loan facility given the respondents by Mercantile Bank of Nigeria Plc. (hereinafter referred to as “the Bank”) sometime in 1976 and which the respondents have failed and/or refused to pay despite repeated demands. The applicant claims interest at 21% per annum from 16 January, 1998 until the whole sum is fully liquidated.

Pleadings were filed and exchanged and the case set down for trial. One witness testified in proof of the applicant’s claim while the respondents and their Counsel stayed away at the material times of the proceedings when applicant led evidence in proof of its claim and when the applicant’s Counsel addressed the Tribunal.

The second respondent was the Managing Director of the first respondent Company and guarantor of the loan. The summary of the evidence adduced by the applicant was that the Bank a failed bank granted facilities to the first respon-dent which was not paid despite repeated demands. The evi-dence was supported by Statement of Account. The respon-dents filed their defence but did not lead evidence in support at the trial.



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Held – 1. In an application for recovery of debt against a respon-

dent brought before the Tribunal what the applicant should establish to prove its case are:–

1. that a failed bank is owed money; 2. that respondent a customer of the failed bank is ow-

ing the bank; and 3. that the debt remained unpaid and unsatisfied. In

other words the debt is still outstanding. 2. Where a defendant has failed, refused or neglected to

lead evidence in line with his pleading in his statement of defence, the plaintiff or the applicant in the instant case, would have discharged the legal burden of proof placed on it on a minimal of proof.

3. On the other hand, mere averments without proof of the facts pleaded is no proof of such facts. If they are not admitted, such facts without proof by way of adducing evidence in support would be deemed to have been abandoned.

In the instant case the respondents raised some issues in their amended statement of defence but led no evidence in support of such issues. The respondents are deemed to have abandoned their defence and the issues raised therein.

4. The entries in the statement of account – exhibit G–G(1) – to show that as at 17 February, 1995 the debit balance as at 17 February, 1995 was N4,192,035.66 are admissi-ble under section 38 of the Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990 to prove such account in addition to other proofs such as inferred admission of the facility to establish the claim.

5. The liability of a director for the debts of a corporate body is established where the director is shown to be in-volved in the day to day activities of the corporate body.

The second respondent in the instant case as the Chair-man/Managing Director of the first respondent falls into this category.



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6. Allegation of under value alone is not enough to vitiate the exercise of a mortgagee’s power of sale in the ab-sence of fraud.

7. A Court or Tribunal can award a plaintiff less than it had claimed but certainly not more than it had claimed.

Application granted in part.


Nigerian Adegbite v Ogunfaolu (1990) 4 NWLR (Part 146) 578 Egbunike v African Continental Bank Ltd (1995) 2 NWLR (Part 375) 34 Eka-Eteh v Nigeria Housing Development Society Ltd (1973) 6 SC 183 Imana v Robinson (1979) 3–4 SC 1 Lion Investments Ltd v NDIC (1997) 2 F.B.TLR 16 Macebuh v NDIC (1997) 2 F.B.TLR 1 National Electric Power Authority v Alli (1992) 8 NWLR (Part 259) 279 Nwabuoku v Ottih (1961) 2 SCNLR 232 Obo v Commissioner of Education, Bendel State (1993) 2 NWLR (Part 273) 46 Omoruyi v New Nigeria Bank Plc (1998) 1 F.B.TLR 1

Counsel For the applicant: Adekunle Omowole

Judgment OPE-AGBE J: The action herein was commenced by Mer-cantile Bank of Nigeria Plc (appointed by Nigeria Deposit Insurance Corporation (“NDIC”) pursuant to section 11 of the Failed Banks Decree No. 18 of 1994 (as amended) as the applicant.


Ope-Agbe J


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Consequent upon the revocation of the Banking Licence of Mercantile Bank of Nigeria Plc by the Federal Republic of Nigeria Official Gazette No. 4 of 1998 Government Notice No. 18 the applicant brought an application dated 29 June, 1998 for an order substituting the name Nigeria Deposit In-surance Corporation (Liquidator of Mercantile Bank of Ni-geria Plc) wherever it appeared as the applicant in this suit. The application was granted.

The applicant’s claim as per the amended application against the first and second respondents – Nyamatai Enter-prises Limited and Chief Eniang E. Offiong jointly and sev-erally is for the sum of N5,845,731.32 being the outstanding amount as at 16 January, 1998 on a loan facility given the respondents by Mercantile Bank of Nigeria Plc. (hereinafter referred to as “the Bank”) sometime in 1976 and which the respondents have failed and/or refused to pay despite re-peated demands. The applicant claims interest at 21% per annum from 16 January, 1998 until the whole sum is fully liquidated.

Pleadings were filed and exchanged and the case set down for trial. One witness testified in proof of the applicant’s claim while the respondents and their Counsel stayed away at the material times of the proceedings when applicant led evidence in proof of its claim and when the applicant’s Counsel addressed the Tribunal.

The only witness of the applicant Alex Uzowulu appli-cant’s witness (AW1) a banker testified that he worked for the Bank up till 16 January, 1998, he now works for NDIC on contract. AW1 stated that the bank is liquidated. At the time he was with the Bank, he was a Branch Manager at Aba and Calabar Branches for the Cross River Area and Lagos North which covers branches in Lagos State and the entire Northern States. Lagos State covers Nnamdi Azikiwe Street Branch. AW1 stated that the first respondent is a customer of the Lagos Branch of the Bank while the second respon-dent is the Chairman/Managing Director of the first respon-dent, that overdraft was granted to the first respondent fol-lowed by a loan facility. The various facilities were


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reviewed upwards till 1980 when the total amount was N500,000, that the account number of the first respondent with the Lagos Branch of the Bank is 3020001650. There is a statement of account taken from the ordinary books of ac-count of the Bank, it was compared to see if it is correct.

The statement of account no. 3020001650 and the loan ac-count no. 5011001652 were tendered and admitted in evi-dence as exhibits G–G(1) and H. AW1 stated that the various facilities were secured by a Legal Mortgage over developed property of the second respondent at No. 9, Bereola Street, Surulere, Lagos. Photocopy of the Deed of Legal Mortgage dated 3 October, 1978 was tendered and admitted in evidence as exhibit A–A(1)–(6). There was an up stamping of exhibit A–A(1)–(6) and photocopy of the up stamping of the Mort-gage Deed dated 11 November, 1980 was tendered and ad-mitted in evidence as exhibit B. AW1 stated that Legal Mort-gage of another property of the first respondent situate in Calabar was taken. The property known as Nyamatai House is located at Murtala Mohammed Highway, that there was a joint and several guarantees of the directors of the company, that the facilities have not been liquidated, that several de-mands were made on the respondents and their agents Sam Udo-Akagha and Partners, Estate Surveyors and Valuers. Photocopies of letters of demand dated 20 February, 1992 and 23 November, 1994 were tendered and admitted in evi-dence as exhibit C–C(1). Photocopy of letter dated 28 Sep-tember, 1994 referred to in exhibit C(1) from S. Udo-Akagha and Partners to the Bank was tendered and admitted in evi-dence as exhibit D. Also photocopy of letter of demand dated 18 June, 1996 from Omowole, Tijani and Co applicant’s So-licitors to the second respondent was tendered and admitted in evidence as exhibit E–E(1). Photocopy of reply letter dated 27 June, 1996 from Sam Udo-Akagha and Partners to Messrs Omowole, Tijani and Co was tendered and admitted in evi-dence as exhibit F–F(1)–(3).

AW1 stated that the Bank has already realised one of the securities in that the property in Calabar was sold in 1995 for N2.7 Million and this amount was credited into the ac-count of the first respondent to reduce its indebtedness, the


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proceeds of sale was lodged into the account of first respon-dent on 17 February, 1995, that before the lodgement the balance in the account exhibit G–G(1) as at 31 January, 1995 was N6,892,035.66 debit, but with the lodgement of N2.7 Million into the account on 17 February, 1995 the bal-ance was reduced to N4,192,035.66 debit, that as at 16 Janu-ary, 1998 when the Banking Licence of the Bank was re-voked the balance was N5,845,731.32 debit.

Document evidencing transfer of interest on the Calabar property after sale to Alhaji Ado Ibrahim – photocopy Deed of Assignment dated 28 October, 1994 was tendered and admitted in evidence as exhibit J–J(1)–(4).

AW1 stated that there was no fraud involved in the sale of the property evidence is exhibit J–J(1)–(4) that to his knowl-edge the property was not sold at under value, it was sold to the highest bidder. With regard to the property at No. 9, Bereola Street, Surulere, Lagos, AW1 stated that the prop-erty has not been disposed off, that it is not correct that the property was not used as security, that it was used as an ad-ditional security, that it was in fact the first security the Bank accepted as security, that there is no memo instructing that the property should be released.

The applicant closed its case with the evidence of AW1. As earlier stated in this judgment the respondents and their Counsel for reasons best known to them stayed away from the proceedings notwithstanding the fact that in the course of proceedings the applicant moved two applications which the respondents were shown to have been served with and cop-ies of the processes were endorsed on behalf of the respon-dents yet they failed, refused or neglected to appear in the Tribunal to take part. Learned Counsel for the applicant ad-dressed the Tribunal.

In an application for recovery of debt against a respondent brought before the Tribunal what the applicant should estab-lish to prove its case are:– 1. Is there a failed bank that is owed money. 2. Is the respondent a customer of the failed bank who

is owing the failed bank money.


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3. Has the debt remained unpaid and unsatisfied. In other words is the debt still outstanding.

The evidence of AW1 which is unchallenged and uncontro-verted shows that he was formerly a senior officer of the bank but the Bank has been liquidated and that he now works for NDIC; that the Bank granted overdraft and loan facilities to the first respondent who is a customer of the Bank which as at 1980 had been reviewed upwards to the tune of N500,000 that the second respondent is the Chairman/Managing Director of the first respondent and that as at 16/1/98 when the Banking Licence of the bank was revoked the first respondent was ow-ing N5,845,731.32 Debit, that demand letters were sent to the respondents and to their agents but the debt remains unsatis-fied, that the facilities were secured by Deed of Legal Mort-gage which was Up stamped. (See exhibits A–A(1)–(6), B, C–C1, D, E–E(1) and F–F(1)–(3).)

AW1 tendered exhibit G–G(1) and H statements of ac-count of first respondent with the Bank to show the different transactions.

Entry on exhibit H for 11 February, 1981 shows that the loan approved was N270,000 and as at 17 February, 1995 the balance on the account N207,000 was transferred to the current account exhibit G–G(1).

Entry on exhibit G–G(1) for 17 February, 1995 for N207,000 reflects the transfer. Also on same 17 February, 1995 proceeds of sale is reflected as having been credited to the account. It was the sum of N2.7 Million which reduced the debit balance from N6,892,035.66 to N4,192,035.66. It is the evidence of AW1 that as at 16 January, 1998 when the Banking Licence of the Bank was revoked the debit balance on the account was N6,845,731.32. This piece of evidence remains unchallenged and is deemed to be true and correct.

In their amended statement of defence the respondents de-nied the grant of the loan but in another breath averred that the loan was in respect of the respondents’ property at Mur-tala Mohammed Highway, Calabar. This averment in para-graph 2 of the amended statement of defence is an admission that facility was granted to the respondents. The respondents


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have failed, refused or neglected to lead evidence in line with their pleading in the amended statement of defence. The state of the law is quite clear in situations of this nature. The plaintiff or the applicant in the instant case would have discharged the legal burden of proof placed on it on a mini-mal of proof. See on this the cases of:– (i) National Electric Power Authority v R.O. Alli and

another (1992) 8 NWLR (Part 259) 279 at 301D–E; (ii) Imana v Robinson (1979) 3–4 SC. 1 at 8; (iii) Nwabuoku v Ottih (1961) 2 SCNLR 232; (iv) Obo v Commissioner of Education, Bendel State

(1993) 2 NWLR (Part 273) 46 at 61 F–G; (v) Adegbite v Ogunfaolu (1990) 4 NWLR (Part 146)

578. On the other hand, mere averments without proof of the facts pleaded is no proof of such facts. If they are not admit-ted, such facts without proof by way of adducing evidence in support would be deemed to have been abandoned. (See also the case of Egbunike and another v African Continental Bank Ltd (1995) 2 NWLR (Part 375) 34 at 52 C–D.)

The respondents raised some issues in their amended statement of defence but led no evidence in support of such issues, I hold that respondents are deemed to have aban-doned their defence and the issues raised therein. However, by exhibit D letter written on behalf of the respondents by S. Udo-Akagha and Partners to the Bank there can be no doubt that respondents are indebted to the Bank. Exhibit D reads as follows:–

28 September, 1994. “LC/009/Vol. II/SUA The Managing Director and Chief Executive Mercantile Bank of Nigeria Plc, Mercantile House, 10, Calabar Road, Calabar. Dear Sir,


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Nyamatai House, Calabar – Account No. 165 at Your Lagos Branch Office The above property is managed by us for and on behalf of Nyama-tai Enterprises (Nigeria) Limited hereinafter referred to as ‘Our Clients’. The property is mortgaged to your bank for a loan which we understand is substantially outstanding and which we have had our clients’ instruction to service from whatever rents we collect. Regrettably for years now the property has remained unlet and, judging from the depressed Calabar property market it is doubtful, even if the property is let, that sufficient funds would be forthcom-ing from the rents to successfully service the loan. We are there-fore exploring some other areas from which funds could be se-cured for the full liquidation of the loan. We are therefore asking for some time to perform, say up to 31 March, 1995. We may per-haps come up with a solution much earlier but we believe with 31 March, 1995 we are unlikely to ask for an extension. We should be obliged if your Lagos Branch Office, to whom this let-ter is copied, would send to us a full statement of our said clients’ ac-count showing the balance as at 30 September, 1994 and the build-up to this figure. Our clients are advised, by copy of this letter, to write to your bank authorising it to forward the statement to us. Kind regards. Yours faithfully,

(Sgd.) S. Udo-Akagha

c.c: The Branch Manager, Mercantile Bank Plc, Lagos. c.c: The Managing Director, Nyamatai Enterprises (Nigeria)

Ltd.” The sum total of the evidence adduced by the applicant is that the Bank, a failed bank granted facilities to the first respon-dent which the first respondent has failed to repay after re-peated demands and that as at 16 January, 1998 the debit bal-ance was N5,845,731.32 however exhibit G–G(1) shows that as at 31 October, 1997 the debit balance was N7,429,809.92 an amount which is far in excess of the amount claimed on the amended application for recovery of debt. Evidence was led and supported by the entries in the statement of account – exhibit G–G(1) – to show that as at 17 February, 1995 the debit balance was N4,192,035.66. Pursuant to section 38 of the Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, exhibit G–G(1) is admissible to prove such account in


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addition to other proof to establish the claim. Such other proofs apart from the inferred admission of the facility in the amended statement of defence are letters from the respon-dents. (See exhibit D and F–F1 and the case of Lion Invest-ments Ltd v NDIC (1997) 2 F.B.TLR 16 paragraph 4.)

In paragraph 18 of the said amended statement of defence it was pleaded that the second respondent is the alter ego and directing mind of the first respondent. Evidence was led un-challenged that the second respondent is the Chair-man/Managing Director of the first respondent. In executing the Legal Mortgage over 9, Bereola Street, Surulere, Lagos – exhibit A–A(1)–(6) – the second respondent described himself as the surety. I hold that the second respondent is properly joined in the suit as a necessary party. Also on the authority of Dr S. Macebuh and another v NDIC (1997) 2 F.B.TLR 1, the liability of a director for the debts of a cor-porate body was established where the director is shown to be involved in the day to day activities of the corporate body. The second respondent as the Chairman/Managing Di-rector of the first respondent falls into this category.

Finally the statement of account exhibit G–G(1) does not show the balance as at 16 January, 1998. I intend to take the figure shown on the statement of account and given in oral evidence, that is N4,192,035.66 as at 17 February, 1995. On the authority of Lion Investments Ltd and 2 others v NDIC (1997) 2 F.B.TLR 16 at 35 the Special Appeal Tribunal held that a Court or Tribunal can award a plaintiff less than it had claimed but certainly not more than it had claimed.

On the allegation that the property at Calabar was sold at under value, the respondents have failed to lead evidence to establish their allegation of fraud. The consequence is that the allegation is deemed to have been abandoned.

In any case allegation of under value alone is not enough to vitiate the exercise of a mortgagee’s power of sale in the absence of fraud. (See the case of Omoruyi v New Nigeria Bank PLC (1998) 1 F.B.TLR 1 at 9–10 wherein the case of


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Eka-Eteh v Nigeria Housing Development Society Ltd and another (1973) 6 SC. 183 at 198 was followed.)

In the result applicant’s claim succeeds. Judgment be and is hereby entered in favour of the applicant against the first and second respondents jointly and severally in the sum of N4,192,035.66 as at 17 February, 1995 plus interest at the rate of 21% per annum from 18 February, 1995 till judg-ment thereafter at 6% per annum until the final liquidation of the judgment debt.

Pursuant to section 13(2) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) the first and second respondents are granted 30 days from the date of judgment to liquidate the judgment debt.

[1999] 9 N.B.L.R. (COURT OF APPEAL, ILORIN DIVISION)

Bank of the North Ltd v. Chief David A. Akintoye 543

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Bank of the North Ltd v Chief David A. Akintoye COURT OF APPEAL, ILORIN DIVISION OKUNOLA, AMAIZU, ONNOGHEN JJCA Date of Judgment: 7 JUNE, 1999 Suit No.: CA/IL/17/99

Banking – Accounts – Customers having two accounts – How treated Defamation – Non-payment of debt – Advertisement of mort-gaged property for sale – Whether amounts to defamation Mortgage – Essential nature thereto – Mortgagee’s power of sale where it arises and when exercisable – Whether af-fected by dispute in loan agreement – Stoppage of mort-gagee’s power of sale – How effected Facts The first appellant is a Commercial Bank with Headquarters at Kano. The respondent is a lawyer and external solicitor for the first appellant at all material time. He also operates a Current Account with the first appellant.

Sometime in 1975, the first appellant granted a loan of N10,000 to the respondent. In order to secure the loan, the respondent mortgaged his properties situate and lying at No. 26, Sulu Gambari Road, Ilorin. The respondent in his capac-ity as the External Solicitor for the first appellant prepared the mortgage deed. He also obtained the Governor’s consent covering the mortgage transaction as is required by the Land Use Act, 1978. Later, the respondent obtained another loan of N50,000, also from the first appellant. According to the respondent, it was an unsecured friendly loan. He was how-ever instructed by the first appellant, after the loan was ob-tained to up-stamp the earlier mortgage to N55,000 by an-other deed. He complied with the instruction. The respon-dent emphasised that the Governor’s consent was not ob-tained after the up-stamping. When the respondent defaulted in repaying the second loan, the first appellant instructed the second appellant, a licensed auctioneer to issue auction no-tices in the Newspapers and Television, advertising the sale



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of the landed properties at No. 26, Sulu Gambari Road, Ilorin. Immediately the sale was advertised, the respondent filed this suit against the first appellant claiming, inter alia, that the respondent is not indebted to the first appellant, that appellants are not entitled to sell the mortgaged property by auction and a declaration that the advertised auction notice was defamatory.

Judgment was entered in favour of the respondent. Dissat-isfied with the judgment, the appellant appealed to the Court of Appeal. Held – 1. The basis of a Bank’s agreement with its customers is that

the accounts kept by the customer should be kept separate. 2. The most essential nature of a mortgage is that it is a

conveyance of a legal or equitable interest in property with a provision for redemption. That is, upon repay-ment of the loan, the conveyance shall become void or the interest shall be reconveyed.

3. A mortgagee’s power of sale or foreclosure cannot be affected merely because the amount under the mortgage agreement is in dispute. In order to stop the power of sale of the mortgaged property, the amount owed must be paid in full.

4. The law is that, if the mortgage debt was not paid at any time fixed for payment, the mortgagee is entitled to ex-ercise his power of sale, the debt having been deemed to have become due and payable on that day.

5. It is common ground that the respondent did not pay the mortgage debt at the time it was due and payable. The first appellant was therefore entitled to exercise its power of sale under the mortgage agreement. Conse-quently, the first appellant is entitled to the defence of justification for the offending publications. In that case, the various advertisements to sell the respondent’s mort-gaged properties by auction cannot amount to defama-tion of the respondent’s character.

Appeal allowed.



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Nigerian B.O.N. Ltd v Muri (1998) 2 NWLR (Part 536) 153 Coker v Ajewole (1976) 9 and 10 SC 17 Majekodunmi v Co-operative Bank Ltd (1997) 10 NWLR (Part 524) 198 Moses Ola and Sons (Nigeria) Ltd v B.O.N. Ltd (1992) 3 NWLR (Part 229) 377 Nigeria Housing Dev Soc. Ltd v Mumuni (1977) 2 SC 57 Nsirim v Nsirim (1990) 3 NWLR (Part 138) 285 Obembe v Wemabod Estates Ltd (1977) 5 SC 115 Ogundeji v I.B.W.A. Ltd (1993) 2 NWLR (Part 278) 690 Okenwa v Mil Gov Imo State (1996) 6 NWLR (Part 455) 394 Okonkwo v Co-operative and Commerce Bank (Nigeria) Plc (1997) 6 NWLR (Part 507) 48 Okupe v Ifemembi (1974) 3 SC 97 Sabbagh, Assad v Bank of West Africa (1966) All NLR 234 Shuaibu v N.A.B. Ltd (1998) 5 NWLR (Part 551) 582 Solanke v Abed (1962) 1 All NLR 230 Temco Eng. and Co Ltd v S.B.N. Ltd (1995) 5 NWLR (Part 397) 607 Tsokwa Motors (Nigeria) Ltd v U.B.N. Ltd (1996) 9 NWLR (Part 471) 129 U.B.N. Ltd v Ozigi (1994) 3 NWLR (Part 333) 385 U.B.N. Ltd v Sax (Nigeria) Ltd (1994) 8 NWLR (Part 361) 150 Wema Bank Ltd v Karunwi (1975) 1 SC 15

Nigerian statutes referred to in the judgment Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, section 132 Land Use Act Cap 202 Laws of the Federation of Nigeria, 1990



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Book referred to in the judgment Gatley on Libel and Slander (7ed)

Counsel For the appellant: Abdulrazaq Abudulkareem, Esq. For the respondent: Akin Akintoye Jnr, Esq.

Judgment AMAIZU JCA: (Delivering the lead judgment) This is an appeal against the judgment of Ibiwoye, J, delivered on the 15 May, 1997, in Kwara State High Court, holden at Ilorin Judicial Division. It is necessary in order to appreciate the issues raised in the appeal to recapitulate briefly, the facts of the case that gave rise to the appeal. They are as follows:–

“The first appellant is a Commercial Bank with Headquarters at No. 2, Zaria Road, Kano. It has branches all over the country, in-cluding one at Murtala Mohammed Way, Ilorin. The respondent is a Lawyer. He is an External Solicitor for the first appellant at all material time. He also operates a current account with the first ap-pellant.”

Sometime in 1975, the first appellant granted a loan of N10,000 to the respondent. In order to secure the loan, the respondent mortgaged his properties situate and lying at No. 26, Sulu Gambari Road, Ilorin. The respondent in his capac-ity as the external solicitor for the first appellant prepared the mortgage deed. He also obtained the Governor’s consent covering the mortgage transaction as is required by the Land Use Act, 1978.

Later, the respondent obtained another loan of N50,000, also from the first appellant. According to the respondent, it was an unsecured friendly loan. He was however instructed by the first appellant, after the loan was obtained to upstamp the earlier mortgage to N55,000 by another deed.

He complied with the instruction. The respondent empha-sised that the Governor’s consent was not obtained after the upstamping. When the respondent defaulted in repaying the second loan, the first appellant instructed the second appel-lant, a licensed auctioneer to issue auction notices in the


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Newspapers and Television, advertising the sale of the landed properties at No. 26, Sulu Gambari Road, Ilorin. Im-mediately the sale was advertised, the respondent filed this suit claiming against the appellants jointly and severally as follows:– “1. Declaration that the plaintiff’s are not indebted to the first

defendant. 2. Declaration that the defendants are not entitled to sell, by

auction, or in whatever manner the plaintiff’s properties situ-ate, lying and being at No. 26, Sulu Gambari Road, Ilorin, as advertised in the auction notice, and announced on Televi-sion NTA, Ilorin on 13 October, 1992 between 7.25 and 7.30pm without compliance with the provisions of the law.

3. Declaration that the advertised auction notice and the sub-sequent announcement on NTA, Ilorin on 13 October, 1992 by the defendants purporting to sell the plaintiff’s property at 26, Sulu Gambari Road, Ilorin is defamatory of the plain-tiff, unlawful and of no effect.

4. Injunction restraining the defendants by themselves, their agents, servants/privies from selling, disposing or tamper-ing with the plaintiff’s properties situate, lying and being at 26, Sulu Gambari Road, Ilorin covered by Certificate of Occupancy No 14170.

5. The sum of N5,000,000 (Five Million Naira) being dam-ages suffered by the plaintiff as a result of the Defamatory acts of the defendants arising from the published notice and public announcements on the television on 13 October, 1992 and The Herald of 19 October, 1992, purporting to sell by auction the plaintiff’s properties at 26, Sulu Gambari Road, Ilorin.

6. The sum of N500,000 with 35% interest being accrued pro-fessional legal fees due to the plaintiff as a result of various legal services rendered to first defendant up till June, 1992.”

Pleadings were duly filed and exchanged by the parties. At the trial, the respondent gave evidence and called four wit-nesses. The appellants filed a joint statement of defence and called one witness.

It is the respondent’s case that having repaid the first loan of N10,000 on which a mortgage was secured, the title deed of the property should have been returned to him. He con-tended that the second loan of N50,000 was unsecured as


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the upstamped mortgage deed covering it does not contain the Governor’s consent as is required by law. The respon-dent observed that at the time the first appellant advertised and published the auction notice at public places, including the print and electronic media, the first appellant was owing him over N150,000 by way of professional fees. He how-ever admitted that he defaulted in repaying the second loan of N50,000.

The first appellant, on the other hand denied owing the re-spondent any legal fees. It however admitted that it has not paid for services of the respondent in respect of:– 1. recovery of debt from Yakubu Anifowose, a cus-

tomer, because there was no agreement between them on what it owed the respondent; and

2. the suit between it and a customer, one Salui Olayemi, because the respondent’s bill could not be traced.

After, hearing the parties and their witnesses and listening to the addresses of Counsel, the learned trial Judge entered judgment for the respondent as follows:– “1. It hereby declared that the defendants are not entitled to sell

by auction or in whatever manner the plaintiff’s properties situate, lying and being at 26, Sulu Gambari Road, Ilorin as advertised in the auction notice and announced on Television NTA, Ilorin on 13 October, 1992 between 7.25 and 7.30pm

2. It is hereby declared that the advertised auction notice and the subsequent announcement on NTA, Ilorin on 13 Octo-ber, 1992 and the Herald Newspaper of 19 October, 1992 by the defendants purporting to sell the plaintiff’s property at 26, Sulu Gambari Road, Ilorin is defamatory of the plain-tiff, unlawful and of no effect.

3. The defendants by themselves, their agents servants and/or privies are hereby restrained from selling, disposing or tam-pering with the plaintiff’s properties situate, lying and be-ing at 26, Sulu Gambari Road, Ilorin covered by Certificate of Occupancy No. 14170.

4. That the sum of N3 million (Three Million Naira only) damages be paid to the plaintiff for defamation.

5. That the sum of N150,000 (One hundred and fifty thousand naira only) with 35% interest being accrued professional


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legal fees due to the plaintiff as a result of various legal ser-vices rendered to the first defendant up till June, 1992 be paid to the plaintiff.”

The appellants were dissatisfied with the above judgment. They have appealed to this Court. The learned Counsel for the parties filed and exchanged their respective briefs of ar-gument. Both briefs were adopted and relied upon at the hearing of this appeal. The learned Counsel for the appellant formulated the following issues for determination:– “1. Whether the learned trial Judge was right in holding that the

further facility of N50,000 granted by the first appellant to the respondent based on the same security of landed prop-erty should have been approached by a fresh legal mortgage and not by upstamping, the one already created.

2. Whether the first appellant has a valid legal mortgage em-powering it to sell the mortgaged property where there has been a default of payment.

3. If the answer to the second issue is yes whether the respon-dent’s alleged unpaid professional fees which arose quite independently of the mortgaged debt are capable of stop-ping the first appellant from exercising its power of sale of the mortgaged property short of a full payment of the mort-gaged debt.

4. Whether the various advertisement to sell the respondent’s mortgaged property by auction amounted to defamation of the respondent’s character and whether the damages of N3 million awarded in favour of the respondent for defamation is sustainable?

5. Whether the respondent has fulfilled the condition prece-dent for bringing, an action to recover his entitlement to the N150,000 awarded him as unpaid professional fees?”

The learned Counsel for the respondent on the other hand formulated three issues which were adequately covered by the issues identified by the appellants. I will determine the appeal on the first four issues formulated by the appellants. I consider it therefore not necessary to reproduce the issues formulated by the respondent.

The respondent raised a preliminary objection in his brief of argument. The objection relates to grounds 4 and 6 of the Amended Notice of Appeal. He urged the court to strike


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same out. And, a fortiori, Issue 4 which emanates from the two grounds. I consider it necessary to start with the above preliminary objection. This is because, if the learned Coun-sel for the respondent is right in challenging the grounds, the grounds will be struck out and also the issue formulated therefrom.

The learned Counsel for the respondent in raising the objec-tion referred to paragraph 12 of the statement of claim. He reminded the court that the averment as to the high repute and integrity of the respondent was not denied by the appel-lants in their statement of defence. He submitted that the un-challenged evidence that the respondent is a national figure of high repute is conclusive. He cited the cases of Obembe v Wemabod Estates Ltd (1977) 5 SC. 115 and Okupe v Ife-membi (1974) 3 SC. 97 and others. The learned Counsel fi-nally submitted that it is wrong for an appellate court to en-tertain a ground or grounds of an appeal based on admitted and uncontroverted facts at the lower court, and, upon which a decision has been reached. In his view, a ground of appeal is incompetent when an appellant, as in this case, has no right to appeal against the decision which the grounds of appeal attack. He cited the cases of Tsokwa Motors (Nigeria) Ltd v Union Bank Ltd (1996) 9–10 SCNJ 294; (1996) 9 NWLR (Part 471) 129 and Shuaibu v Nigeria Arab Bank (1998) 4 SCNJ 1; (1998) 5 NWLR (Part 551) 582.

The reply of the learned Counsel for the appellants is that the objection is incompetent. He relied heavily on the case of Nsirim v Nsirim (1990) 3 NWLR (Part 138) 285 at 287.

I observe that the preliminary objection was not raised by way of a motion on notice so that argument can be heard on it. It was also not argued at the oral hearing of this appeal. The law is that a preliminary objection to the competence of a ground of appeal should be by motion on notice before the hearing of the appeal so that arguments on it can be heard by the court. In the present case, the notice of objection is in the respondents’ brief of argument. The respondent, however, did not indicate therein that leave to argue it will be sought at the hearing of the appeal. In addition, the respondent did


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not seek leave of the court to argue it at the oral hearing. (See Chief O.N. Nsirim v E.A. Nsirim (supra)). It follows that the preliminary objection is incompetent. This however does not mean that this Court will allow the appellants to commence an entirely new case Chief P.D.C. Okenwa v M.G. Imo State and 6 others (1996) 6 NWLR (Part 455) page 394.

I now proceed to deal with the above issues. On Issue one, it is the contention of the learned Counsel for the appellants that where the parties have set out the terms of their contract in a written document as in a deed of legal mortgage ie ex-hibits 2 and D2, an extrinsic evidence is not admissible to add to, vary from, or contradict, the terms so agreed upon. He cited the case of Okonkwo v C.C.B. (Nigeria) Plc (1997) 6 NWLR (Part 507) 48 at 62. He referred to the contention that a fresh legal mortgage should have been taken in respect of the further loan of N50,000, instead of, upstamping the legal mortgage already existing in respect of the first loan of N10,000. He submitted that if the recital in Ex D2 is read together with clause 3E in exhibit 2, it would have been ob-vious that there was no need for a fresh legal mortgage. He cited the case of Moses Ola and Sons (Nigeria) Ltd v B.O.N. Ltd (1992) 3 NWLR (Part 229) 337 at 389. In the learned Counsel’s view, the learned trial Judge was wrong to have relied on an oral evidence to contradict the terms agreed upon by the parties when he held as follows:–

“Going by the evidence of PW4 it appears to me that the loan of N50,000 later taken by the plaintiff should have been approached afresh, and not by upstamping a former deed of mortgage since the former loan has been fully paid. After all, DW1 has admitted that the loan of N50,000 granted to the plaintiff was a fresh transaction which requires a fresh consent of the government.”

He relied on the case of UBN Ltd v Ozigi (1994) 3 NWLR (Part 333) 385 at 400. He contended that if there is any dis-agreement between the parties to a written agreement as to the terms of their agreement, the authoritative and legal source of information for the purpose of resolving the dis-agreement is the written agreement itself. (See U.B.N. Ltd v Sax (Nigeria) Ltd (1994) 8 NWLR (Part 361) 150.) Finally


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the learned Counsel submitted that it will be unconscionable for the respondent to assert that a document he prepared, signed, sealed and delivered, in which he acknowledged his intention to be unconditionally bound by the provisions con-tained therein, is void. It is his view that the court should not allow the respondent to benefit from his wrongful act. (See Solanke v Abed (1962) 1 SCNLR 371; (1962) NSCC 160.)

The learned Counsel for the respondent contended in his brief of argument that the learned trial Judge was right in holding that the parties should have prepared a fresh legal mortgage to cover the loan of N50,000. He reminded the court that the loan of N10,000 which was covered by a legal mortgage, exhibit D1 in 1975, was fully paid before the loan of N50,000 was granted. The further loan of N50,000 he submitted was a fresh facility. To buttress his point, he re-ferred to the following pieces of evidence of DW1:– (1) “The plaintiff settled the loan of N10,000. The plaintiff was

granted another loan of N100,000 which he applied for but only N50,000 was approved. Exhibit 1 is the application for the loan.”

(2) “When a loan is fully paid the mortgage agreement lapses and the mortgagor is entitled to the release of his title docu-ments.”

(3) “There is upstamping when there is an existing mortgage. Upstamping occurs when the customer wants additional fa-cility to what he was earlier enjoying. However, money taken after the lapse of the earlier one would take a fresh transaction that will require a fresh mortgage. The loan of N50,000 applied for by the plaintiff in 1978 was based on a fresh transaction.”

Finally, on this point the learned Counsel for the respondent submitted that the Governor’s consent is necessary to put life into exhibit D2 and its absence is fatal to the document.

It is to be noted that the most essential nature of a mort-gage is that it is a conveyance of a legal or equitable interest in a property with a provision of redemption. That is, upon repayment of the loan, the conveyance shall become void or the interest shall be reconveyed.


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The evidence before the lower court is that at all material time to this suit the respondent was the external solicitor for the first appellant. In that capacity, he prepared all docu-ments in respect of the first loan of N10,000 and the second loan of N50,000, now the subject of this appeal. It is argued that the fact that the respondent did not collect his title documents or ask the first appellant to execute a deed of re-lease after he had fully repaid the first loan covered by ex-hibit D1, is not prejudicial to his case and cannot be con-strued to mean an intention to use same for future transac-tion. This would have been a very attractive argument, had it not been for the fact that in law it is generally accepted that a mere deposit of a title deed which cannot be accounted for in any other way, is taken as part performance of a contract to create a legal mortgage even when not a word about a con-tract has been said, such a deposit creates an equitable mort-gage.

There is evidence to show that the respondent is a very senior legal practitioner. Why then did he not ask for his title deed from the first appellant? Or, as the external solicitor, why did he not prepare a deed of release in respect of the mortgage documents? I hold that the answer can be found in exhibits D2 and 2.

It is instructive to examine the wordings of the recital to exhibit D2 and clause 3E of exhibit 2. They are as follows:– Recitals:– “Whereas the mortgagor had by a deed of legal

mortgage described in the second schedule hereto charged by way of legal mortgage the property de-scribed in the first schedule to secure an overdraft of N12,000 (Nigerian currency) from the Bank.

And Whereas the mortgagor and the Bank have agreed to increase the said overdraft to Fifty-five Thousand Naira (N55,000) (Nigerian currency) on the same se-curity of landed property but with increased im-provements and on the same terms and conditions, mutatis mutandis, and in addition as hereby agreed.”

Clause 3(e):– “This security shall not be considered as satisfied or

discharged by any intermediate payment of the whole or part of the moneys owing as aforesaid but


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shall constitute to and be a continuing security to the bank notwithstanding any settlement of account or other matter or thing whatsoever and shall be in addi-tion to and shall not operate so as in anyway to preju-dice or effect the security created by any deposit which may have already been made with the bank of the title deeds and writings relating to the said prop-erty or any other securities which the Bank may now or at any time thereafter hold for or in respect of the moneys hereby secured or any part thereof.”

It is the submissions of the learned Counsel for the respon-dent that the above provisions do not reflect, and, cannot be deemed to reflect the true positions of the transaction be-tween the parties. I do not accept the submission.

Under section 132 of the Evidence Act the only time an oral evidence is allowed to add to, vary, or contradict a writ-ten document is when the evidence is adduced to prove:– (a) fraud, intimidation, illegality, want of due execution,

etc; (b) the existence of any separate oral agreement as to a

matter on which the document is silent; (c) the existence of any separate oral agreement consti-

tuting a condition precedent to the attaching of any obligation under any such contract, etc;

(d) the existence of any distinct subsequent oral agree-ment to rescind or modify any such contract; and

(e) any usage or custom by which incidents not ex-pressly mentioned in any contract are annexed to contracts of that description, etc.

The record of proceeding does not show that there is evi-dence suggesting the existence of any of the above. In addi-tion I observe that this provision is confirmed by our case law. In the case of Chief B.A. Majekodunmi v Co-operative Bank Ltd and others (1997) 10 NWLR (Part 524) 198 it was held that where parties to an agreement have set out the terms thereof in a written document, extrinsic evidence is not admissible to add to, vary from, or contradict the terms of the written instrument. My answer to issue one in the


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light of the contents of the recital, clause 3E referred to above and other facts are in the negative.

On Issue 2, the learned Counsel for the appellant submitted that the original mortgage being a continuing security, what was needed was upstamp by exhibit 2 in view of the further facility granted. He placed reliance on the case of Moses Ola and Sons Ltd v B.O.N. Ltd (1992) 3 NWLR (Part 229) 337 at 389.

The learned Counsel for the respondent on the other hand submitted that the perfection of exhibit D2 was based on an instruction which the first appellant gave the respondent two years after the happening of the event to upstamp. The re-spondent complied with the instruction inspite of protest in order not to appear dubious. He finally submitted that it does not mean that the upstamping of the “original” mortgage was proper.

As has been stated earlier in this judgment, the wordings of the mortgage deeds relating to the properties at No. 26 Sulu Gambari Road, Ilorin are clear and unambiguous. It is there-fore not necessary to add to or subtract from them. In that case, it can be said that the provisions of the Land Use Act, 1978 were complied with. It follows that the original mort-gage being a continuing security what was needed was to upstamp it. There was no need to obtain a fresh consent of the Military Governor for the second mortgage. I answer Is-sue 2 in the affirmative. On the third issue the learned Coun-sel for the appellants submitted that in order to stop a mort-gagee’s power of sale of the mortgaged property, the sum owed must be paid in full. He relied on N.H.D.S Ltd v Mu-muni (1977) 2 SC. 57; Okonkwo v C.C.B. (Nigeria) Plc (1997) 6 NWLR (Part 507) 48, and Temco Eng. and Co Ltd v SBN Ltd (1995) 5 NWLR (Part 397) 607. The learned Counsel further submitted that a mortgagee’s power of sale cannot he affected because the amount due on the mortgage agreement is in dispute. Sabbagh, Assad v Bank of West Af-rica (1966) All NLR 234. Finally on this point, the learned Counsel reminded the court that the respondent did not deny owing the first appellant. In his view, as the issue of non


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payment of the respondent’s professional fees arose from a distinct transaction the two should not have been lumped together.

On the other hand, the learned Counsel for the respondent contended that the question of combining the two transactions in one suit was not canvassed in the lower court. Conse-quently, it does not form part of the judgment now appealed against. He added that courts do not condone multiplicity of actions. It is his view that actions which are related and affect or concern the same parties may be joined in one suit.

I observe that it is not in dispute that the respondent is in-debted to the first appellant in respect of the second loan. What is in dispute is the amount of indebtedness. I agree with the submission that a mortgagee’s power of sale or foreclosure cannot be affected merely because the amount under the mortgage agreement is in dispute.

It is settled that in order to stop the power of sale of the mortgaged property, the amount owed must be paid in full. (See Andrew Nweke Okonkwo v Co-operative and Com-merce Bank (Nigeria) Plc and others (supra).)

In the present case, the respondent is of the view that as the first appellant is owing him over N150,000 it should not have advertised the property for sale. The point has to be made that there is no evidence in the record to show the date on which the alleged debt was owed by the first appellant. The date on which the alleged debt of N150,000 was owed is important, because the law is that if the mortgage debt was not paid at any time fixed for payment the mortgagee is entitled to exercise his power of sale, the debt having been deemed to have become due and payable on that day. (See Nigeria Housing Dev Soc. Ltd v Mumuni (supra).)

Viewed from another angle, the law is that a person who seeks to enforce a contract must show that all the conditions precedent have been fulfilled and that he performed all the terms which ought to have been performed by him. (See Florence Coker v Gabriel Ajewole (1976) 9 and 10 SC. 50.) The question then is, did the respondent in this case perform


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all the conditions precedent to his earning the professional fees of N150,000?

To answer the question one has to look at the evidence be-fore the lower court. In paragraph 10, of the Statement of Claim, the respondent listed the names of the first appellant’s customers from whom he was instructed to recover debts. It is common ground that the respondent was entitled to 10% of all recoveries. It is also common ground that the respondent was not to be paid for writing demand letters. The evidence of the respondent is that the first appellant owed him N150,000 as professional fees. In answer to questions put to him on this point the respondent replied as follows:–

“I believe that S.K. Dan Alhaji had fully paid his debt to the bank because I heard nothing again from the bank. I am not aware that instruction was changed to Oniyangi and Co I have no instructions in this respect from the Bank. I do not know that S.K. Dan Alhaji is still owing the Bank up to N444,110.72. Since I have no con-trary instructions from the Bank I cannot know how much was paid.”

On the other hand, DW1 denied that the respondent was owed any professional fees. His evidence on this is as fol-lows:–

“I know one Alhaji, Dan Alhaji, who is also a customer from whom we asked the plaintiff to recover our money. When the plaintiff failed to act, we referred the case to Oniyangi and Co; who later obtained a judgment. One R.R. Oyewo is another cus-tomer who also owed the Bank N42,000. The recovery was re-ferred to the plaintiff who wrote the customer. His case is now be-fore the court at Offa. The plaintiff did not recover any money from Oyewo. The names read out to me as contained in paragraph 10(4) of the statement of claim are all our customers. Their cases were referred to the plaintiff for recoveries but the plaintiff failed to recover any thing. Yakubu Anifowoshe was also a customer who took us to court and the plaintiff was asked to defend the Bank. We have not paid the plaintiff for his services in this respect because of the disagreement on what to pay. The bill was submit-ted to us exhibit 24. Exhibit 24A is our reply. We used to pay 10% of any money recovered.”

Continuing, the witness said . . . “It is true the plaintiff defended us in the case of Saliu

Oloyemi v Bank of the North. We could not trace any bill


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submitted by the plaintiff in respect of that case. We are not owing the plaintiff any money. There was a letter dated 17 July, 1989 from the plaintiff to the first defendant. If I see the letter I can identify it. This is the letter exhibit 8. The last paragraph of exhibit 8 shows that the defendant does not owe the plaintiff any money.”

In my view the judgment of the learned trial Judge that (1) “. . . there is abundant evidence adduced by the plaintiff and

the only witness called by the defendants that the first defen-dant has not paid the plaintiff some of his professional fees.”

(2) “The only evidence stating the total sum of the indebted-ness is that of the plaintiff who put it at over N150,000 . . .”

(3) “The submission of the learned Counsel for the defendants that the plaintiff has failed to prove the accrued profes-sional fees is untenable in the face of the glaring evidence of DW1.”

cannot be justified by the above evidence. If anything, the evidence shows that the respondent’s claim is uncertain and unliquidated.

Finally I observe that even if the first appellant owed the respondent N150,000 as he claimed, the first appellant has no right to transfer that money from the respondent’s cur-rent account to his loan account. This is because the basis of a bank’s agreement with its customer is that the accounts kept by that customer should be kept separate. (See Ogun-deji v IBWA Ltd (1993) 2 NWLR (Part 278) 690.) For the above reasons I answer Issue 3 in the negative.

On Issue 4, it is submitted by the learned Counsel for the appellant that the exercise of power of sale by the first ap-pellant under the mortgage deed cannot by any stretch of imagination amount to a defamation of the respondent’s character. He placed reliance on the case of B.O.N. Ltd v Muri (1998) 2 NWLR (Part 536) 153. He reminded the court that the first appellant issued the necessary demand notices before embarking on the sale of the properties. He submitted that as it is common ground that the respondent was indebted to the first appellant at the time of the publica-tion, he is not entitled to the N3 million awarded to him for damages for a character he did not possess.


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The learned Counsel for the respondent argued that as the learned trial Judge declared exhibits 2 and D2 void, and up-held the claim for unpaid professional fees the award of N3 million for defamation arising from various advertisements of his property for sale cannot be faulted. He added that the defence of justification is therefore not available to the first appellant.

Finally, the learned Counsel submitted that as the respon-dent had paid his debt before the offending publications the first appellant is liable for libel as there was no basis for such publications. He relied on Wema Bank v Karunwi (1975) 1 SC. 15.

An imputation which may tend to lower the plaintiff in the estimation of right thinking members of society generally, or to expose him to hatred, contempt, or ridicule is defamatory of him. It is however a complete defence to an action of libel that the defamatory imputation is true. According to Gatley on Libel and Slander (7ed) this is because the plaintiff has no right to a character free from that imputation. And, if he has no right to it, he cannot in justice recover damages for the loss of it.

In the present case it is common ground that the respon-dent did not pay the mortgage debt at the time it was due and payable. The first appellant was therefore entitled to exercise it’s power of sale under the mortgage agreement. Conse-quently, the first appellant is entitled to the defence of justi-fication for the offending publications. In that case, the vari-ous advertisements to sell the respondent’s mortgaged prop-erties by auction cannot amount to defamation of the re-spondent’s character.

It follows therefore that the respondent is not entitled to the award of N3 million for defamation. In the light of the above, I answer Issue 4 in the negative.

For the reasons adumbrated above, the appeal succeeds and is allowed. The judgment of lbiwoye, J delivered on 15 May, 1997 is hereby set aside. I award the appellants N2,500 costs


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for this appeal and N2,000 for the trial in the lower court. The appeal is allowed. OKUNOLA JCA: I have had the privilege of reading in ad-vance the leading judgment of my learned brother Amaizu, JCA and I agree entirely with the reasons he gave for allow-ing the appeal. My learned brother has considered compre-hensively all the issues raised with the dexterity they de-serve.

For the same reasons ably stated, I also hereby allow the appeal and endorse the consequential orders, that of costs inclusive, made in the leading judgment. ONNOGHEN JCA: I have had the privilege of reading in draft, the judgment just delivered by my learned brother, P.I. Amaizu, JCA.

I agree with the reasoning and conclusion and have noth-ing to add.

I endorse the consequential order made therein. Appeal allowed.

[1999] 9 N.B.L.R. (COURT OF APPEAL, BENIN DIVISION)

Savannah Bank of Nigeria Plc v. Prime Management System Ltd 561

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Savannah Bank of Nigeria Plc v Prime Management System Ltd

COURT OF APPEAL, BENIN DIVISION SALAMI, MOHAMMED, IBIYEYE JJCA Date of Judgment: 10 JUNE, 1999 Suit No.: CA/B/302/97

Banking – Banker and customer relationship – Dishonour of Company’s cheques because of conflicting instructions from the Directors – Whether dishonour of customer’s cheque wrongful Damages – Wrongful dishonour of cheque – Award of dam-ages – When an Appellate Court will interfere therewith Facts The appellant which was the defendant at the Court below was a Banker to the respondent’s company which was the plaintiff. The respondent maintained current accounts with the appellant at its Ikeja and Warri Branches of the Bank. The cause of ac-tion in the suit arose because the appellant failed to honour cheques issued by the respondent on its current accounts in-spite of the fact that the respondent had sufficient funds to ac-commodate the various amounts on the cheques. A total of five cheques were involved all of which were duly presented to the appellant for payment but were dishonoured by the appellant. The respondent therefore sued the appellant at the Lower court and claimed N10,000,000 (Ten Million Naira) as general and special damages suffered by the respondent consequent upon the wrongful dishonour of the said cheques. The respondent’s action was based on the ground that the action of the appellant in the circumstances of the case was a breach of the mandate agreed upon between the appellant and the respondent on the mode of the operation of the accounts.

However, the appellant in its defence while admitting its action in dishonouring the appellant’s cheques, maintained that it was justified in doing so because the mandate was one countermanded by conflicting instructions received from the Directors of the respondent’s company as a result



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of the dispute between them in the running of the affairs of the company. The appellant also sought to justify its action on the order of Injunction from the Federal High Court which was then entertaining winding-up proceedings of the respondent’s Company filed by one of its Directors.

Held – 1. It is trite that in contractual relationship between a

banker and its customer, liability arises under the con-tract when a banker refuses to pay a customer’s cheque when the customer holds in his account with the Bank an amount equivalent to that endorsed on the cheque. In the instant case, the appellant having admitted that there were funds in the respondents current accounts at the time all the dishonoured cheques were drawn on the ac-counts and presented for payment and that the cheques were issued in accordance with the agreed mandate in operating the current accounts, the fact that there was then a dispute between the Directors of the respondent in the operation of the company can never provide any justification in law for the appellant to dishonour the cheques properly issued by the respondent in line with the existing mandate for the operation of the accounts.

2. An Appellate Court will alter an award of damages by a trial court only if the award is shown to be either mani-festly too high or manifestly too low or was made on a wrong principle. Such interference in the award of dam-ages by the trial Court may also be made by the Appel-late Court where it is convinced that the award of dam-ages is based on entirely erroneous estimate.

Appeal dismissed.


Nigerian ACB v Apugo (1995) 6 NWLR (Part 339) 65 Nsirim v Nsirim (1990) 3 NWLR (Part 138) 285 Obi v Owolabi (1990) 5 NWLR (Part 153) 702



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Nigerian rules of court referred to in the judgment Court of Appeal Rules, 1981, Order 3 Rule 15

Counsel For the respondent: A.O. Giwa

Judgment MOHAMMED JCA: (Delivering the lead judgment) This ap-peal is against the judgment of Obi J of the Delta State High Court of Justice sitting at Warri and delivered on 15 May, 1996.

The appellant which was the defendant at the court below is a banker to the respondent’s company which was the plaintiff. The respondent maintained current accounts with the appellant at its Ikeja and Warri branches of the bank. The cause of action in the suit arose because the appellant failed to honour cheques issued by the respondent on its cur-rent accounts inspite of the fact that the respondent had suf-ficient funds to accommodate the various amounts on the cheques. A total of five cheques were involved all of which were duly presented to the appellant for payment but were dishonoured by the appellant. The respondent therefore sued the appellant at the lower court and claimed N10,000,000 (Ten Million Naira) as general and special damages suffered by the respondent consequent upon the wrongful dishonour of the said cheques. The respondent’s action was based on the ground that the action of the appellant in the circum-stances of the case was a breach of the mandate agreed upon between the appellant and the respondent on the mode of the operation of the accounts.

However, the appellant in its defence while admitting its action in dishonouring the appellant’s cheques maintained that it was justified in doing so because the mandate was counter-mandated by conflicting instructions received from the Directors of the respondent’s company as a result of the dispute between them in the running of the affairs of the company. The appellant also sought to justify its action on the order of injunction from the Federal High Court which


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was then entertaining winding up proceedings of the re-spondent’s company filed by one of its Directors.

At the end of the hearing in the matter, the learned trial Judge Obi, J in his judgment delivered on 15 May, 1996 found for the respondent and granted it N500,000 damages against the appellant which was not satisfied with the judg-ment, hence this appeal.

In accordance with the rules of this Court, briefs of argu-ment were duly filed and served by the respective parties before the appeal came up for hearing on 15 May, 1999. Al-though the respondent’s brief filed on 21 July, 1998 con-tains on the first page a preliminary objection to the compe-tence of this appeal, the record of this Court does not show that the requirement of Order 3 Rule 15 of the Court of Ap-peal Rules, 1981 have been complied with before the pre-liminary objection was raised. The rule reads:– “15(1) A respondent intending to rely upon a preliminary ob-

jection to the hearing of the appeal shall give the appel-lant three clear days notice thereof before the hearing, setting out the grounds of objection, and shall file such notice together with seven copies thereof with the Reg-istrar within the same time.”

This rule is clearly mandatory and must be complied with by the respondent before arguments on the ground for the preliminary objection could be incorporated in the respon-dent’s brief of argument. The required notice of the prelimi-nary objection served within the required period is the foun-dation in law of any arguments that could be proffered in support of the grounds of the objection in the respondent’s brief if the preliminary objection is not taken up separately from the main appeal and ruled upon by this Court. (See Nsirim v Nsirim (1990) 3 NWLR (Part 138) 285; Obi v Owolabi (1990) 5 NWLR (Part 153) 702 and African Conti-nental Bank Ltd v Apugo (1995) 6 NWLR (Part 399) 65.) Therefore for the non-compliance with Order 3 Rule 15 of the Rules of this Court, I shall ignore the said Preliminary Objection to the hearing of this appeal contained in the re-spondent’s brief of argument.


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The two issues raised in the appellant’s brief for the de-termination of this appeal are:– (a) Whether the conduct of the appellant to dishonour

the cheques in question were totally without justifi-cation.

(b) Whether the award of N500,000 as damages is rea-sonable in the circumstances of the facts of this case.

Although the respondent in its brief of argument had at-tacked these issues as not being proper issues for the deter-mination of the appeal, it proceeded and responded to the arguments of the appellant in support of the same issues.

The first issue for determination is whether the conduct of the appellant to dishonour the cheques in question were to-tally without justification. This issue is not an issue at all be-cause its resolution will not affect the result of this appeal in one way or the other against the judgment of the lower court finding the appellant liable in damages for its breach of the respondent’s mandate in the operation of its current account with the appellant. Therefore even if the issues were re-solved in favour of the appellant, the fact that its conduct in dishonouring the cheques in question was not totally without justification is not enough to absolve the appellant of liabil-ity in damages for the breach of the mandate in favour of the respondent. In any case the appellant having admitted that there were funds in the respondent’s current accounts at the time all the dishonoured cheques were drawn on the ac-counts and presented for payment and that the cheques were issued in accordance with the agreed mandate in operating the current accounts, the fact that there was then a dispute between the Directors of the respondent in the operation of the company can never provide any justification in law for the appellant to dishonour the cheques properly issued by the respondent in line with the existing mandate for the op-eration of the accounts. It is trite that in contractual relation-ship between a banker and its customer, liability arises under the contract when a banker refuses to pay a customer’s cheque when the customer holds in his account with the Bank an amount equivalent to that endorsed on the cheque.


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(See Hirat Balogun v National Bank of Nigeria Limited (1978) All NLR 63 at 70; Ashubiojo v African Continental Bank (1966) 2 All NLR 203 and Union Bank of Nigeria Ltd v Ifeatu Augustine Nwoye (1996) 3 NWLR (Part 435) 135 at 142.) In the present case therefore on the relevant facts es-tablished by the respondent before the lower court, the ap-pellant was clearly liable in damages to the respondent for dishonouring the five cheques in question.

The second issue as formulated by the appellant is whether the award of N500,000 as damages is reasonable in the cir-cumstances of the facts of this case. It was argued for the appellant that even if it were liable to the respondent in damages, having regard to the circumstances of this case, the sum of N500,000 awarded by the lower court as dam-ages in favour of the respondent is too high because the evi-dence adduced by the respondent regarding the nature of its business management consultant alone is not enough to support the amount of damages awarded by the lower court.

Learned Counsel for the respondent however contended that there was enough evidence before the lower court to support the award made particularly at page 16 of the re-cord. That on the authority of the case of Balogun v Na-tional Bank of Nigeria Ltd (1978) 3 SC. 155, the evidence adduced by the respondent, coupled with the admission of the appellant that the respondent company was in business carrying on a trade, was enough to support the award of substantial damages to the respondent.

Indeed the law is very well settled on the attitude of appellate court to award of damages by the trial court. An appellate court will alter an award of damages by a trial court only if the award is shown to be either manifestly too high or manifestly too low or was made on a wrong principle. (See Ijebu-ode Local Government v Adedeji Balogun and Co Ltd (1991) 1 NWLR (Part 166) 136 and Elf (Nigeria) Ltd v Sillo (1994) 6 NWLR (Part 350) 258 at 274.) Such interfer-ence in the award of damages by the trial court may also be made by the appellate court where it is convinced that the award of damages is based on entirely erroneous estimate.


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(See Onaga and others v Micho and Co (1961) ANLR 324 at 328.) In the instant case where the appellant inspite of the lifting of the injunction by the Federal High Court on the operation of the respondent’s accounts, the appellant had continued to refuse to honour the respondent’s cheques, the award of the sum of N500,000 to the respondent in the cir-cumstances cannot be regarded as too high. This issue is thus resolved in favour of the respondent.

For the foregoing reasons this appeal fails and it is accord-ingly hereby dismissed. The judgment of the lower court de-livered on 15 May, 1996 is hereby affirmed.

There shall be Four Thousand Naira (N4,000) costs to the respondent. SALAMI JCA: I have had a preview of the judgment just de-livered by my learned brother, Mahmud Mohammed with which I entirely agree. I, too, dismiss the appeal and affirm the decision of the learned trial judge. I also endorse the or-der as to costs proposed in the lead judgment of my learned brother, Mahmud Mohammed, JCA. IBIYEYE JCA: I have had the privilege of reading in ad-vance the judgment just read by my learned brother, Mo-hammed, JCA. I agree that the appeal lacks merit and 1 also dismiss it. I abide by the consequential orders including the order for costs. Appeal dismissed.

[1999] 9 N.B.L.R. (COURT OF APPEAL, JOS DIVISION)


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Bank of the North Ltd v Alhaji Abba Satomi Saleh COURT OF APPEAL, JOS DIVISION EDOZIE, UMOREN, MANGAJI JJCA Date of Judgment: 15 JUNE, 1999 Suit No.: CA/J/85/96

Banking – Banker and customer relationship – Nature of – Customer suing bank – Alleging malpractices against bank’s staff – Whether staff to be made a party to the action Banking – Overdraft – Customer admitting receiving – Onus on him to prove repayment – How done Evidence – Admission – Of official of corporate body – Whether should be of his personal knowledge to be admissi-ble Limitation of Action – Action between bank and customer – When does time begin to run for purposes of Limitation Law Facts The appellant (Bank of the North) sued the respondent in the Lower Court for the sum of N2,041,078.73 being amount owed by the latter on the facilities granted him by the former, while the latter counter-claimed for the sum of N1,506,610k wrongly and negligently debited to his account.

The appellant’s case was that on or about 18 March, 1971 the respondent opened at the Maiduguri Branch of the appel-lant Bank a Current Account No. 400085 and was issued with a cheque book. As from that November, 1973 the appel-lant, at the instance of the respondent granted the latter over-draft facilities of N3,000 and a Licensed Buying Agent (“LBA”) facilities of N12,000. These facilities were subse-quently increased at the respondent’s request and by 1981 the respondent was enjoying a combined overdraft and L.B.A. facilities totalling N400,000 which he eventually disbursed.

In addition to the respondent’s main account no. 400085 aforesaid, the respondent opened and operated several other accounts including accounts nos. 410093, 410093B, 410095B, 410096A, 410096B, 4100986 and 505865 which


Bank of the North Ltd v. Alhaji Abba Satomi Saleh 569

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comprised current, overdraft, and LBA Accounts which were often closed at the end of each buying season and the balance thereof transferred to the main account. There was also a bad account no. 333027 opened on account of the re-spondent’s indebtedness which as at 30 September, 1988 stood at N2,041,078.73 inclusive of accrued interest and other related bank charges. The appellant Bank sent to the respondent regular statements of his accounts as well as written letters reminding him of his indebtedness to the ap-pellant. In 1985, he was summoned to appear before the “Bad Debts Recovery Committee” set up by the then Gov-ernment of the Northern States to recover debts owed to the appellant’s Bank.

Despite the respondent’s admission both orally and through several letters his indebtedness and undertaking to repay, he failed to do so. He had mortgaged to the appellant three of his properties valued at N239,000 as security for the outstanding debt but the Bank was unable to realise the se-curities due to their state of disrepair. To the surprise of the appellant, the respondent by his letter to the appellant dated 3 March, 24 May, and 11 July, 1988 denied his indebtedness and further alleged that the appellant Bank and or its ser-vants mishandled his accounts. After due investigation, the allegation was found to be baseless and the respondent duly informed by a letter dated 30 September, 1988.

On his own part, the respondent denied the appellant’s claim and asserted that it was the appellant that was indebted to him in the sum of N1,506,510k being the total amount of other cheques debited against his account without his au-thority.

The Lower Court dismissed the appellant’s case and found for the respondent on his counter-claim. Dissatisfied with the judgment the appellant appealed to the Court of Appeal contending, inter alia, that they had adduced overwhelming evidence to obtain judgment and that the action of the re-spondent against them should have been dismissed having been brought out of time.



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Held – 1. The respondent in this case having admitted being

granted facilities to the tune of N400,000 by the appel-lant, there is no burden on the appellant to prove that which has been admitted. On the contract it is the re-spondent who asserted repayment who has the burden of proving such repayment.

2. No doubt a mere “ipse dixit” is evidence admissible but it is evidence resting on the assertion of one who made it. Where there is need for further proof, mere “ipse dixit” may not be enough. In the instant case, the re-spondent by the mere “ipse dixit” evidence adduced by him not supported by any bank tellers, credit notes, etc had failed to discharge the burden of establishing re-payment of the credit facilities granted to him by the ap-pellant.

3. It is trite law that the mere fact that an official of a cor-porate body was not present when a particular transac-tion took place does not affect the cogency of the evi-dence of such official.

4. Admissions are not estoppel and not conclusive against a party against whom they are tendered. He always has the right to prove the circumstance or to show that they were due to erroneous conception of the law, or igno-rance of the real fact or other circumstances which suffi-ciently explain them. It is however for the trial Court to decide the issue and to give due weight to the alleged admissions and the explanatory facts or circumstances.

5. Per curiam “The only apparent explanation the respondent has given for the admissions is that his accounts had been mishandled but the ap-pellant Bank had debunked this allegation and has tendered ex-hibits E1–E35 as the correct statement of account relating to the respondent’s account with it. These accounts had not been falsi-fied. The respondent has not been able to pin-point at any entry therein that is false even with all the cheques exhibits J1–J820 he issued made available to him. The allegation of mishandling appears to be a mere subterfuge to avoid repayment. I will say more on this. In the light of the foregoing, I resolve the issue



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under consideration in favour of the appellant and hold that it had led sufficient credible evidence to be entitled to judgment to his claim.”

6. The relationship between banker and customer is a con-tractual one of Debtor and Creditor. Unless the contrary is agreed, a demand by the Customer is condition prece-dent to repayment whether the money is on current or deposit account. Accordingly, time runs from the date of demand and not from the date the account was opened.

7. When a banker credits the current account of its cus-tomer with some money, the banker becomes a debtor to the customer in that sum. Conversely when a banker debits the current account of its customer with a certain sum, the customer becomes a debtor to the Bank in that sum. Therefore whichever party is the Creditor is enti-tled to sue the other if demand for payment was made but not honoured.

8. It is the law that a plaintiff who conceives that he has a cause of action against a particular defendant is entitled to pursue his remedy against that defendant only and should not be compelled to proceed against that other persons whom he has no desire to sue. Since the present case arose out of customer/banker relationship which is founded on contract, the employees against whom alle-gations of impropriety were made could not be joined as parties, since they were not parties to the contract be-tween the customer and the Bank.

Appeal allowed.


Nigerian Allied Bank of Nigeria Ltd v Akabueze (1997) 6 NWLR (Part 509) 374 Bank of the North Ltd v Akorede (1995) 1 NWLR (Part 374) 762 Debs v Cenico (Nigeria) Ltd (1986) 3 NWLR (Part 32) 846; (1986) 6 SC. 179



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Insurance Brokers of Nigeria v Atlantic Textile Man. Co Ltd (1996) 8 NWLR (Part 466) 316 Iyimoga v Governor of Plateau State (1994) 8 NWLR (Part 360) 73 Kate Enterprises Ltd v Daewoo (Nigeria) Ltd (1985) 2 NWLR (Part 5) 116 Okai v Ayika II 12 W.A.C.A. 31

Counsel For the appellant: D.M. Mand, Esq. (Holding the Brief of Kayode Olatunde) For the respondent: L.O. Sanyaolu, Esq.

Judgment EDOZIE JCA: (Delivering the lead judgment) This is an ap-peal against the judgment of the Borno State High Court de-livered on 25 May, 1996 in respect of two consolidated suits, viz. Suit No. M/166/88 and Suit No. M/32/89 involv-ing the same parties and arising from the same transaction or series of transactions.

In the former case, that is Suit No. M/166/88 the appellant Bank was the plaintiff and as reflected in paragraph 21 of the statement of claim, it claimed against the respondent as the following reliefs:– “21. Wherefore, the plaintiff claims from the respondent the sum

of N2,041,078.73 (Two Million, Forty-one Thousand and Seventy-eight Naira, Seventy-three Kobo) being the balance due from him on the facilities granted to him by the plaintiff inclusive of accrued interest and other Bank charges thereon as at 30/9/88; plus interest thereon at the rate of 17% p.a. from first October, 1988 till the day of final payment of the judg-ment debt to be obtained herein in addition to the costs of this suit.”

And in the later suit, that is Suit No. M/32/89, the respon-dent herein was the plaintiff who sued the appellant as de-fendant claiming as per paragraph 13 of his statement of claim the following reliefs:– “13(a) A declaration that the removal of the total of

N1,506,610,00k by the agents and/or servants of the


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fendant from the 3 accounts Nos. 400085, License Buy-ing Agents No. 410093B and 410096B of the plaintiff through payments in cheque not issued or authorised by the plaintiff is wrong, null and void.

(b) A declaration that the defendant by the acts of its ser-vants or agents has breached and (sic) sacred relation-ship between a bank and its customer.

(c) An order that defendant should repay to the plaintiff the total sum of N1,506,610k wrongly and negligently deb-ited from Account Nos. 400085, License Buying Agents Account No. 410096B and 410093B.

(d) Nl00.000 general damages.”

After the exchange of pleadings and consolidation of the two suits, trial commenced in the course of which evidence was led and numerous documents tendered and admitted as ex-hibits.

Based on the pleadings and evidence led at the trial, the facts of the case may be summarised as follows: The appel-lant is a banker with its Head Office in Kano and a Branch Office in Maiduguri, Borno State. The respondent, a cus-tomer of the appellant Bank is a businessman and a licensed buying agent based in Maiduguri and carrying on business under the name and style of “Alhaji Abba Satomi Saleh and Sons”. The appellant’s case is that on or about the 18 March, 1971 the respondent opened at the Maiduguri Branch of the appellant Bank a current account No. 400085 and was issued with a cheque book. As from that November, 1973 the ap-pellant, at the instance of the respondent granted the latter overdraft facilities of N3,000 and a Licensed Buying Agent (“LBA”) facilities of N12,000. These facilities were subse-quently increased at the respondent’s request and by 1981 the respondent was enjoying a combined overdraft and L.B.A. facilities totalling N400,000 which he eventually disbursed.

In addition to the respondent’s main account no. 400085 aforesaid, the respondent opened and operated several other accounts including accounts nos. 410093, 410093B, 410095B, 410096B, 410098B, 4100986 and 505865 which comprised current, overdraft, and LBA Accounts which


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were often closed at the end of each buying season and the balance thereof transferred to the main account. There was also a bad account no. 333027 opened on account of the re-spondent’s indebtedness which as at 30 September, 1988 stood at N2,041,078.73 inclusive of accrued interest and other re-lated bank charges. The appellant Bank sent to the respondent regular statements of his account as well as written letter re-minding him of his indebtedness to the appellant. In 1985, he was summoned to appear before the “Bad Debts Recovery Committee” set up by the Government of the then Northern States to recover debts owed to the appellant’s Bank.

Despite the respondent’s admission both orally and through several letters of his indebtedness and undertaking to repay, he failed to do so. He had mortgaged to the appel-lant three of his properties valued at N239,000 as security for the outstanding debt but the Bank was unable to realise the securities due to their state of disrepair. To the surprise of the appellant, the respondent by his letter to the appellant dated 3 March, 24 May, and 11 July, 1988 denied his in-debtedness and further alleged that the appellant Bank and or its servants mishandled his accounts. After due investiga-tion, the allegation was found to be baseless and the respon-dent duly informed by a letter dated 30 September, 1988.

On his own part, the respondent denied the appellant’s claim and asserted that it is the appellant that is indebted to him in the sum of N1,506,510k being the total amount of eight cheques debited against his account without his au-thority. The accounts debited are no. 400085, no. 410096B and no. 410093B.

It is the respondent’s case that he opened and operated a main account no. 400085 in respect of which the appellant Bank granted him a total of overdraft facility of N150,000. He also maintained a Licensed Buying Agent Accounts in re-spect of which the appellant granted him a total of N250,000. These sums of money totalling N400,000 were the only money granted to him by the appellant between 1973 and 1981 and between 1979 and 1982 he fully repaid the amount. He denied there were balances in any of the LBA accounts


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which were transferred to his main account. He denied opening BAD account No. 333027 as well as receiving regular state-ment of account from the appellant Bank and admitting indebt-edness to the Bank. The respondent further asserted that al-though he was not indebted to the appellant, he was made to appear before a Special Military Tribunal which detained him for 30 days. Subsequently, he was dragged to the Bad Debts Recovery Committee and was made to pay the sum of N200,000 under duress. He later discovered that officials of the appellant’s Bank especially Mr Chawai the Branch Ac-countant and Mr Taiwo, Assistant Manager Maiduguri Branch had between 1982 and 1983 manipulated the respondent’s Ac-counts as a result of which the officials were retired.

Upon the foregoing, the learned trial Judge Oye Adefila, J on 25 May, 1995 dismissed the appellant’s case and entered judgment for the respondent. Aggrieved thereby the appel-lant lodged the instant appeal upon a Notice of Appeal dated 8 June, 1995 based on two original grounds of appeal. With the leave of this Court an Amended Notice of Appeal con-taining ten grounds of appeal was filed. Based on these grounds of appeal the appellant’s brief of argument identi-fied the following five issues for determination:– (1) Whether or not in the circumstances of this case the

learned trial Judge was right in rejecting in evidence the respondent (sic) specimen card marked exhibit P rejected when same was duly pleaded and relevant to the case.

(2) Whether or not the learned trial Judge was not in er-ror in refusing to enter judgment in favour of the ap-pellant on its claim of recovery of respondent out-standing debt on credit facilities enjoyed by him and in dismissing same.

(3) Whether or not the respondent’s claim in Tort which arose in 1980–1982 in (sic) Not Statute Barred and whether the claim is competent.

(4) Whether or not the failure of the respondent to join the alleged tort feasors Mr Taiwo and Alhaji Chawai in this suit is not fatal to the respondent’s claim against the appellant.


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(5) Whether or not the judgment entered in favour of the respondent for the sum of N1,506,610 and 21% in-terest thereon from 5 April, 1990 until the judgment debt is liquidated is proper and if so whether the re-spondent proved this claim by credible evidence.

In the brief filed on behalf of respondent, similar issues to those raised by the appellant were also formulated thus:– (1) Whether or not in the circumstances of this case the

learned trial Judge was right in rejecting exhibit P? (2) Whether having regard to the evidence before the

court, the learned trial Judge was right in dismissing the appellant’s claim?

(3) Whether or not having regard to the pleadings and evidence the respondent’s claim was statute barred?

(4) Whether or not the non-joinder of Mr Taiwo and Alhaji Chawai is fatal to the respondent’s claim.

(5) Whether or not the judgment given in favour of the respondent is proper having regard to the pleadings and evidence?

In respect of Issue No. 1 in the parties’ brief which deal with the admissibility of the documents marked P rejected, the appellant has in paragraph 4 of the statement of claim in Suit No. M/166/88 pleaded, inter alia, that on or about 18 March, 1971, the respondent opened a current account no. 40005 at its Maiduguri branch, and that it would rely among other documents on the respondent’s specimen signature card. The appellants’ witness no. 2, one James Adelobage-kun was the leader of the team set up by the appellant to in-vestigate the respondent’s complaint about the mishandling of his account. He was at the time working in the appellant’s Headquarters in Kano. He enumerated the documents the team inspected such as the relevant statement of accounts, cheques, the respondent’s specimen signature card, etc In order to lay foundation for tendering the specimen card, the witness on page 30 lines 5 to 10 testified thus:–

“The signature card was one of those I referred to. It was sent to the Branch Manager. I can’t see the original but the photocopy. We can’t find the original. We make (sic) all efforts to get the


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original but we can’t (sic) get. The original is presumed lost. It was not found. I came with the photocopy.”

In upholding an objection to the admissibility of the docu-ment, the court below ruled at page 30 lines 15 to 17 thus:–

“The witness has not seen the original. He has not had the oppor-tunity of comparing the original with the duplicate. It should be marked ‘P’ rejected.”

In criticising the rejection of the document, it was submitted in the appellant’s brief that the proper foundation had been laid vide section 96(1c) and 96(2e) of the Evidence Act. It was further contended that the basis of admissibility of any document which is not inadmissible in any event is rele-vancy and that once a document is relevant to a case and duly pleaded it ought to be admitted. The following cases were cited in support Garba Audu and another v Salomoun Ahmed (1990) 5 NWLR (Part 150) 287 at 288; Agunbiade v Sasegbon (1968) N.M.L.R. 223; Oyediran v Alebiosu II (1992) 6 NWLR (Part 249) 550 and Nigeria Arab Bank Ltd v Shuaibu (1991) 4 NWLR (Part 186) 450 at 453–454. It was Counsel’s view that the court below was in error to have rejected the respondent’s specimen signature card which is very relevant to the appellant’s case as it would have shown the similarity in the respondent’s signature with other docu-ments emanating from and signed by him.

In reply to the above submissions, Counsel to the respon-dent contended in his brief that the objection to the admissi-bility of the document in question was that the evidence PW2 gave quoted above was merely hearsay and referring to a passage in the case of Nigeria Arab Bank Ltd v Shuaibu (1991) 4 NWLR (Part 186) 450, he submitted that there was a compelling reason to exclude the document. It was con-tended that for a document to be admissible under the provi-sions of section 91(1)(a)(i) and (b) including the proviso thereto, the document must be tendered by a person who can give direct oral evidence of the contents of the document. Finally, Counsel argued that even if the document had been admitted, the decision of the court below would have been the same.


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Before dealing with the merit of the issue under considera-tion, let me pause to comment albeit briefly on the propriety of the issue as formulated by the parties. In the practice of brief writing, an issue for determination for the purposes of an appeal is a substantial question of law or of fact or both arising from the grounds of appeal filed in the appeal which when resolved one way or the other will affect the result of the appeal (see Chief S.A.Y. Imonikhe v The Attorney-General of Bendel State and others (1992) 6 NWLR (Part 248) 396 at 407.) While an issue may thus involve a dispute about facts, a mere dispute about facts divorced from their legal consequences is not an “issue” (see African Petroleum Ltd v Owodunmi (1991) 8 NWLR (Part 210) 391 at 410.) In the instant case the determination one way or the other of the question whether the court below was right to have re-jected the document marked “P”, may not necessarily have the legal consequence of affecting the result of the appeal. This is so because, even if it is decided that the rejection of the document is erroneous, by section 227(2) of the Evi-dence Act, 1990 the wrongful exclusion of evidence shall not of itself be a ground for the reversal of any decision in any case if it shall appear to the court on appeal that had the evidence so excluded being admitted it may reasonably be held that the decision would have been the same.

By the foregoing as it may, it is trite law that the bases of admissibility is relevance. In the case of Dr Torti v Chief Ukpabi (1984) 1 SCNLR 214, (1984) ANLR 185 Eso, JSC put the matter succinctly thus:–

“The issue is admissibility, I think admissibility should be based on relevance and not proper custody. Once a matter be it docu-ment or oral evidence is relevant it is admissible. Proper custody only raises the issue of presumption or to put it more clearly, the weight to be attached to the evidence documentary or other after admission. For evidence, documentary or otherwise to be admissi-ble it is sufficient that proper ground of its relevance is laid.”

The document marked “P” was rejected not because it was not relevant but because DW2 had not the opportunity of comparing it with the original. By section 97(1)(c) of the Evidence Act, secondary evidence may be given of the


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existence, condition or contents of a document when the original has been destroyed or lost and in the latter case all possible search has been made for it. And by section 97(2)(a) of the aforesaid Evidence Act, the secondary evi-dence admissible in respect of the original referred to in sec-tion 97(1)(c) is any secondary evidence of the contents of the document. This in my view includes a photocopy of the original such as the document marked P rejected. The PW2 having given evidence that the original copy was lost, it is my view that the document ought to have been admitted. Learned Counsel for the respondent referred to a passage in the case of Nigeria Arab Bank Ltd v Shuaibu (supra) where at page 465 Ndoma-Egba, JCA, opined thus:–

“Although admissibility and relevance are distinct concepts in the law of evidence, the former being a question of law and the latter of fact, by section 8 of the Evidence Act what is relevant is admis-sible unless there are compelling reasons to exclude it or that the evidence is hearsay.”

Learned Counsel then contended that the evidence of DW2 in respect of the document was hearsay hence the rejection. With respect, Counsel appears to misconceive the principle of law stated in the extract of the Arab Bank case quoted above which is that a relevant piece of evidence will be ex-cluded if it is hearsay. The document marked “P” rejected does not contain hearsay evidence to render it inadmissible nor is there any compelling reason why it should be ex-cluded. But had the rejection of the document caused a mis-carriage of justice? I think not. The relevance of the docu-ment was to establish that the admitted signature therein is the same as disputed signatures in eight cheques which the respondent alleged was wrongly debited against his account and thus confirm that the cheques were issued by the re-spondent. There were other documents through which that fact could have been established. The PW1, Kyari Gadzama, tendered 820 cheque leaves which the appellant admitted he drew on his account. The cheques were admitted as exhibits J1–J820. The respondent’s signature thereon could have been used as a substitute of the document marked P. I will resolve this issue in favour of the appellant.


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The second issue poses the question whether the dismissal of the appellant’s case was proper. On this, it was submitted in the appellant’s brief that the respondent’s indebtedness to the appellant was established by credible evidence and ad-missions by the respondent to be entitled to judgment for the sum of N2,041,078,73 being the balance of the respondent’s debt on credit facilities enjoyed by him as at 30 September, 1988 plus 17% interest thereon from 1 October, 1988 until final liquidation of the debt as well as costs of the action. In reply learned Counsel for the respondent contended in his brief that the appellant failed woefully to prove its assertion judging from the evidence adduced. For a better apprecia-tion of the issue in controversy between the parties, it will be pertinent to refer to some paragraphs of the pleadings filed by the parties. At paragraph 7 of the appellant’s state-ment of claim in Suit No. M/166/88 it was averred thus:– “7. The plaintiff avers that over the years these overdrafts and

L.B.A. facilities have been renewed and increased at the defendant’s own request at the rate of interest prevailing from time to time, such that by 1981 the defendant was en-joying a combined overdraft and L.B.A. facilities totalling N400,000 which facilities the defendant fully utilised each time by drawing cheques on his account which were duly honoured by the Bank. The defendant at times also applied for short term loans. The plaintiff will at the trial of this ac-tion tender in evidence all the defendant’s applications and/or request for the said overdraft facilities, loans and/or other financial assistance . . .”

In reply to the above, the respondent, in paragraph 8 of his statement of defence in the same suit averred thus:– “8. The defendant admits paragraph 7 of the statement of claim

and avers as follows:– (a) That on current account no. 400085 he was given a

total overdraft of N150,000 on (sic) all the License buying agents account N200,000 for cotton and N50,000 for groundnuts.

(b) That the facilities in paragraph (a) above were granted to the defendant by the plaintiff between 1973 and 1981.

(c) That for those facilities the defendant wrote applica-tions which were granted by the plaintiff also in writ-ing.


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(d) That the defendant between 1979 and 1982 paid back to the plaintiff the total sum of over N400,000 in full and final settlement of his indebtedness.

(e) The total sum of N400,000 were the only facilities ever granted to the defendant by the plaintiff.

(f) The defendant stopped being a License Buying agent in 1982.

The defendant shall at the trial rely on all his relevant applications as averred above and all the other relevant bank documents showing that he paid back to the plaintiff the sum of N400,000.”

Generally, the onus of proof in civil cases lies on the plain-tiff to satisfy the court that he is entitled on the evidence ad-duced by him to the claim he asserts and that he must rely on the strength of his case and not on the weakness of the de-fence. It is also the law that in civil cases the onus probandi rests upon the party who would fail if no evidence at all or no more evidence, as the case may be, were given on either side. Such onus probandi therefore rests before evidence is gone into upon the party asserting the affirmative of the is-sue and it rests after evidence is given upon the party against whom the court at the time the question arises would be given judgment if no further evidence were adduced (see In-surance Brokers of Nigeria v Atlantic Textiles Manufactur-ing Company Ltd (1996) 8 NWLR (Part 466) 316 at 318). As was decided in the case of Onobruchere v Esegine (1986) 1 NWLR (Part 19) 799, (1986) 1 All NLR (Part 1) 238 at 343, the onus or burden of proof is merely an onus to prove or establish an issue. There cannot be any burden of proof where there are no issues in dispute between the par-ties. Thus if the plaintiffs claim is admitted that will be the end of the story. Similarly, if a particular averment of the plaintiff is admitted, there will no longer be an onus to prove what has been admitted.

Looking at the parties’ pleadings reproduced above, it is clear to me that the respondent having admitted being granted overdraft facilities to the tune of N400,000 by the appellant there is no burden on the appellant to prove that which has been admitted. On the contrary, it is the


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respondent who asserted repayment who has the burden of proving such repayment. How then did he discharge that burden? At page 37 lines 2 to 19, lines 26 to 29, the respon-dent testifying in chief as DW2 stated:–

“I used to enter money realised from contract, supply in account no. 400085. I was a contractor at Yerwar Secondary School. They were paying the Government N100,000, N50,000 or N150,000 at times. I was given a contract also in 1981 for N350,000. I paid into account no. 400085. I also got two contracts from Ramat Polytechnic which was N250,000 and the other N400,000. I was also given a contract of N150,000 to build three bedroom house. I paid all these amount into my account no. 400085. I was paid an amount of N1,280,000 I paid the amount into 400085. I was also given a contract for fencing for N100,000. I paid the amount into 400085. . .”

Apart from the fact that the above payments were not spe-cifically pleaded, no documentary evidence was tendered as evidence of the payments despite the respondent’s averment in paragraph 8 of his statement of defence quoted above that he would rely on “all the other relevant bank documents showing that he paid back to the plaintiff the sum of N400,000”. It is my candid view that the respondent by the mere “ipse dixit” evidence adduced by him not supported by any bank tellers, credible notes etc had failed to discharge the burden of establishing repayment of the credit facilities granted to him by the appellant.

Notwithstanding the foregoing, the appellant, through its three witnesses tendered the following documentary evi-dence to prove the respondent’s indebtedness:– 1. Exhibits A, B1–B42, C, D1–D52 – the respondent’s

ledgers containing entries of all transactions in his accounts and the amount of the overdraft loan ob-tained and outstanding against him.

2. Exhibits E1–E35 copies of the respondent’s state-ment of account.

3. Exhibits F1–F2 – demand letters sent to the respon-dent for payment of his outstanding debt which as at 27 October, 1988 showed a debit balance of N2,057,827.051.


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4. Exhibits G1–G 15 – respondent’s and his agents’ let-ters admitting the debt and asking for time to pay same.

5. Exhibits H1–H2 are respondent’s letters admitting the reconciled figures of indebtedness and pleading for time to pay as well as requesting for more loan and credit facilities.

6. Exhibits J1–J820 and R1–R5 are the cheques used in withdrawing money from the respondent’s accounts.

7. Exhibits K1–K2 are the Deed of Legal Mortgage created by the respondent over his properties as se-curity for the debt.

8. Exhibit L a letter from the appellant to the respon-dent confirming after due investigation the respon-dent’s investigation.

9. Exhibits P1–P9 being the respondent’s applications for credit facilities.

Despite the plethora of documentary evidence listed above which the appellant tendered in proof of its case, the learned trial Judge dismissed its case. In so doing, he gave three main reasons – firstly, that none of the three witnesses PW1, PW2, and PW3 was there when the respondent opened the account with the Bank; secondly, that he believed the re-spondent paid the amounts he claimed he paid and thirdly, that the respondent’s complaint about the manipulation of his account as confirmed by DW1 was true. It is trite law that the mere fact that an official of a corporate body was not present when a particular transaction took place does not affect the cogency of the evidence of such official. (See the case of the Kate Enterprises Ltd v Daewoo Nigeria Ltd (1985) 2 NWLR (Part 5) 116.) No doubt, a mere “ipse dixit” is evidence admissible but it is evidence resting on the asser-tion of one who made it. Where there is need for further proof, mere “ipse dixit” may not be enough. (See Ahmed Debs and another v Cenico (Nigeria) Ltd (1986) 3 NWLR (Part 32) 846, (1986) 6 SC. 179 at 192.) In the instant case where the appellant is saying that the respondent has not


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repaid the overdraft granted to him and has tendered state-ments of accounts. Exhibits E1–E35 showing the out-standing amount, the respondent’s mere “ipse dixit” evi-dence of repayment is insufficient proof thereof. The re-spondent (DW2) made a heavy weather of the manipulation of his account. This was confirmed by DW1 Ade Ashipa a retired employee of the appellant who testified that the re-spondent’s account could not be reconciled because they were badly manipulated by the officials of the Bank. But there was the evidence of PW1 and PW2 that when the re-spondent as per his letters exhibits Ql and Q2 complained about the mishandling of his account, the complaint was duly investigated and found to be baseless and the respon-dent duly informed as per the appellant’s letter exhibit “L”. The court below did not appear to have adverted to the ap-pellant’s side of the case or if it did, it did not give any rea-son why it preferred the respondent’s version. A Judge of trial is in a pre-eminent position to make findings of facts based on the evidence before him. When this exercise is properly done, an appellate court cannot interfere to change the findings. But when a trial Judge abdicates the sacred duty or when he demonstrates that he has not taken proper advantage of his having heard and seen a witness testify, the matter is at large for the appellate court. (See Michael Ro-maine v Christopher Romaine (1992) 4 NWLR (Part 238) 650; (1992) 5 SCNJ 25 at 27.) I am of the firm view that the three reasons relied upon by the court below in dismissing the appellant’s case are not cogent.

As noted earlier the appellant in proving its case tendered exhibits H1–H2 which are respondent’s letters admitting the reconciled figures of his indebtedness. Exhibit 42 dated 11 November, 1982 reads, inter alia:–

“Area Manager, Bank of the North, Maiduguri Branch. RE: MY O/D-LBA A/Cs in your Branch Following our discussion on the above subject-matter jointly held on the 26 October, 1982 in your office, I have resolved to agree


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with the O/D liability figure shown in my accounts as at 9 Octo-ber, 1982. I have also decided to operate all my accounts in this branch in full and hope to liquidate all my outstanding liabilities soon with the Bank’s co-operation and assistance. As such I wish to draw the attention of the Bank to some of the steps I have adopted towards speedy liquidation of any outstanding Accounts. I wish the Bank can reason with me and consider my genuine steps, motives and intentions and further approved me a loan of N2 mil-lion when I have implemented these steps to the bank’s satisfac-tion. Yours faithfully, Signed Alh. Abba Satomi Saleh.”

Again in exhibit H1 dated 29 November, 1982 referring to exhibit H2, the respondent said:–

“The Area Manager, Bank of the North Ltd, Maiduguri Branch, Dear Sir, With reference to my letter dated 11 November, 1982, I agree to liquidate my debts from the following sources:–

Sources Amount for Bank (a) Construction Contract N 656,250,00 (b) Produce Business N 212,000.00 (c) School Food Supply N 168,000.00

N 1,036,250.00 Why I need Additional loan from the bank. To finance Basalah Ind. Ltd, a company wholly owned by me to production level. Yours faithfully, Signed. Alh Abba Satomi Saleh.”

It is conceded as rightly submitted by learned Counsel for the respondent that admissions are not estoppels and are not conclusive against a party against whom they are tendered. He always has the right to prove the circumstance or to show that they were due to erroneous conception of the law, or ig-norance of the real fact or other circumstances which suffi-ciently explain them. It is however, for the trial court to de-cide the issue and to give due weight to the alleged admis-sions and the explanatory facts or circumstances.


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(See Okai II v Ayika II 12 W.A.C.A. 31 and Insurance Bro-kers of Nigeria v Atlantic Textile Manufacturing Company Ltd (supra.))

The only apparent explanation the respondent has given for the admissions is that his accounts had been mishandled but the appellant bank had debunked this allegation and has tendered exhibits E1–E35 as the correct statement of ac-count relating to the respondent’s account with it. These ac-counts had not been falsified. The respondent has not been able to pin-point at any entry therein that is false even with all the cheques, exhibit JI–J820 he issued made available to him. The allegation of mishandling appears to be a mere subterfuge to avoid repayment. I will say more on this. In the light of the foregoing, I resolve the issue under consid-eration in favour of the appellant and hold that it had led sufficient credible evidence to be entitled to judgment to his claim. With respect to the third issue for determination deal-ing with limitation of action, reference was made to the re-spondent’s claim in Suit No. M/32/89 which was that the agents and or servants of the appellant had wrongly and negligently between 1980 and 1982 debited his three ac-counts to the tune of N1,506,610. It was submitted in the appellant’s brief that since the cause of action arose between 1980 and 1982 and the suit instituted on 21 February, 1989 a period of over 6 years from the accrual of the action the action is statute barred by virtue of the English Statute of Limitation, 1623 a statute of general application made ap-plicable to Borno State by virtue of section 28 of the High Court Law, Laws of Northern Nigeria applicable to Borno vide the case of Murmansk State Steamship Line v Kano Oil Millers Ltd (1974) N.M.L.R. 58 at 59.

Where the law provides for the institution of an action within a prescribed period, proceeding will not be brought after the time prescribed by the Statute for any action that is commenced after the stipulated period is totally barred since the right of the injured person to commence the action has been extinguished by law (see Egbe v Adefarasin (No. 1) (1985) 1 NWLR (Part 3) 549.) The relationship between banker and customer is a contractual one of debtor and


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creditor. Unless the contrary is agreed, a demand by the cus-tomer is a condition precedent to repayment – whether the money is on current or deposit account. Accordingly time runs from the date of the demand and not from the date the account was opened. The Supreme Court in Allied Bank of Nigeria Limited v Jones Akubeze (1997) 6 NWLR (Part 509) 374 at 397 at 409–410 stated that when a banker credits the current account of its customer with some money, the banker becomes a debtor to the customer in that sum. Con-versely, when a banker debits the current account of its cus-tomer with a certain sum, the customer becomes a debtor to the bank in that sum. Therefore, whichever party is the creditor is entitled to sue the other if demand for payment was made but not honoured. (See Bank of the North Ltd v Alhaji Suarau Akorede (1995) 1 NWLR (Part 374) 736.) By paragraph 12 of the respondent’s statement of claim, it was on 11 July, 1988 and 12 October, 1988 that he addressed let-ters to the appellant demanding repayment. From those dates to 21 February, 1989 when action was instituted is less than one year which is within the 6 years limitation period. I will resolve this issue against the appellant.

The fourth issue for determination poses the question whether the non-joinder of Mr Taiwo and Alhaji Chawai is fatal to the respondent’s case. The respondent complained that Messrs Taiwo and Alhaji Chawai named as agents and servants of the appellant had between 1980 and 1982 negli-gently and wrongly debited his three accounts to the tune of N1,506,610. It is the contention of the appellant that the re-spondent’s claim against the appellant is incompetent with-out the said agents of the appellant being joined as parties. The case relied upon for the submission is Ifeanyichukwu (Osondu) Co Ltd v Solel Boneh Nigeria Ltd (1993) 3 NWLR (Part 280) 246 at 247–248. This case however deals with the vicarious liability of master for the negligence of a servant where it was necessary first and foremost to establish the li-ability of the servant. The present case however arose out of customer/banker relationship which is founded on simple contract. Mr Taiwo and Alhaji Chawai had no contract with the respondent. It is the law that a plaintiff who conceives


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that he has a cause of action against a particular defendant is entitled to pursue his remedy against that defendant only and should not be compelled to proceed against other per-sons whom he has no desire to sue. (See Alhaji Abdulkarim Iyimoga and others v Governor of Plateau State and others (1994) 8 NWLR (Part 360) 73 at 96.) The Supreme Court in Obiloso Anabaronye and others v Nelson Nwakailo (1997) 1 NWLR (Part 482) 374 at 381 restated that the definition of a necessary party to a case is a person whose presence is nec-essary for the effectual and complete adjudication of the questions involved in the cause or matter. There is no sug-gestion that Mr Taiwo and Alhaji Chawai who were dis-missed from the appellant’s service are necessary parties to the action. It is my view that this issue lacks substance.

The fifth and last issue for determination deals with the propriety of the judgment entered in favour of the respon-dent in respect of his Suit No. M/32/89.

The first complaint of the appellant on this issue is that even though Suit Nos. M/32/89 and M/66/89 were consoli-dated, the court below delivered two separate judgments in-stead of one. It was submitted that the court below having delivered judgment in the first case, had become functus of-ficio and could not validly write a second judgment. It was submitted that once an order of consolidation of two cases is made, the cases must be treated as one with one single judgment. The case of Diab Nasr v Complete Home Enter-prises Nigeria Ltd (1977) 5 SC. 1–12 was cited in support.

With profound respect to learned Counsel to the appellant, his submission is not totally correct. The position of the law is that consolidation merely unites cases for purposes of the trial. The Suits still retain their identity and still remain dif-ferent Suits for all intents and purposes except for the pur-pose of trial. (See Accra Perfumery Company Limited v Al-len Rolling Thomas 12 W.A.C.A. 160.) Accordingly, judg-ment and costs are separately entered in each case. Simi-larly, appeals and execution are separately entered and made in each case. The case of Diab Nasr (supra) relied upon by Counsel merely restated the principle that where suits are consolidated they must be tried as a single suit.


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At page 12 of the report, Irikefe, JSC delivering the judg-ment of the court said:–

“In our view once two suits are consolidated, they must be deter-mined as a consolidated matter. The court cannot ignore one and determine the other. The learned trial Judge was, therefore in error in striking out the winding-up petition as he did and ignoring the originating summons in Suit No. M/115/73.”

In the instant case, the learned trial Judge tried the two con-solidated suits as a single suit but in his judgment delivered the same day, he entered separate judgments in respect of each suit. He was perfectly in order.

The appellant’s second complaint is that the award of 21% on the sum of N1,506,610 from 5 April, 1980 when the cause of action supposedly accrued was improper because there was no claim to that effect. The respondent’s Counsel in conced-ing to the complaint filed respondent’s Notice dated 20 June 1995 praying for a variation of the judgment by setting aside the award of interest. In a long line of cases the principle has been laid down that a court has no power to award to a party that which it did not claim. (See Nalsa and Team Associates v NNPC (1991) 8 NWLR (Part 212) 652 at 679 and Ochonna v Unosi (1965) N.M.L.R. 321.) Since the appellant Bank did not in its statement of claim which supersedes the writ of summons claim 21% interest on the principal sum from 5 April, 1980, the court below was in error to have awarded same and this, learned Counsel to the respondent, rightly con-ceded to. This appeal succeeds as far as it relates to the award of 21% interest on the principal sums from the date the cause of action arose or 5 April, 1980.

The most substantial complaint against the judgment en-tered in favour of the respondent is that the respondent did not lead enough credible evidence to entitle him to judg-ment. In this regard, it is necessary to look at the pleadings and evidence led in support thereof. It is well to bear in mind that the respondent’s claim for N1,506,610 is in respect of eight cheques allegedly debited against three of his


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accounts with the appellant. In paragraphs 10 and 11 of his statement of claim in Suit No. M/32/89, he pleaded thus:– “10. The Bank of the North Cheques for which payments were

made and money debited from plaintiff’s three accounts by the agents and/or servants of the defendant Bank, without the consent, knowledge and/or authority of the plaintiff are as follows:–

(a) On current account no. 400085:– 5/11/80 cheque no. 005/63...................N 60,000.00 4/3/81 ” ” 101194...................N 50,000.00 16/3/81 ” ” 11621.....................N 85,000.00 14/8/81 ” ” 116284...................N 43,000.00 5/5/82 ” ” 146457...................N 94,800.00

(b) License Buying Agent account no. 410096B:– 5/5/82 ” ” 146457...................N 94,800.00 27/1/81 cheque no. 104514...................N120,000.00 31/1/81 ” ” 104528...................N178,000.00 (c) License Buying Agent account no. 410093B:– cheque no. 147202 ...............................N100,000.00 Previous amount discovered ................N655.00 The plaintiff shall at the trial rely on and tender all the

cheques as stated in paragraph 10 and hereby gives notice under section 98 of the Evidence Act to the defendant to produce same from their custody.

11. The plaintiff shall also rely on and tender at the trial the de-fendant’s ledger covering Current account no. 400085 and License Buying Agent account nos. 410093B and 410096B to the establish that his three accounts with the defendant Bank were wrongly and/or negligently debited by the agents and/or servants of the defendant. The defendant is hereby given notice under section 98 of the Evidence Act to produce at the trial the complete bank ledgers as stated above.”

The appellant in paragraphs 3, 4 and 5 of the statement of defence denied the above paragraphs. It pleaded in para-graph 5 of the said statement of defence, inter alia:– “3. . . . 4. . . . 5. The defendant says that the cheques mentioned by the

plaintiff in paragraph (10) of the statement of claim were his own cheques, issued and signed by him.”


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An obvious and inherent weakness in the respondent’s case is that the sum of N1,506,610 which he is claiming is more than the value of the eight cheques he is complaining about which is about N730,655 inclusive of the sum of N655 “pre-viously discovered”. Another shortcoming in the presenta-tion of the respondent’s case is that he did not tender in evi-dence the cheques and ledgers he pleaded in paragraphs 10 and 11 of his statement of claim quoted. The burden is on the plaintiff who files an action to discharge that burden and he must do so on balance of probability. Where the evidence adduced by both parties is such that the scales are evenly weighed, the plaintiff has failed to prove his case. (See Saka Owoade v John Abodurin Omitola (1988) 2 NWLR (Part 77) 413 at 421.) Since the respondent was the plaintiff in the case, it was incumbent upon him to tender the disputed 8 cheques and the ledgers as he pleaded. It is no excuse that the documents were not in his possession because he ought to have armed himself with the relevant documents before instituting his action. By section 149(d) of the Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, the court is entitled to presume that evidence which would be and is not produced would if produced, be unfavourable to the per-son who withheld it.

Notwithstanding the respondent’s failure to tender the rele-vant documents he pleaded, the appellant through PW3 ten-dered 5 of the disputed cheques which were admitted as ex-hibits R1–R5. It was the appellant’s case that the cheques were issued by the respondent but the latter denied it. As noted earlier, the onus was on the respondent to prove his case on balance of probability. If the evidence adduced by him is evenly weighted his case stands to be dismissed (see Odiele and others v Okotie (1973) 1 N.M.L.R. 175). Since the appellant claimed that the respondent issued those cheques and the latter denied it, the burden was on the re-spondent to call an expert to show that the signature of the disputed cheques were not his. This he failed to do and this being the case the judgment entered in his favour cannot stand.


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On the whole, and subject to the appeal against the award of 21% interest, I conclude that this appeal is meritorious and ought to succeed. The appeal is allowed. The judgments of the court below dated 25 May, 1995 are hereby set aside. In substitution, I make order as follows:– (a) In Suit No. M/166/88 judgment is entered in favour

of the plaintiff therein for the sum of N2,041,078.73 (Two Million, Forty-one Thousand and Seventy-eight Naira, Seventy-three Kobo) with interest at the rate of 17% per annum for 1 October, 1988 till the day of final payment of the judgment debt.

(b) In Suit No. M/32/88, judgment is entered dismissing the Suit.

(c) The appellant is awarded the sum of N1,000 in the court below and N2,000 in this Court.

UMOREN JCA: I agree. MANGAJI JCA: I have had the privilege of reading before now the judgment delivered by my learned brother, Edozie, JCA. I agree with him that the appeal should be allowed. For the reasons contained in the lead judgment of my learned brother, Edozie, JCA. I too allow the appeal. I adopt all the consequential orders contained in the said lead judg-ment. Appeal allowed.


Comptroller, Nig Prison Service v. Dr Femi Adekanye and others 593

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Comptroller, Nigeria Prison Service, Ikoyi, Lagos and others v Dr Femi Adekanye and others

COURT OF APPEAL, LAGOS DIVISION OGUNTADE, GALADIMA, ADEREMI JJCA Date of Judgment: 15 JUNE, 1999 Suit No.: CA/L/27M/99

Criminal law and procedure – Bail – Conditions for bail under section 26 of Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No. 18 of 1994 (as amended) – Whether in conflict with section 7(1)(b) African Charter on Human and Peoples’ Rights (Ratification and Enforcement) Act Cap 10 Laws of the Federation of Nigeria, 1990

Failed Banks Tribunal – Bail – Whether section 26 Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) dealing with con-ditions for bail conflicts with section 7(1)(b) African Charter on Human and Peoples’ Rights (Ratification and Enforce-ment) Act Cap 10 Laws of the Federation of Nigeria, 1990

Failed Banks Tribunal – Criminal trials – Trial within 21 (twenty one) days as required by section 4(1) Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No. 18 of 1994 (as amended) – Whether non-compliance renders decision of the Tribunal void

Failed Banks Tribunal – Whether High Court have supervi-sory jurisdiction – Section 1(5) and section 1(6) of Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No. 18 of 1994 (as amended)

Facts The present respondents (hereinafter referred to as “respon-dents”) were the applicants in the application before the lower Court. They sought, upon an ex parte application for leave to issue a writ of Habeas Corpus Ad subjiciendum di-rected against the appellants (who were the respondents be-fore the lower Court and are hereinafter referred to as



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“the appellants”). An Order Nisi was made in favour of the respondents on 4 January, 1999 and the return date was to be 11 January, 1999.

The appeal turned out on two issues, viz whether the lower Court was right to have assumed supervisory jurisdiction over a matter that arose in the Failed Banks Tribunal created by Decree No. 18 of 1994? Secondly, ought the lower Court to have stayed further proceedings in the hearing after it was informed that an application for stay of proceedings and execution had been filed at the Court of Appeal?

In the ordinary way, it was expected that the appellants would produce the respondents before the lower Court on 11 January, 1999 and make a return to the writ issued against them. By such return, the appellants should explain the cause of the detention of the respondents. There was still to be heard the application on notice filed by the respon-dents for their release.

The appellants however, did not file a return. Rather, they on 14 January, 1999, filed an application before the lower Court wherein they contended that the lower Court lacked the requisite jurisdiction to have entertained the application by the respondents. Arguments were canvassed by both par-ties on the motion challenging the jurisdiction of the lower Court. On 22 January, 1999, the lower Court in a considered ruling held that it had the jurisdiction to hear the matter. The appellants are challenging that ruling in one of the two ap-peals before the Court.

Following the ruling on jurisdiction, the appellants filed an application for stay of execution and proceedings. The re-spondents opposed the application. On 4 February, 1999, the lower Court in its ruling refused the application. It would seem that the appellants upon the refusal of their ap-plication for stay of proceedings and execution proceeded to file on the same date a similar application for stay before this Court. When the matter was to be further proceeded with later on the same date, appellants’ Counsel informed the lower Court that as he had filed an application for Stay of Proceedings and Execution before the Court of Appeal, the



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lower Court should stay further proceedings in the matter. The lower Court promptly refused the request. Mr Fidelis Nwadialo, learned S.A.N. for the appellants then informed the lower Court that he was withdrawing further appearance in the matter. The Lower Court undeterred, continued with the hearing. Arguments were received on the motion on notice for the release of the respondents and on 12 February, 1999, a Ruling was delivered. The lower Court made an Order abso-lute for the release of the respondents. On 10 March, 1999, the appellants filed another appeal contending that the lower Court on being informed that an appeal and an application for Stay of Proceedings were pending before this Court, should have stayed further proceedings.

Held – 1. Section 26 of Decree No. 18 of 1994 is oppressive and

totally destroys the presumption of innocence in favour of an accused. It is too harsh and ensures that a person accused of committing an offence under the Decree does not get bail at all. It is a bad legislation and clearly of-fends Article 7(1)(b) of African Charter on Human Rights Act Cap 10 Laws of the Federation 1990. Failed Banks Decree No. 18 of 1994 in many respect is incon-sistent with the letter and spirit of the African Charter on Human Rights, that being the position, section 26 of the Failed Banks Decree No. 18 of 1994 is invalid. The pro-tection under section 1(5) and 1(6) of the said Decree which the law offers as a way from shielding the Failed Banks Tribunal from the supervisory jurisdiction of the High Court is ineffectual. The ouster of the supervisory jurisdiction of the High Court cannot attach to the acts done under a law so patently in conflict with the African Charter of Human Rights, hence the general supervisory jurisdiction of the High Court over the Failed Banks Tri-bunal was rightly invoked.

2. By the provision of section 4(2) of the Decree (and were the provisions of African Charter on Human Rights not applicable) non compliance with section 4(1) of the



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Decree would not render the decision of the Tribunal a nullity.

3. Since the High Court of a State does not ordinarily have supervisory jurisdiction over a Federal High Court, clothing a Failed Banks Tribunal with the authority and status of the Federal High Court is a clear manner of making it clear that the High Court of a State should not exercise any supervisory jurisdiction over a Failed Banks Tribunal. In the instant case however, the provi-sions of the African Charter applies. The High Court was therefore right in exercising its jurisdiction.

Appeal dismissed.


Nigerian Agwuna v Attorney-General of Federation (1995) 5 NWLR (Part 396) 418 Attorney-General of the Federation v Sode (1990) 1 NWLR (Part 128) 500 Fawehinmi v Abacha (1996) 9 NWLR (Part 475) 710 Mohammed v Olawunmi (1993) 4 NWLR (Part 287) 254 Nat. Ins. Corp. of Nigeria v Power and Ind. Eng. Co Ltd (1986) 1 NWLR (Part 14) 1 Nigeria Arab Bank Ltd v Contex Ltd (1999) 6 NWLR (Part 608) 648 Okoroafor v Miscellaneous Offences Tribunal (1994) 4 NWLR (Part 387) 63 Olujinle v Adeagbo (1988) 2 NWLR (Part 75) 238 Osadebay v Attorney-General of Bendel (1991) 1 NWLR (Part 169) 525

Nigerian statutes referred to in the judgment African Charter on Human and Peoples’ Rights (Ratifica-tion and Enforcement) Act Cap 10 Laws of the Federation of Nigeria, 1990, Article 7(1)(b) and 7(1)(d)



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Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), sections 1(5), 1(6), 4(2), 5(1), 26

Counsel For the appellants: F Nwadialo S.A.N. (with him Emeka Ngige, O Ojolowo and OA Egwuatu) For the first – twenty-second respondents: Dixon Osuala (with him WK Shittu, AY Usman, CC Okoh, CH Chinaka) For the twenty-third – twenty-seventh respondents: Femi Falana (with him J Ogunye)

Judgment OGUNTADE JCA: (Delivering the lead judgment) There are only two serious issues to resolve in this appeal. The first, was the lower Court right to have assumed supervisory juris-diction over a matter that arose in the Failed Banks Tribunal created by Decree No. 18 of 1994? Secondly, ought the lower Court to have stayed further proceedings in the hearing after it was informed that an application for Stay of Proceedings and Execution had been filed at the Court of Appeal?

The brief relevant facts are these. The present respondents (hereinafter referred to as “respondents”) were the applicants in the application before the lower Court. They sought, upon an ex parte application for leave to issue a writ of Habeas Corpus Ad subjiciendum directed against the appellants (who were the respondents before the lower Court and are hereinafter referred to as the appellants). An Order Nisi was made in favour of the respondents on 4 January, 1999 and the return date was to be 11 January, 1999.

In the ordinary way, it was expected that the appellants would produce the respondents before the lower Court on 11 January, 1999 and make a return to the writ issued against them. By such return, the appellants should explain the cause of the detention of the respondents. There was still to be heard the application on notice filed by the respondents for their release.


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The appellants however did not file a return. Rather, they on 14 January, 1999, filed an application before the lower Court wherein they contended that the lower Court lacked the requi-site jurisdiction to have entertained the application by the re-spondents. Arguments were canvassed by both parties on the motion challenging the jurisdiction of the lower Court. On 22 January, 1999, the lower Court in a considered ruling held that it had the jurisdiction to hear the matter. The appellants are challenging that ruling in one of the two appeals before us.

Following the ruling on jurisdiction, the appellants filed an application for stay of execution and proceedings. The re-spondents opposed the application. On 4 February, 1999, the lower Court in its ruling refused the application. It would seem that the appellants upon the refusal of their application for stay of proceedings and execution proceeded to file on the same date a similar application for stay before this Court. When the matter was to be further proceeded with later on the same date, appellants’ Counsel informed the lower Court that as he had filed an application for Stay of Proceedings and Execution before the Court of Appeal, the lower Court should stay further proceedings in the matter. The lower Court promptly refused the request. Mr Fidelis Nwadialo, learned S.A.N. for the appellants then informed the lower Court that he was withdrawing further appearance in the mat-ter. The Lower Court undeterred, continued with the hearing. Arguments were received on the motion on notice for the re-lease of the respondents and on 12 February, 1999, a Ruling was delivered. The lower Court made an Order absolute for the release of the respondents. On 10 March, 1999, the appel-lants filed another appeal contending that the lower Court on being informed that an appeal and an application for stay of proceedings were pending before this Court, should have stayed further proceedings.

The result of the above is that we have two appeals before us both by the appellants which we have consolidated for hearing.

I shall in this judgment be guided by the issues for deter-mination as formulated by the appellants in their brief. I


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intend however, to reflect the arguments of parties on the law as I discuss these issues.

In their motion filed on 13 January, 1999, the appellants contended that the lower Court lacked the jurisdiction to en-tertain the application by the respondents for a writ of Ha-beas Corpus to issue against the appellants. The grounds for raising the objection as to the jurisdiction of the lower Court as put across by the appellants are these:– “1. That all the applicants/respondents (ie respondents in this

appeal) have been arraigned and charged before the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 as amended.

2. That by operation of section 1(5) of the said Decree the su-pervisory jurisdiction or power of the judicial review of a High Court shall not extend to any matter or proceeding be-fore the Tribunal duly constituted under the said Decree.

3. That by the operation of section 1(b) of the Decree, if any proceeding relating to the supervisory jurisdiction of power of judicial review of a High Court on a cause or matter brought before the Tribunal is before any High Court after the commencement of this Decree, such action shall abate, cease or be deemed to be discontinued without any further assurance other than the said Decree.

4. That the subject-matter of this suit contravenes the provi-sions of the said Decree.

5. That the Failed Banks Tribunal has exclusive jurisdiction over all ancillary matters and any other preliminary issue connected with an offence or hearing over which the tribu-nal has jurisdiction under section 3(2) of the said Decree.

6. That the Honourable Court lacks the requisite jurisdiction to entertain this suit in its entirety.”

It is apparent from the above that the objection raised by the appellants before the lower Court as to its jurisdiction was predicated mainly on section 1(5) and 1(6) of Decree No. 18 of 1994. In the ruling of the lower Court, section 1(b) and 1(ii) of Decree No. 12 of 1994 was also considered. The re-spondents’ Counsel before the lower Court also addressed on the African Charter on Human Rights in pressing home his arguments that the lower Court had the requisite jurisdic-tion.


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The lower Court hinged its conclusion that it had jurisdic-tion to entertain the habeas corpus application before it on two main planks namely:– 1. That throughout the whole of the thirty sections of

Decree No. 18 of 1994, there is no section therein that ousts the jurisdiction of the High Court specifi-cally.

2. That the Failed Banks Tribunals not having con-cluded the trial of the respondents within 21 days as provided under section 4(1) of Decree No. 18 of 1994 and that because the Failed Banks Tribunal had not complied with the relevant provision as to the time the trial should be concluded the High Court had the necessary supervisory jurisdiction over the Failed Banks Tribunal.

Although the lower Court also elected to consider the provi-sions of Decree No. 18 of 1994 in its section (1)(6)(1) which it then set out, no specific decision of the lower Court was based there upon as the lower Court had merely said in the passing:–

“In respect of the deprivation of Civil Rights and properties it must be construed Fortissimo Contra Proferetem ie strictly against authority but sympathetically in favour of the citizen whose prop-erty or rights are being deprived.”

Further, although the respondents’ Counsel relied on Afri-can Charter of Human Rights, etc Act Cap 10 Laws of the Federation of Nigeria, 1990, a law which I consider the most important and relevant for the matter the lower Court was considering, not a word was said as to its applicability to the application before the lower Court.

In the appellants’ Reply to the respondents’ brief (No. 1), the appellants have contended that this appeal should be considered without reference to the African Charter of Hu-man Rights because according to them it did not form part of the matter considered by the lower Court. With respect, I think that that contention was not well founded. What the lower Court had to consider was whether or not it had juris-diction to entertain the application before it. That was the


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issue. In the consideration of that issue, the duty on the lower Court was to allow itself to be guided by all the relevant laws. The laws of the land are binding on everybody and all the or-gans including the judiciary which has a distinct duty to apply all the Laws. That the lower Court had not specifically consid-ered the Law cannot be any excuse for this Court to fail to ap-ply the Law if it is considered relevant. It is now a settled prin-ciple of law that where a Court reaches a right conclusion, but for the wrong reason, the conclusion will stand.

I propose to approach the determination of the issue of the jurisdiction of the lower Court on two grounds, one alterna-tive to the other. One of the suppositions that the African Charter on Human Right (Cap 10) Laws of the Federation of Nigeria, 1990) did not apply and the other on the supposition that it did starting with the former. I shall then justify the conclusion reached finally as to the applicability of African Charter on Human Rights.

I should say straightway that the lower Court was mistaken when it said that none of the thirty sections in Decree No. 18 of 1994 ousted the jurisdiction of the High Court. Section 1(5) and 1(6) of Decree No. 18 of 1994 provides:– “1(5) Notwithstanding the provisions of the Constitution of the

Federal Republic of Nigeria, 1979, as amended, or any en-actment to the contrary, the supervisory jurisdiction or power of judicial review of a High Court shall not extend to any matter or proceeding before the Tribunal duly con-stituted under this Decree.

1(6) Subject to section 2 of this Decree, if any proceedings re-lating to the supervisory jurisdiction or power of judicial review of a High Court on a cause or matter brought be-fore the Tribunal is before any High Court after the com-mencement of this Decree, such action shall abate, cease or be deemed to be discontinued without any further as-surance other than this Decree.”

Clearly the intention of the lawmaker as made manifest in the provisions of section 1(5) and 1(6) is to exclude the su-pervisory jurisdiction of the High Court on matter in respect of which jurisdiction is given to the Failed banks Tribunal under section 3(2) of Decree No. 18 of 1994.


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If any doubt persists as to the intention of the lawmakers, this soon evaporates upon a perusal and digestion of section 3(2) of the same Decree.

“Since the High Court of a State does not ordinarily have supervi-sory jurisdiction over a Federal High Court, clothing a Failed Banks Tribunal with the authority and status of the Federal High Court is a clear manner of making it clear that the High Court of a State should not exercise any supervisory jurisdiction over a Failed Banks Tribunal.”

Now, in support of its conclusion that no section of Decree No. 18 of 1994 ousted the jurisdiction of the lower Court, the lower Court relied on the statement of Belgore, JSC in Osade-bay v Attorney-General of Bendel (1991) 1 NWLR (Part 169) 525 at 571. I think with respect, that the learned trial Judge misunderstood or misconceived both the reasoning of Belgore, JSC in the case and the words employed by the learned Jus-tice. On its true analysis, the stand taken by Belgore, JSC, is in fact against the conclusion of the lower Court in aid of which it relies on Osadebay v Attorney-General of Bendel (supra). At page 571 of the report, Belgore, JSC said:–

“Any Decree ousting the jurisdiction of the Court does so effec-tively because a Decree is a special creature of the Military to shield their own peculiar method of governance. It is for this reason they make their Decree superior even to the Constitution. Section 12 of Decree No. 34 of 1968 is clear and it should not be beclouded by Court induced ambiguity. When there is no jurisdiction, the Court will act ultra vires should it venture to assume one; for a Court em-barking on the hearing of a matter not within its jurisdiction is exer-cising in moot, a function not that of Court (Barclays Bank of Nige-ria Ltd v Central Bank of Nigeria (1976) 6 SC. 175). The peculiar circumstance of a military regime is a point in issue, much as the military exercise governance and do so effectively, their protective laws must be obeyed: and once the Decrees are clear and unambi-guous as to ouster of Court’s jurisdiction in certain subject-matters the courts indeed have no jurisdiction. Attorney-General, Lagos State v Dosumu (1989) 3 NWLR (Part 111) 552; Uwaifo v Attor-ney-General, Bendel State (1982) 7 SC. 124.”

And at page 572 of the same report, Belgore, JSC went on:– “It must be pointed out that Courts are creatures of statute based on the Constitution. Their jurisdictions are based on statutes and no Court assumes jurisdiction without enabling statute. Jurisdiction


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cannot be implied where there is no statute to back it up. (Ariyo v Ogele (1968) 1 All NLR 1; Timitimi v Amabebe (1953) XIV W.A.C.A. 374). When there is no jurisdiction it is futile exercise for a Court to embark on the hearing of a matter (Attorney-General of the Federation v Sode (1990) 1 NWLR (Part 128) 500, 503, 504).”

It is certainly indisputable that the decision of the Supreme Court in Osadebay v Attorney-General (supra) and in par-ticular the views of Belgore, JSC do not support the conclu-sion of the lower Court.

Another decision relied upon by the lower Court and the respondent’s Counsel in their brief is Okoroafor v Miscella-neous Offence Tribunal (1994) 4 NWLR (Part 387) Pages 63–70 where this Court per Acholonu, JCA observed:–

“Where the act or thing required by the statute is a condition precedent to the jurisdiction of the tribunal, compliance cannot be dispensed with and if it be impossible the jurisdiction fails. More-over, there cannot be conferment of jurisdiction even by consent contrary to the clear provisions of the statute.”

I have no doubt that Pats-Acholonu, JCA, in the Okoroafor’s case, correctly stated the law given the issues before the Court in that case. The observation of the learned Justice of the Court of Appeal, cannot however be just uprooted and transplanted indiscriminately to other circumstances which are not the same as in the case in which the observation was made. The observation was relied upon in support of the ar-gument that since the Failed Banks Tribunal trying the sus-pects had not concluded hearing within 21 days, the lower Court could assume a supervisory jurisdiction over the Failed Banks Tribunal. The reasoning translates into this. If the Failed Banks had not compiled with a fundamental pro-vision of the Decree which created it ie Decree No. 18 of 1994, it could not enjoy the benefit of the protection af-forded it under section 1(5) and 1(6) of the Decree.

Now section 4(1) and (2) of Decree No. 18 of 1994 pro-vides:– “4(1) The Tribunal shall deliver its judgment not later than 21

working days from the day of its first sitting. (2) The decision of a Tribunal shall not be set aside or treated

as a nullity solely on the ground of non-compliance with


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the provisions of this section 24(6) of this Decree unless the Special Appeal Tribunal exercising jurisdiction by way of appeal from or review of that decision is satisfied that the party complaining of such non-compliance has suffered a miscarriage of justice by reason thereof.”

It seems to me that the above provisions of section 4 of De-cree No. 18 of 1994, are such that the dictum of Pats-Acholonu, JCA in Okoroafor v M.O.T. (supra) must be seen as inapposite on the facts in this case. This is because sec-tion 4(2) of the Decree has stated what the effect of non-compliance with the section should be. It was therefore wrong for the lower Court to have relied on that case for the conclusion that the High Court had jurisdiction in the matter on the ground that the Failed Bank had not complied with section 4(1) of Decree No. 18 of 1994.

In Agwuna v Attorney-General of the Federation (1995) 5 NWLR (Part 396) 418, the Supreme Court had to consider the effect of section 1(8), (9) and (10) of the Tribunal (Mis-cellaneous Provisions) Decree No. 9 of 1991 on the supervi-sory jurisdiction of the High Court. Section 1(8) and (9) of the said Decree No. 9 of 1991 is in ipsissima verba with section 1(5) and 1(6) of Decree No. 18 of 1994. That case therefore offers a clear guidance to the lower Court as it was obvious that under the doctrine of stare decisis, the lower Court was bound to follow the decision in the case. The de-cision was cited before the lower court. The learned trial Judge did not attempt to distinguish the circumstances in the case from the one currently before him; nor offer an expla-nation as to why he could not follow the case. He just looked the other way. With respect, I do not think that was the right attitude. At page 437 of the case ie Agwuna v At-torney-General Federation, Iguh, JSC said:–

“A close study of the above provisions of section 21(1) of the Re-covery of Public Property (Special Military Tribunals Miscellane-ous Offences) Act and sections 1(8), 1(9) and 1(10) of the Tribunals (Miscellaneous Provisions) Decree No. 9 of 1991 discloses in no uncertain terms that these legislations are very carefully worded and promulgated with a clear, definite and unambiguous intention on the part of the lawmakers to oust the supervisory jurisdiction or the power of judicial review of the High Court in respect of a


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cause or matter brought or determined by the tribunals concerned. Although therefore, the powers of the superior Courts of record such as High Court are great and indeed wide, they are certainly not unlimited. They can be and are indeed sometimes properly limited by ouster of jurisdiction clauses in some legislations such as those above mentioned. (See Shodeinde v Registered Trustees of Ahmaddiya Movement in Islam (1980) 1–2 SC. 225; Olaniyi v Aroyehum (1991) 5 NWLR (Part 194) 652 at 686; Attorney-General of the Federation v Sode (1990) 1 NWLR (Part 128) 500 at 517.) I accept that although it has always been the practice of the courts to guide their jurisdiction jealously, if in any given case that jurisdiction is expressly ousted by the provisions of the Con-stitution, an Act of Parliament or a Decree, then the path of justice must dictate compliance with such an ouster of jurisdiction clause especially as under our present Constitution. Decrees are the Su-preme Laws of the land.”

If I had to consider the issue of the jurisdiction of the High Court in this matter without reference to the African Charter on Human Rights as enshrined in Cap 10 Laws of the Fed-eration of Nigeria, 1990, I would have not the slightest hesi-tation in concluding that the High Court had no supervisory jurisdiction in the matter.

I now come to a consideration of the impact of the African Charter on Human and Peoples’ Right (Ratification and En-forcement) Act Cap 10 Laws of the Federation, 1990, on Decree No. 18 of 1994. In Fawehinmi v Abacha (1996) 9 NWLR (Part 475) 710 at 746–747, this Court per Mus-dapher, JCA said:–

“The member countries – parties to the protocol – recognised that Fundamental Human Rights stem from the attributes of human be-ings which justify their international protection and accordingly by the promulgation of Cap 10, the Nigerian State attempted to fulfil its international obligation to which the nation voluntarily entered and agreed to be bound. The arrest and detention of the appellants on the facts adduced clearly breached the provisions of the Charter and can be enforced under the provisions of the Charter. The contracting States are bound to establish some machinery for the effective pro-tection of the terms of the Charter and when the local procedure is exhausted or when delay will be occasioned, the matter will be taken to the International Commission. All these indicate that the provisions of the Charter are in a class of their own and do not fall within the classification of the hierarchy of Laws in Nigeria


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in order of superiority as enunciated in Labiyi v Anretiola (1992) 8 NWLR (Part 258) 139. (See Equal Opportunity Commission and another v Secretary for State for Employment (1994) 1 All ER 910 and also Ogugu and Oshevire (cases) (supra).) It seems to me that the learned trial Judge erroneously acted when he held that the Af-rican Charter contained in Cap 10 of the Laws of the Federation of Nigeria, 1990 is inferior to the Decrees of the Federal Military Gov-ernment. It is commonplace that no Government will be allowed to contract out by local legislation, its international obligations. It is my view that notwithstanding the fact that Cap 10 was promulgated by the National Assembly in 1983 it is a legislation with interna-tional flavour and the ouster clauses contained in Decree No. 107 of 1993 or No. 12 of 1994 cannot affect its operation in Nigeria. I agree with the submissions of the learned Counsel for the appellant. In England, where there is no written Constitution and the Parlia-ment is Supreme, it could legislate on any issue. But that sover-eignty is now somewhat limited through the impact of European Community Act of 1972. Although the British Parliament passed the E.C. Law and can in theory repeal it, but there are constraints and limitations and thus Parliamentary Supremacy has been surren-dered, by implication, by the signing of the Union Laws. It is for the above that I hold that the provisions of Cap 10 of the Laws of the Federation, 1990 are provisions in a class of their own. While the Decrees of the Federal Military Government may over-ride other municipal laws, they cannot oust the jurisdiction of the court whenever properly called upon to do so in relation to matter per-taining to human rights under the African Charter. They are pro-tected by International Law and the Federal Military Government is not legally permitted to legislate out of its obligations.”

I entirely agree with the observation of Musdapher, JCA, reproduced above. When it is said that the African Charter of Human Rights Act Cap 10 is superior to our municipal laws on questions of Human Rights, this does not derogate from the sovereignty of Nigeria as a Nation State. One of the enduring attributes of a Nation State under International Law is the sovereignty of the law makers in a Nation State to make laws within its defined borders on matter in gen-eral. Occasions do arise however, when a Nation State for the collective good of a larger Community or States includ-ing the particular Nation State voluntarily sheds a part or surrenders aspects of its sovereignty. When this happens, its true import is the assertion of the sovereign National State to limit its sovereignty.


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It follows therefore that the High Court when called upon to consider issues bordering on the infraction of the Funda-mental Human Rights as protected under Cap 10 Laws of the Federation ought not to throw up its hands in a state of surrender and helplessness in the face of the ouster provi-sions in the Decrees of the Military Government. The true position is that in questions or issues concerning the Funda-mental Human Rights protected under Cap 10, Laws of the Federation, the provisions of Cap 10 were superior to the Decrees of the Federal Military Government. The next thing is to examine the facts as presented before the lower Court to see if there was the necessity to involve the provision of Cap 10 in aid of the respondents.

The appellants had not filed a return to the Order Nisi on the writ of Habeas Corpus served on them. The depositions in support of the application brought on behalf of the re-spondents were therefore unchallenged. They went one way. When the depositions in an affidavit are unchallenged, the Court may act on them. (See Olujinle v Adeagbo (1988) 2 NWLR (Part 75) 238 and Nat. Ins. Corp. of Nigeria v Power and Ind. Eng. Co Ltd (1986) 1 NWLR (Part 14) 1.)

The unchallenged evidence revealed that the respondents had been arrested and arraigned before the Failed Banks Tribunal on diverse offences. Several of them had been in prison custody for over 30 months arising from their inabil-ity to meet the bail terms set by the Tribunal. The health of several of them was failing and the Tribunal had not com-plied with the provisions of section 4(1) of the Decree No. 18 of 1994 which provides that the trial of accused persons shall be concluded within 21 days.

Section 26 of Decree No. 18 of 1994 dealing with the issue of bail before a Failed Banks Tribunal provides:– “26(1) Subject to subsection (2) of this section, the Tribunal

shall not grant bail to a person charged with an offence punishable with a term of imprisonment without the op-tion of fine under this Decree.

(2) Notwithstanding, subsection (1) of this section, the Tri-bunal may grant bail, for an amount equal to that


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involved in the offence, if the person charged with the offence:–

(a) deposits half the amount in the Tribunal as security for the bail;

(b) provided surety for the balance of the amount; and (c) hands over his passport to the Tribunal for the du-

ration of the bail.” It is apparent from the above that it is only a person who com-mitted the offence for which he is charged that could get bail. A person who was innocent of the offence, given the rigid conditions set for the grant of bail might not get bail. Over-all, the conditions set for bail are a presumption that anyone charged under the Decree is guilty of the offence. More than anything else, it is the provisions of section 26 on bail that en-sured that the respondents were kept in custody this long. The Chairmen of the Tribunals have no discretion in the matter.

I am not unmindful that the time the Decree was promul-gated, the Nigerian economy was badly traumatised as a re-sult of extensive fraud and improprieties perpetrated by sev-eral banking officials. They mismanaged their banks. They ruined many individuals and businesses. Several customers of the bankers who could not bear the loss caused them lost their lives as a result of shock induced by hypertension. It was indeed an unhappy time for many people. The economy was nearly ruined and has since not recovered. It was there-fore a time for the lawmakers to take stern measures to curb these excesses.

Having said that, it needs to be borne in mind that even when efforts are made to curb crimes in society only civi-lised methods should be employed. Society ought not be brutalised. A law that does not discriminate in the award of punishment between the guilty and the innocent is a mod-ern-day anachronism. No nation should tolerate it. And this is one of the reasons that informed the need for African Na-tions to come together for an African Charter on Human Rights. Article 7 of the Charter is eye-opening. It provides:–

“Article 7 1. Every individual shall have the right to have his cause

heard. This comprises:–


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(a) the right to an appeal to competent national organs against acts of violating his fundamental rights as rec-ognised and guaranteed by conventions, laws, regula-tion and customs in force;

(b) the right to be presumed innocent until proved guilty by a competent Court or Tribunal;

(c) the right to defence, including the right to be defended by Counsel of his choice;

(d) the right to be tried within a reasonable time by an im-partial Court or Tribunal.

2. No one may be condemned for an act or omission which did not constitute a legally punishable offence at the time it was committed. No penalty may be inflicted for an offence for which no provision was made at the time it was committed. Punishment is personal and can be imposed only on the of-fender.” (Italics mine.)

In Margaret Eyu v The State (1988) 2 NWLR (Part 78) 602, this Court sitting at Enugu examined the considerations that should guide a Court in the grant or refusal of bail. I had the privilege of writing the lead judgment in the case. At page 610 of the report I said:–

“In the exercise of its discretion on whether or not to grant bail pending trial, the usual factors to be taken into account are:–

(1) The nature of the charge; (2) The severity of the punishment; (3) The character of the evidence; and

(See Mamuda Dantata v Police (1958) NRNLR 3.) (4) Another important factor to be borne in mind is the criminal

record of the accused and the likelihood of the repetition of the offence . . .”

It seems to me that since the law presumes in favour of the liberty of the subject and his innocence until found guilty, the onus is on the prosecution to show in a given case that an accused/applicant for bail is not one that should be released on bail.”

And pages 612–613, I said further:– “While a Court must in the consideration of the question of bail consider the strength of the evidence against an accused, it ought to be borne in mind that the case is not at the stage being tried. The appellant in this case had pleaded not guilty to charge no. ME/323C/88. When an accused pleads not guilty, he is deemed to have put himself upon his trial. See section 217 of the Criminal


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Procedure Act. Since there is a presumption of innocence in fa-vour of an accused, it seems to me odd and oppressive that the ap-pellant in this case had been called upon to deposit a sum of N400,000 as a condition for bail. Is it not possible she may at the end of the day be found not guilty of the offence. Why ask her, then, to deposit the very sum she was alleged to have received un-der false pretences. If the sole purpose of granting bail is to enable an accused come back to take his trial, I do not see that it is neces-sary to introduce a test of pecuniosity to attain that end. For even an accused who is able to deposit N400,000 may still jump bail. Section 120 of the Criminal Procedure Act has laid it down the amount of bail shall not be excessive.”

I am satisfied that section 26 of Decree No. 18 in its effect is oppressive and totally destroys the presumption of inno-cence in favour of an accused. It is too harsh and ensures that a person accused of committing an offence under the Decree does not get bail at all. It is a bad legislation and clearly offends Article 7(1)(b) of African Charter on Human Rights Act Cap 10 Laws of the Federation of Nigeria, 1990.

In another respect, I do not think that Decree No. 18 of 1994, sufficiently guarantees the trial of an accused within a reasonable time as provided in Article 7(1)(d) of Cap 10, Laws of the Federation. Section 4(1) of Decree No. 18 of 1994 provides that an accused person shall be tried within 21 days. Under section 4(2) non-compliance with section 4(1) shall not lead to the decision of the Tribunal being set aside a declared or a nullity unless the Appeal Tribunal is satisfied that such non-compliance has led to a miscarriage of justice.

Section 5(1) of Decree No. 18 of 1994, exposed the hol-lowness of the so called protection afforded an accused un-der section 4(1). Section 5(1) of Decree No. 18 provides:–

“A person convicted or against whom a judgment is given under this Decree, may within 21 days of the conviction or judgment ap-peal to the Special Appeal Tribunal established under the Recov-ery of Public Property (Special Military Tribunal) Decree 1984 as amended in accordance with provisions of that Decree.”

Under the above provision, only a person convicted or against whom a judgment is given can appeal. The result is that if an accused person who has been tried for upwards of


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5 years and who contrary to section 4(1) of Decree No. 18 of 1994, was put in custody for the duration of trial is eventu-ally found not guilty, he has no way of protesting his unlaw-ful incarceration because under section 5(1) above, only a person who has been convicted or against whom a judgment is given can bring an appeal. When you relate that position to the situation of the respondents in this case, it means that if they are eventually found not guilty, they will have no method of challenging their unlawful detention.

From the totality of what I have said above, it is manifest that Decree No. 18 of 1994, in many respect is inconsistent with the letter and spirit of the African Charter on Human Rights. That being the position, section 26 and perhaps in a constructive sense, sections 4(2) and 5(1) of the same De-cree are invalid. The protection under section 1(5) and 1(6) of the said Decree which the law offers as a way from shielding the Failed Banks Tribunal from the supervisory jurisdiction of the High Court is ineffectual. The ouster of the supervisory jurisdiction of the High Court cannot attach to the acts done under a law so patently in conflict with the African Charter of Human Rights. The general supervisory jurisdiction of the High Court over the Failed Banks Tribu-nal was in my view rightly invoked. The lower Court cor-rectly assumed jurisdiction.

In the result this appeal fails on this score. The appellants have also contended that the lower Court

when informed that an application for Stay of Execution and Stay of Proceedings was pending in this Court should have stayed proceedings pending the disposal of the two applica-tions by this Court. That ground of appeal is another way of saying that the final ruling of the lower Court given on 12/2/99, should be pronounced a nullity.

In Mohammed v Olawunmi (1993) 4 NWLR (Part 287) 254, the Supreme Court per Olatawura, JSC said:–

“Where a Judge of the High Court is aware of an application in a higher Court like the Court of Appeal in a case before him but de-liberately chooses to ignore it, it is an attitude which borders on judicial impertinence and is an affront to the authority of the Court


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of Appeal. This is because all the courts established under the con-stitution derived their powers and authority from the Constitution and the hierarchy of courts shows the limits and powers of each court. So, for inferior court to defy the authority and powers of a superior court is both undesirable and distasteful.”

In a recent decision of this Court in Nigeria Arab Bank Ltd v Comex Ltd (199) 6 NWLR (Part 608) 648 – we set aside the judgment of the High Court given in circumstances which showed that the High Court deliberately ignored the pro-ceedings before this Court. The High Court should never attempt to confront the Court of Appeal with a fait accompli by deliberately proceeding with the trial of a matter when it was aware that an application for Stay of Proceedings was pending before this Court.

I am satisfied that on 4 February, 1999, the lower Court was informed that an application for Stay of Execution and State of Proceedings was pending before this Court. In the Ruling delivered by the lower Court on 4 February, 1999 reference was made to the application said to have been filed at the Court of Appeal. The appellants have asked us to set aside the proceedings of the Lower Court subsequent to 4 February, 1999. There is no doubt that we can do so in the exercise of our discretion.

It seems obvious to me therefore that the lower Court was not intent on disregarding the proceedings before this Court. Rather, I have the impression that it was swayed by sympathy for the respondents who without being pronounced guilty had been made at the time to spend over thirty months in prison custody. He wanted to move with expedition. In a case involving the liberty of the citizen it is desirable that a Court should avoid delay. In the process of trying to avoid such delay, the lower Court did wrong. To set aside the pro-ceedings subsequent to 4 February, 1999, will impose a greater hardship on the respondents. I think it suffices to say here that when confronted with a situation like this in the future, the trial Judge should stay proceedings in his Court. There may be circumstances where the interest of justice dictates that a Stay of Proceedings should not be granted. The High Court should write a considered ruling explaining


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the special circumstances so that if a further application is made to us in the Court of Appeal for Stay of Proceedings, we will be made aware of the special circumstances which necessitates the refusal of the application for Stay of Pro-ceedings.

I have in this judgment discussed my approach to the ap-peal if I were of the view that the African Charter on Human Rights Act Cap 10 of the Laws of the Federation did not ap-ply. I have taken the view however, that Cap 10 applied and that the lower Court correctly assumed jurisdiction.

In the final conclusion this appeal is dismissed. However, I need to say a few more words on the implica-

tions of this judgment and its effect on the respondents. I have earlier in this judgment said that it was section 26 of Decree No. 18 of 1994 which imposed stringent conditions for the grant of bail. The stand I take that the respondents have been kept in prison custody for too long has no bearing whatsoever on the merits or demerits of the charges brought against them and this judgment is in no way a pronounce-ment as to the guilt or the innocence of the respondents.

An order therefore which says that the respondents should be unconditionally set free is liable to be interpreted to mean that the respondents have been found not guilty of the of-fences with which they were charged. I have not said any such thing and indeed the issue before us was not the guilt or innocence of the respondents.

Under section 251(3) of the Constitution of the Federal Republic of Nigeria (Promulgation) Decree No. 24 of 1999, the Federal High Court now has jurisdiction to try the re-spondents on the offence brought against them. It is there-fore directed that the respondents be brought on the offence before a Judge of the Federal High Court Lagos to enable the Judge grant the respondents bail only on such terms as will ensure that respondents come back to take their trial on such date and time it may be fixed for. This is to be done within 7 days from today.

It is further ordered that such of the respondents as have been convicted should serve out the terms unless sooner


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released by a Court of competent jurisdiction or by the force of any law that may be passed by the National Assembly.

I made no order as to costs. GALADIMA JCA: I entirely agree with the reasons for judgment just delivered by my learned brother, Oguntade, JCA, which I had been privileged to have read, earlier in draft.

Only two main issues arise for determination in this appeal namely:– 1. Whether the lower Court was right to have assumed

supervisory jurisdiction over a matter that arose in the Failed Banks Tribunal established by Decree No. 18 of 1994.

2. Whether the lower Court ought to have stayed fur-ther proceedings in the hearing after it was duly in-formed that an application for stay of proceedings and execution had been filed at the Court of Appeal.

Issue of the jurisdiction of the High Court has to be consid-ered with reference to the African Charter on Human Rights as enshrined in Cap 10 Laws of the Federation of Nigeria, 1990. The High Court should not shirk its responsibility to consider issues bordering on infraction of the Fundamental Human Rights as protected under Cap 10 Laws of the Fed-eration under the thin disguise that there is ouster provision in the Decree promulgated by the Military Administration. Nay, I subscribe entirely to the observation of Musdapher, JCA in Chief Gani Fawehinmi v General Sani Abacha and 3 others (1996) 9 NWLR (Part 475) 710 at 746–747; that the African Charter on Human and Peoples Rights (Ratification and Enforcement) Act Cap 10 is superior to our municipal laws on questions of human rights. Questions on Fundamen-tal Human Rights are well protected under Cap 10 Laws of the Federation of Nigeria, 1990, which were superior to the Decrees of the Federal Military Government. There was need to invoke the provisions of Cap 10 in aid of the re-spondents. This the lower Court did, and it rightly assumed jurisdiction.


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The appellants are right to have contended that the lower Court when it was aware that an application for Stay of Exe-cution and Stay of Proceedings was pending in this Court should have stayed proceedings pending the determination of the application by this Court. (See Mohammed v Olawunmi (1993) 4 NWLR (Part 287) 254 and the recent decision of this Court in Suit No. CA/L/130/95 – Nigeria Arab Bank Ltd v Contex Ltd (Unreported) delivered on 3 May, 1999.) This Court set aside the judgment of the High Court given in the circumstances which clearly indicated that the High Court flagrantly ignored the proceedings be-fore this Court. Learned trial Judge was anxious to see to the expeditious disposal of a matter in which the respondents had spent 30 months in prison custody without their fate having been decided. However, I am of the opinion that the trial Judge when confronted with the order of this Court in the future, he should stay proceedings in his Court.

For the fuller reason contained in the judgment, I also dis-miss this Appeal and affirm the decision of the lower Court. ADEREMI JCA: I have had the privilege of a preview, in draft, of the judgment just read by my learned brother Ogun-tade, JCA. He has dealt exhaustively with all the issues flowing out of the appeal. I respectfully agree with his rea-soning and conclusions.

In contributing, it is my view that the whole case beams the search light on the need for the preservation of the free-dom or liberty of the man. Freedom is no doubt the greatest gift or heritage of man. Omnipotence created men and ac-corded him with divine freedom. Men are born free with lib-erty to think what he will, to say what he will and to go where he likes, all in a lawful manner, without let or hin-drance from any other persons, private or governmental au-thorities. It therefore follows that, generally, detention of a man by a fellow man is a violation of the law of God and man. I am not obvious of the fact that there are checks and balances to the series of freedom given to man. To the extent to which a man must not do his things in a way calculated to injure or adversely affect the exercise of the freedom of


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another man, his own freedom is limited. The whole of Arti-cle 7 of the African Charter on Human and Peoples Rights (Ratification and Enforcement) Act Cap 10 Laws of the Fed-eration of Nigeria, 1990 is in tune with the universal concept of criminal law in a civilised society that upholds the rule of law as a way of life, by it, accessibility to the court and even to the highest court is guaranteed, to the citizen whose fun-damental rights are threatened; his right to presumption of innocence until he is proved guilty by a court of competent jurisdiction is assured; his right to defence which includes the right to be defended by a Counsel of his choice is offered to him on a platter of gold and his right to be tried within a rea-sonable time by an impartial court or tribunal remains sacro-sanct. That is the continental law Nigeria voluntarily sub-scribed to. It came into force on the 17 March, 1983. The Failed Banks Decree No. 18 came into force in 1994; section 26 therefore quoted in extenso in the leading judgment is un-doubtedly a draconian law in all its ramifications. It contra-venes the universal conception of presumption of innocence in favour of a suspect under the criminal law. If there were no other law Decree No. 18 is what be resorted to, to determine the fate of the applicants. But having voluntarily subscribed to that continental or international law – the African Charter on Human and People’s Rights, Nigeria as a nation is bound by its provisions. And to the extent to which any of our laws is in conflict with the provisions of that continental or inter-national law to that extent shall such law remain null and void. This is a clear case of the application of the doctrine of covering the Field. In the realm of fundamental human rights if any law promulgated by any subscribing African nation runs counter to or is in conflict with the provisions of the Af-rican Charter on Human and Peoples’ Rights to the extent of such conflict such law shall remain null and void. When Lord Atkin during the second world war made that monumental speech in the House of the Lords in the case of Liversidge v Anderson and another (1941) 3 A.E.R. 338 and page 361 and I quote him:–

“In England, amidst the clash of arms the laws are not silent. They may be changed, but they speak the same language in war as in


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peace. It has always been one of the pillars of freedom, one of the principles of liberty for which, on recent authority, we are now fighting, that the Judges are no respecters of persons and stand be-tween the subject and any attempted encroachments in his liberty by the executive, alert to see that any coercive action is justified in law.”

I think he was addressing not only English Judges but all Judges in democratic environment where the rule of law is raised up. It is the duty of all Judges in democratic society to see that not only is the law obeyed but that government takes place under the law and in accordance with it. I am not say-ing that suspects particularly those whose pre-occupation is capable of destabilising the society in all materials respect, should be treated with kid gloves. Undoubtedly, drastic situation demands drastic solution. But, in meeting out dras-tic solution to drastic situation, rule of law must not be seen to be jettisoned. All Judges bear particular responsibility to see to it that all branches of the government – the legislature, the executive as well as the judiciary conform to the legal norms of a free society. In the instant case, with the disturb-ing facts staring one in the face it will be a tragedy to the so-ciety for a Judge to demonstrate timidity under the munici-pal law and thereby in cheap obedience to its wordings re-fuse to assume jurisdiction when faced with the provisions of African Charter on Human and Peoples’ Rights. A refusal to assume jurisdiction will make the Judge more executive than the executive themselves. The trial Judge of the court below by assuming jurisdiction held himself out as one who is governed by rule of law.

It is for this little contribution and of course for the exhaus-tive reasons and exposition of the law in the leading judg-ment of my learned brother, Oguntade, JCA that I also say that the appeal is devoid of merit. It must be dismissed and I accordingly dismiss it. I also endorse the decision of the court below. Appeal dismissed.



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Eyo Edem Effiom and another v The Director of Prisons, Nigeria Prisons Service and another

COURT OF APPEAL, LAGOS DIVISION OGUNTADE, GALADIMA, ADEREMI JJCA Date of Judgment: 15 JUNE, 1999 Suit No.: CA/L/311/98

Failed Banks Tribunal – Criminal trials before the Failed Banks Tribunal – Whether the High Court has supervisory jurisdiction over – Sections 1(5) and (6) and 3(2) and (3) Failed Banks Decree No. 18 of 1994 (as amended) Failed Banks Tribunal – Criminal trials thereat – Order of remand by Failed Banks Tribunal made without taking of plea – Whether High Court has supervisory jurisdiction over Tribunal – Sections 1(5) and (6) and 3(2) and (3) Failed Banks Decree No. 18 of 1994 (as amended) Practice and Procedure – High Court – Whether has super-visory jurisdiction over the Failed Banks Tribunal – Sec-tions 1 and 3 of the Failed Banks Decree No. 18 of 1994 (as amended) construed Facts On the 27 April, 1998, the appellants were brought before the Zone 4 of the Failed Banks Tribunal, Lagos on a charge of stealing. Their pleas were not taken and they were re-manded at Ikoyi Prisons.

The appellants (as applicants) brought an application ex parte at the High Court of Lagos State, Ikeja for a writ of Habeas Corpus to issue against the respondents. In the affi-davit filed in support of the ex parte application, it was de-posed, inter alia, that they were brought to the Tribunal on a criminal charge of stealing and that without the charge being read or plea taken before the Tribunal a detention warrant was issued by the presiding chairman authorising the respon-dents to detain the applicants at Ikoyi Prisons. An order nisi was made in favour of the appellants. On the return date, the respondents filed a notice of preliminary objection challeng-ing the jurisdiction of the trial Court to issue a writ of


Eyo Edem Effiom v. The Director of Prisons, Nigeria Prisons 619

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Habeas Corpus or any other unit of judicial review in re-spect of the applicants.

The Lower Court in a considered ruling upheld the pre-liminary objection by the respondents and struck out the originating summons for the Writ of Habeas Corpus on the ground that the High Court has no jurisdiction over the mat-ter.

The appellants appealed to the Court of Appeal.

Held – 1. The provisions of sections 1(5) and 1(6) and 3(2) and

3(3)(c) of the Failed Banks Decree No. 18 of 1994 (as amended) make it clear that the intention of the law maker is that the High Court shall not have a supervisory jurisdiction over a Failed Banks Tribunal.

2. The Failed Banks Tribunal created under Failed Banks Decree No. 18 of 1994 (as amended) has ample powers to remand in custody any person brought before it upon a criminal offence.

In the instant case, the complaint of the appellants was not that they were remanded for a period considered unrea-sonably long or that the conditions of bail granted were so onerous that the appellants could not meet them or that the Tribunal has in consequence of the exercise of powers derived under Failed Banks Decree No. 18 of 1994 (as amended) caused a harm or injury to them against the let-ter and spirit of the African Charter on Human and Peo-ples’ Rights (Ratification and Enforcement) Act Cap 10 Laws of the Federation of Nigeria, 1990.

Appeal dismissed.


Nigerian Agwuna v Attorney-General of the Federation (1995) 5 NWLR (Part 396) 418 Ariyo v Ogele (1968) 1 All NLR 1



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Attorney-General Federation v Sode (1990) 1 NWLR (Part 128) 500 Osadebay v Attorney-General of Bendel State (1991) 1 NWLR (Part 169) 525 Timitimi v Amabebe (1953) 14 W.A.C.A. 374

Nigerian statute referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), sec-tions 1(5), 1(6), 3(2), 3(3)(c)

Counsel For the appellants: Okey Okoroji For the respondents: M.A.I. Idigbe (with him S.W. Amaduobogha)

Judgment OGUNTADE JCA: (Delivering the lead judgment) On 27 April, 1998, the appellants were brought before Zone 4, La-gos of the Failed Banks Tribunal on a charge of stealing. Their pleas were not taken, and they were remanded at Ikoyi Prisons. The appellants (as applicant(s) brought an applica-tion ex parte at the Ikeja High Court for a Writ of Habeas Corpus to issue against the respondents. An Order Nisi was made in favour of the appellants and the return date was 17 July, 1998.

The appellants as they should do also filed an originating summons for a writ of Habeas Corpus with a view to get-ting an order absolute for their release. However, on 17 Au-gust, 1998, the respondents filed a notice of preliminary ob-jection wherein they contended:– “(a) That by virtue of the provisions of section 1(5) of the Failed

Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) this Honourable Court does not possess power and or jurisdiction to exercise supervisory or judicial review over the respondent and the Failed Banks (Recovery of Debts) and Other Financial Mal-practices in Banks Tribunal Zone 4, Lagos, the


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applicants having been detained by the respondent pursuant to order of the Failed Banks Tribunal.

(b) That the applicants having been remanded in Prison Cus-tody by the Failed Banks (Recovery of Debts) and Other Financial Malpractices in Banks Tribunal Zone 4, Lagos, this Honourable Court has not jurisdiction to issue a writ of Habeas Corpus or any other writ of Judicial Review in re-spect of the applicants.

(c) That the respondents herein in holding the applicants in cus-tody were acting under the orders of a Tribunal of compe-tent jurisdiction remanding the applicants in Prison Custody which said Tribunal orders this Honourable Court cannot review under the law setting up the Tribunal.

(d) That by virtue of the provisions of section 1(6) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 the action herein for Habeas Corpus and other orders of judicial review of the actions of the respondents and that of the Failed Banks (Recovery of Debts) and Other Financial Malpractices in Banks Tribunal Zone 4, Lagos ought to abate forthwith and be deemed dis-continued and non-existent.

(e) That by virtue of the provisions of section 3(3)(c) of the Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994, the Failed Banks Tribunal is a Court of co ordinate jurisdiction and power with the Federal High Court and therefore not being an in-ferior Court to this Honourable Court, this Court cannot ex-ercise supervisory or Appellate jurisdiction over it, neither does this Court have power of judicial review over the Failed Banks Tribunal.

The entire proceedings herein is incompetent, null and void and ought to be struck out.”

The lower Court (Coram Adesanya, J on 14 August, 1998) in a considered ruling upheld the preliminary objection by the respondents and struck out the originating summons for the writ of Habeas Corpus subjiciendum on the ground that the High Court had no jurisdiction over the matter.

The appellants were aggrieved by the order striking out their originating summons. On 21 August, 1998, they filed their Notice of Appeal wherein they raised two grounds of


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appeal against the ruling. In their appellants’ brief the issues for determination were identified as the following:– “1. Is the Failed Banks Tribunal as constituted under Failed

Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 an inferior Tribunal and therefore not a superior Court of Record, having regards to section 6 of the Constitution of the Federal Republic of Ni-geria (1979 as amended)?

2. Whether the High Court can exercise supervisory jurisdic-tion by way of Habeas Corpus, certiorari and prohibition over the Failed Banks Tribunal where the Tribunal acts out-side the Decree governing its operation, notwithstanding the ouster provisions in Decree No. 18 of 1994.”

I think that the manner in which the issues for determination in this appeal were framed is rather misleading. The relevant issue in my view is whether or not State High Court has su-pervisory jurisdiction over a Failed Banks Tribunal created under Decree No. 18 of 1994. It may well be that where a Failed Banks Tribunal fails to comply with Decree No. 18 of 1994, or where it is shown that the Decree or some of its pro-visions are for some reasons invalid the High Court may have jurisdiction. But to be able to argue along such lines, the acts of impropriety ascribed to a Failed Banks Tribunal must first be identified to enable the High Court determine whether or not the Failed Banks Tribunal has failed in some way to com-ply with the provisions of Decree No. 18 of 1994 which cre-ated it. If on the other hand, it is the complaint that a particu-lar provision of the Decree or the Decree itself is invalid, the reason for such invalidity must be shown. Was it that the de-cree did not in its tenor comply with the provisions of another Laws or Enactment which was superior to it?

Now in the Affidavit filed in support of the ex parte appli-cation by the appellants, the facts they relied upon read thus:– “3. That on the 27 April, 1998, the applicants were brought

before the Failed Banks Tribunal Zone 4, Lagos, on a criminal charge of stealing.

4. That without the charge being read or plea taken before the said Tribunal Chairman issued a detention warrant


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authorising the respondents to detain the applicants at lkoyi Prisons, Lagos.”

It is made manifest in the above affidavit that the complaint of the appellants was that the Failed Banks Tribunal con-cerned caused them to be detained at Ikoyi Prisons at a time when the charge has not been read to them or their pleas taken. Would this be enough reason to argue that the High Court should assume supervisory jurisdiction over the Tri-bunal? Did the Failed Banks Tribunal lose its claim to the protection afforded it under Decree No. 18 of 1994 just be-cause the pleas of the appellants were not taken before they were remanded in prison custody?

Section 3(2) and (3) of Decree No. 18 of 1994 dealing with the powers of the Failed Banks Tribunal on remand and other matters read thus:– “3(2) The Tribunal shall exercise exclusive jurisdiction over all

ancillary matters including remand, bail and any other preliminary issues connected with an offence or hearing over which the Tribunal has jurisdiction.

(3) a. . . . b. . . . c. have all the powers of the Federal High Court (in this

Decree referred to as ‘the Court’) and accordingly the judgment and decisions of the Tribunal shall be executed and enforced in the same way and manner as the judgments and order of the Court.”

It seems to me that Failed Banks Tribunal created under De-cree No. 18 of 1994 has ample powers to remand in custody any person brought before it upon a criminal offence. It is to be noted that the complaint of the appellants was not that it was remanded for a period considered unreasonably long or that the conditions of bail granted were so onerous that the appellants could not meet them or that the Tribunal has in consequence of the exercise of powers derived under Decree No. 18 of 1994 caused a harm or injury to them against the letter and spirit of the African Charter on Human and Peo-ples’ Rights (Ratification and Enforcement) Act Cap 10 Laws of the Federation of Nigeria, 1990.


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Section 1(5) and (6) of Decree No. 18 of 1994 provides:– “(5) Notwithstanding the provisions of the Constitution of the

Federal Republic of Nigeria, 1979, as amended, or any en-actment to the contrary, the supervisory jurisdiction or power of judicial review of a High Court shall not extend to any matter or proceedings before the Tribunal duly consti-tuted under this Decree.

(6) Subject to section 2 of this Decree, if any proceedings relat-ing to the supervisory jurisdiction or power of judicial re-view of a High Court on a cause or matter brought before the Tribunal is before any High Court after the com-mencement of this Decree, such action shall abate, cease or be deemed to be discontinued without any further assurance other than this Decree.”

The lower Court in the ruling appealed against observed:– “The argument of learned Counsel is that trial commences when plea is taken. Because the plea is not taken and the applicants were or-dered to be remanded in Prison Custody, the act is illegal. The proce-dure for the prosecution of cases before the Tribunal is set out in Schedule 2 of Decree No. 18 of 1994. Since the Tribunal has exclu-sive jurisdiction over all ancillary matters including remand, bail and any other preliminary issues connected with an offence of hearing over which the Tribunal has jurisdiction, it is not for this Court to say whether the procedure adopted is legal or illegal. The complaint should be taken up before that Court or the Appellate Court. I have earlier referred to section 1(5) of Decree No. 18 of 1994 that the su-pervisory jurisdiction or power of judicial review of High Court shall not extend to any matter or proceeding before the Tribunal.”

I am satisfied that the lower court was right in its reasoning. In Osadebay v Attorney-General of Bendel State (1991) 1 NWLR (Part 169) 525 at 571, the Supreme Court per Bel-gore, JSC said:–

“Any Decree ousting the jurisdiction of the court does so effec-tively because a Decree is a special creature of the military to shield their own peculiar method of governance; it is for this rea-son they make their Decrees superior even to the Constitution. Section 12 of Decree No. 34 of 1968 is clear and it should not be beclouded by court induced ambiguity. When there is no jurisdic-tion, the court will act ultra vires should it venture to assume one; for a court embarking on the hearing of a matter not within its ju-risdiction is exercising in moot, a function not that of court (See Barclays Bank of Nigeria Ltd v Central Bank of Nigeria (1976) 6 SC. 175.) The peculiar circumstances of a military regime is a point in issue, much as the military exercise governance and do so


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effectively, their protective laws must be obeyed; and once the Decrees are clear and unambiguous as to ouster of courts jurisdic-tion in certain subject matters the courts indeed have no jurisdic-tion. (See Attorney-General, Lagos State v Dosunmu (1989) 3 NWLR (Part 111) 552 and Uwaifo v Attorney-General, Bendel State (1982) 7 SC. 124.)”

And at page 572 of the same report Belgore, JSC went on:– “It must be pointed out that courts are creature of statue based on the constitution. Their jurisdiction are based on statutes and no court assumes jurisdiction without enabling statute. Jurisdiction cannot be implied where there is no statute to back it up. (Ariyo v Ogele (1968) 1 All NLR 1; Timitimi v Amabebe (1953) 14 W.A.C.A. 374). When there is no jurisdiction it is futile exercise for a court to em-bark on the hearing of a matter (Attorney-General of the Federation v Sode (1990) 1 NWLR (Part 128) 500, 503, 504).”

In Agwuna v Attorney-General of Federation (1995) 5 NWLR (Part 396) 418, the Supreme Court had to consider the effect of section 1(8), (9) of Decree No. 9 of 1991 which is in ipsissima verba with section 1(5) and (6) of Decree No. 18 of 1994 on the supervisory jurisdiction of the High Court over a Tribunal created under Decree No. 9 of 1991. The Court per Iguh, JSC said at page 437:–

“A close study of the above provisions of section 21(1) of the Re-covery of Public Property (Special Military Tribunals) Act, section 11(1) of the (Special Tribunal Miscellaneous Offences) Act and sec-tion 1(8), 1(9) and 1(10) of the Tribunals (Miscellaneous Provi-sions) Decree No. 9 of 1991 disclose in no uncertain terms that these legislations are very carefully worded and promulgated with a clear, definite and unambiguous intention on the part of the law-makers to oust the supervisory jurisdiction or the power of judicial review of the High Court in respect of a cause or matter brought or determined by Tribunals concerned. Although therefore the powers of the superior courts of record such as the High Court are great and indeed wide, they are certainly not unlimited. They can be and are indeed sometimes properly limited by ouster of jurisdiction clauses in some legislations such as those above mentioned. (See Shodeinde v Registered Trustees of Ahmadiya Movement in Islam (1980) 1–2 SC. 163; Olaniyi v Aroyehun (1991) 5 NWLR (Part 194) 652 at 685; Attorney-General of the Federation v Sode (1990) 1 NWLR (Part 128) 500 at 517.) I accept that although it has always been the practice of the courts to guard their jurisdiction jealously. If in any given case that jurisdiction is expressly ousted by the provisions of the Constitution, an Act of Parliament or a Decree, then the path of


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justice must dictate compliance with such an ouster of jurisdiction clause especially as under our present Constitution, Decrees are the Supreme Laws of the land.”

A perusal of section 1(5) and 1(6), and section 3(2) and 3(3)(c) of Decree No. 18 of 1994 make it clear that the inten-tion of the law maker is that the High Court shall not have a supervisory jurisdiction over a Failed Banks Tribunal.

I need to say here that I have not tested in this appeal the validity of Decree No. 18 of 1994 or any of its provisions against the African Charter on Human Rights (Ratification and Enforcement) Act Cap 10 Laws of the Federation, 1990 because the occurrence against which the appellants have complained by their Notice of Appeal has not raised any is-sue of infraction of the Provision of Cap 10.

The arguments of the appellants in their brief relating to whether or not the Failed Banks Tribunal is a superior court of record with reference to the Constitution of the Federal Republic of Nigeria is completely irrelevant and a moot is-sue. Whether or not a Tribunal created under a Decree is a superior court of record would depend on the powers granted to the Tribunal concerned by the Decree which cre-ated it. The issue soon dissolves into insignificance when it is remembered that under our Military Governance a Decree is regarded as supreme and superior to the provisions of the 1979 Constitution of Nigeria (as amended).

In the result, this appeal fails and is dismissed. I affirm the ruling of Adesanya, J made on 14 August, 1998. I made no order as to costs. GALADIMA JCA: I had before now the privilege of reading in draft the Judgment of my learned brother, Oguntade, JCA. I agree with him that there is no merit in this Appeal. It is ac-cordingly dismissed. I equally affirm the ruling of Adesanya, J made on 14 August, 1998. I make no order as costs. ADEREMI JCA: I have been privileged to read, in advance, the judgment just delivered by my learned brother, Ogun-tade, JCA. I am in full agreement with his reasoning and conclusions. I adopt the judgment as mine. I also dismiss the appeal and affirm the judgment of the court below. Appeal dismissed.


Societe Generale Bank Nig Ltd v. Litus Torungbenefade Afekoro 627

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Societe Generale Bank Nigeria Ltd v Litus Torungbenefade Afekoro and others

SUPREME COURT OF NIGERIA WALI, OGUNDARE, MOHAMMED, ACHIKE, EJIWUNMI JJSC Date of Judgment: 16 JUNE, 1999 Suit No.: SC/196/1994

Banking – Funds in a bank account – Transfer of from one account to the other – Whether police competent to effect transfer Police – Funds in a bank account – Transfer of from one ac-count to the other – Competence of police to order Words and Phrases – “Person aggrieved” for the purposes of appealing – Who qualifies Facts The appellant was banker to the first respondent herein. The latter maintained a Savings Account No. 07112515193 with the bank. In 1986 Chief John Muoghalu, Chairman/ Managing Director of the third respondent reported the theft of the sum of seven million naira (N7,000,000) belonging to the third respondent, following which Police commenced investigations. In the course of Police investigations the ac-counts of Farlob (Nigeria) Ltd and Toyem Enterprises Nige-ria Limited both with the appellant were frozen and the bal-ances totalling N2,727,655.50 transferred into a suspense account with the appellant at the instance of the Police.

The Police subsequently requested the appellant to transfer the amount lodged in the suspense account to IMB (Interna-tional Merchant Bank) Victoria Island account of Alliance International (Nigeria) Limited with Account No. 12050220. The appellant however sought and obtained an indemnity against claims from the third respondent, before carrying out the request. Meanwhile, the first respondent attempted to op-erate his savings account with the appellant but was told that the account had been frozen on the orders of the Police. Thereupon, first respondent by originating summons insti-tuted an action against the second respondent (IGP) wherein he challenged the Police directives affecting his account as



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being ultra vires, unconstitutional, illegal and void. It was his case that the second defendant had no power or right to issue such a directive. He claimed that he was entitled to operate and or withdraw from his savings account no. 07112515193 which stood at N487,539 as at 16 December, 1986.

The trial court after addresses of Counsel for the parties found in favour of the first respondent and ordered that the first respondent be allowed to operate and withdraw from his account. There was no appeal against the ruling by any of the parties to the proceedings.

Subsequently, the appellant sued the third respondent in suit no. LD/856/91 claiming a refund to it of the sum of N487,539 paid to the first respondent as a result of the deci-sion. This was after unsuccessful demands made by the ap-pellant on the third respondent for payment on the basis of the indemnity the latter gave the former in March, 1988. Pleadings had been filed and served in the case and was yet to be tried when the third respondent on 13 May, 1992 filed a motion at the Court of Appeal for an order for extension of time within which to apply for leave to appeal as a party in-terested, leave to appeal and extension of time within which to appeal. The Court of Appeal granted the application.

Dissatisfied with that decision the appellant appealed to the Supreme Court.

Held – 1. In law, the police have no power or authority to order or

direct or request a bank to transfer money from a suspense account with it to another account with another bank.

2. The words “person aggrieved” do not really mean a man who is disappointed of a benefit which he might have received if some other order had been made. A person aggrieved must be a man who has suffered a legal griev-ance, a man against whom a decision has been pro-nounced which has wrongfully deprived him of some-thing, or wrongfully refused him something, or wrong-fully affected his title to something.

Appeal allowed.



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Nigerian Ajayi v Moregbe (1993) 6 NWLR (Part 301) 512 Akande v General Electric Co (1979) 3 L.R.N. 187 Fawehinmi v N.B.A. (No. 2) (1989) 2 NWLR (Part 105) 558 Ikonne v C.O.P. (1986) 4 NWLR (Part 36) 473 In re Afolabi (1987) 5 NWLR (Part 63) 18 In re Ugadu (1989) 5 NWLR (Part 93) 189 Ogbechie v Onochie (1986) 2 NWLR (Part 23) 484 Ojemen v Momodu II (1983) 1 SCNLR 188 Popoola v Adeyemo (1992) 8 NWLR (Part 257) 1 Sun Insurance Office Ltd v Ojemuyiwa (1965) 1 All NLR 1

Foreign Ex parte Sidebotham (1980) 14 Ch.D 458

Nigerian statute referred to in the judgment Constitution of the Federal Republic of Nigeria, 1979, sec-tion 222(a)

Judgment OGUNDARE JSC: (Delivering the lead judgment) The appel-lant herein was at all times relevant to this case a banker to the first respondent, Litus Torungbenefade Afekoro who had a Savings Account No. 07119515193 at the Bank. Sometime in 1986, Chief John Ekwuba Muoghalu, chairman/managing director of the third respondent reported to the police that a sum of Seven Million Naira (N7,000,000) belonging to the third respondent was stolen by some persons in consequence of which report, police commenced investigations. In the course of police investigations the accounts of Farlob (Nige-ria) Ltd and Toyem Enterprises Nigerian Limited both with the appellant, were frozen and the balances totalling N2,727.655.50 were transferred into a suspense account with the appellant.


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By a letter Ref. No. CR.3000/X/C/Vol.42/508 dated 18 February, 1988 the Police requested the appellant to “trans-fer the amount lodged in the (suspense) account to IMB (‘International Merchant Bank’), Victoria Island, Lagos ac-count of Alliance International (Nigeria) Limited with ac-count No. 12050220”. Before carrying out this request the appellant sought and obtained from the third respondent an indemnity against claims that might be made on it in respect of the sum of money being transferred into the account of the third respondent.

Meanwhile, the first respondent attempted to operate his savings account with the appellant but was told that the ac-count had been frozen on the orders of the police. There-upon, the first respondent instituted by originating sum-mons, an action (Suit No. M/664/89) against the appellant and the second respondent claiming:– (i) That the directive of the second defendant to the first defen-

dant contained in the letter reference no. CB/300/X/C/Vol.42/508 dated 18 February, 1988, signed by C.T. Duwon (DCP) (for AIG) for the Director of Investigation and Intelligence, Lagos. Exhibit LTA 5 attached herewith ad-dressed to the defendant/respondent directing the first defen-dant to transfer monies in the accounts of Toyem Enterprises (Nigeria) Ltd and Farlob Nigeria Ltd to the account of Alli-ance International Nigeria Ltd Account No. 120501 220 is ul-tra vires, unconstitutional, illegal and void. The second defen-dant has no power and or right to issue such directive.

(ii) That the directive contained in the letter exhibit LTA 5 at-tached and referred above giving specific companies ac-counts Toyem Enterprises Nigeria Ltd and Farlob Nigeria Ltd) as the subject matter of the said letter was not refer-able to plaintiff/applicant’s Private Savings Account Num-ber 07112515193 L.T. Afekoro and any action of the first defendant in transferring the amount from the account to the account of Alliance International Nigeria Ltd is ultra vires, unconstitutional, illegal and void, a breach of the Banking rules and practice and a breach of duty of care ex-isting between plaintiff and first defendant.

(iii) That the account of the plaintiff that is Savings Account No. 071 12515193 is not affected by the directive contained in the letter reference No. CR/3000/X/C/Vol.42/508 of 18 February, 1988.


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(iv) That the defendant is bound to act on the directive from Commissioner of Police in the letter reference number CR/3000/X/C/Vol.T2 16 March, 1989. Exhibit LTA 5 here-with wherein that since investigation revealed plaintiff is not involved in the fraud of seven million Naira and that his account be defrozen.

(v) That the plaintiff is entitled to operate and or withdraw from his savings Account No. 07112515193, which stood at N487,539 as at 16 December, 1986 as per exhibit LTA and Continue to add interests at the Bank’s rate till today. And for such further order or other orders this Honourable Court may deem fit to make in the circumstances.”

In the affidavit in support of the summons, the first respon-dent deposed, inter alia, thus:– “1. That I became a customer in the defendant’s bank in 1982

when I opened and commenced operation of a personal Savings Account Number 07112515193 – photocopies of Identity Card issued to me and 1982 State and me (sic) of Account are attached herewith and marked as exhibits LTA 1 and LTA 1a.

2. That in the course of the operation of the Savings account, I paid on the 27 March, 1986 a sum of N487,500 photocopy of the teller is attached herewith and marked exhibit LTA 2.

3. That the sum of N487,500 deposited on 27 March, 1986 in my account referred to in paragraph 2 above was part of the profit due to me on a business transaction with the follow-ing persons namely Chief John Muoghalu, Godfrey, Uyi Alemezonu, Alhaji Imam, Dayo and myself.

4. That the business venture yielded a profit of a total sum of Fourteen (14) Million Naira.

5. That Chief Muoghalu, the Principal Business Partner took Seven Million Naira and handed over Seven Million Naira to Godfrey Uyi Alemezonu to be distributed amongst us namely Godfrey Uyi Aiemozonu, Alhaji Imam, Dayo and myself.

6. That in the course of such distribution, Alhaji Imam was given four million Naira, which was paid to his Lobi Bank – Ikeja Branch account. Draft of N600,000 paid to Dayo’s account with First Bank of Nigeria Ltd and in addition cash of N125,000, a sum of N487,500 was paid to my Savings account number 07112515193 as shown on exhibit LTA2.


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The remaining amount was in Godfrey Uyi Alemozonu’s account with the defendant’s Bank.

7. That Godfrey Uyi Alemozonu was a former Senior Bank Officer in the defendant’s Bank and his share of the trans-action amounting to One Million, Nine Hundred and Thir-teen Thousand Naira was paid to defendant’s Banks in the name of the Companies, Toyem Enterprises Nigeria Ltd and Farlob Nigeria Ltd.

10. That sometime around July/August, 1986 while attempting to withdraw from my Savings Account 07112515193, the Assistant Manager in the Savings Department of the defen-dant’s Bank informed me and I believed him that the Assis-tant Inspector General of Police has instructed them to freeze the account pending investigation.

16. That the Assistant Manager in the Savings Department at the defendants Bank (Mr Bruce) told me in the presence of my Solicitor (N.A.B. Animashaun) that my account was frozen from July, 1986 because of the directive contained in a letter reference No. CR.300/X/T/ADMN/177 dated 2 July, 1986, subject matter L.T. Afekoro Savings Account Number 07112515193 to be suspended on account of in-vestigation of fraud of Seven Million Naira but failed to make a copy available to us.

17. That the Assistant Manager (Mr Bruce) also informed me and my Solicitor of the letter reference number CR.300/X/C/Vol. 42/508 dated 18 February, 1988 and handed a photocopy to us. The photocopy is attached here-with and marked exhibit LTA 5.

18. That the Assistant Manager (Mr Bruce) in the defendants Bank further told both myself and my Solicitor that the Bank had acted in compliance with the directive contained in the letter referred to in paragraph 17 and exhibited as LTA 5.

19. The Assistant Manager (Mr Bruce) later told us except a specific letter comes from the Police Office defreezing my suspended account, there was nothing the defendants’ Bank could do.

22. That the Commissioner of Police Investigation Department forwarded a letter reference number CR.3000/X/C/Vol. l/T2/16 of 31 March, 1989 to the Manager of the defen-dants’ Bank to allow me operate my account as I have been found not to be involved in the said fraud after completion of Police investigation photocopy of the letter is attached herewith and marked exhibit LTA 7.


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23. That I was never arrested nor detained and was never inter-rogated or tried in any Court as regards any charge of con-spiracy and or stealing and or fraudulent acquisition of the sum of N487,500.”

A number of documents were attached to this affidavit, among which were exhibits LTA 5 – a letter dated 18 Febru-ary, 1988 addressed to the appellant by the police and signed by C.T. Duwon, DCP, LTA6 written by the first respondent to the police requesting that his account be defrozen and LTA7 written by the police to the appellant and dated 31 March, 1989 de-freezing first respondent’s account. I shall say more on exhibits LTA 5 and LTA 7 in the course of this judgment.

The second respondent filed a counter-affidavit in which one Jacob Ademuyiwa, Assistant Superintendent of Police at the Federal Investigation and Intelligence Bureau, Alagbon Close, Lagos deposed:– “2. That I was in the team of officers who investigated this

case. 7. That Chief John Muoghalu reported to the Police that 4

(sic) men namely Alhaji Yakubu Iman, Godfrey Uyi Ale-mezohu, and George Dayo had conspired to defraud him of the sum of N7 Million.

8. That investigation revealed that the said 3 men (namely Al-haji Yakubu Iman, Godfrey Uyi Alemezonu, George Dayo) had obtained the sum of N7 million Naira from him (com-plainant) on the pretext that they would open a letter of credit for Mr John Muoghalu for the importation of tobacco leaves.

9. That the sum of N7 million was paid by the complainant to the said 3 man syndicate as follows:–

(a) Co-operative and Commerce Bank Drafts Nos. 040057 dated 3 March, 1986 for N40,000 AO 038589 dated 19 February, 1986 to N1,160,000 and No. 040056 dated 3 March, 1989 for N2,000,000 in favour of Toyem En-terprises Nigeria Ltd. The above mentioned bank drafts are marked exhibits A1, A2 and A3 respectively.

(b) Co-operative and Commerce Bank Draft No. 040055 dated 3 March, 1986 for the sum of N3,800,000 in


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favour of Farlob Nigeria Ltd copy of said bank draft is hereby attached and marked exhibit A4.

10. That the above-mentioned cheques were paid by the com-plainant (Chief Muoghalu) to Toyem Enterprises (Nigeria) Ltd and Farlob Nigeria Ltd on the instructions of the said 3-man syndicate.

11. That Toyem Enterprises Nigeria Ltd and Farlob Nigeria Ltd are both customers of Societe Generale Bank, Broad Street, Lagos.

13. That no letter of credit was ever opened by the said 3-man syndicate in favour of Chief J Muoghalu.

14. That the three cheques (exhibits A1, A2, A3) paid by the complainant into the account of Toyem Enterprises Nigeria Ltd, totalling a sum of N3,200,000 was shared by the said 3-man syndicate including the plaintiff Mr Litus T. Afe-koro.

15. That Mr Godfrey Uyi Alemezonu gave a detailed account of how the said N3,200,000 was shared.

16. That investigation revealed that Mr Godfrey Uyi issued a Cheque No. 04315-dated 28 May, 1986 in the name of Akeem Yinusa for the sum of N487,500 cashed and rede-posited in the applicant’s (Mr Litus T. Afekoro) account with Societe Generale Bank Broad Street, Branch. Copy of the said Cheque for N487,500 is hereby attached and marked exhibit A5.

17. That the cheque paying the sum of N487,500 into the plain-tiff’s account at Societe Generale Bank was issued and verified by Mr Godfrey Uyi Alemezonu.

18. That out of the sum of N487,500 paid into the plaintiff’s account by the said Mr Godfrey Uyi-Alemezonu, paid out the sum of N25,000 on Savings Account Withdrawal (SAW) slip No. 438483 dated 1 April, 1986 leaving a bal-ance of N462,155.60 mentioned in paragraph 24 of the plaintiffs said affidavit, copy of the said SAW slip is hereby attached and marked exhibit A6.

19. That it was the balance of N462,500 left in the plaintiff’s account that was blocked and paid into the account of the Complainant with International M.B.”

I pause here to observe that some facts deposed to by this deponent could not have come from his own personal knowledge but either hearsay or matter of opinion. Some other paragraphs appear to conflict with exhibit LTA 7.


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The appellant, seeing itself as a mere stakeholder did not file any counter-affidavit.

The learned trial Judge, after addresses by learned Counsel for the parties, in a reserved ruling delivered on 26 January, 1990, adjudged as hereunder:–

“I hold that sufficient facts and particulars have not been given by the plaintiff in the Originating Summons and supporting affidavits from which I could infer his locus standi whereby I could declare the orders of the second defendant in relation to relief 1 and 11 as ultra vires, unconstitutional, illegal and void. See:–

(1) Bello v Attorney-General of Oyo State (1986) 5 NWLR (Part 45) 828;

(2) Fawehinmi v Akilu (1987) 4 NWLR (Part 67) 797; (3) Egbe v Adefarasin (1987) 1 NWLR (Part 47) 1; (4) Ibrahim v Osim (1988) 3 NWLR (Part 82) 257” The plaintiff’s locus standi having not been disclosed, his claim in respect of the relief 1 and 11 must be dismissed on that ground and it is hereby dismissed.

In view of exhibit LTA7 his claim in respect of reliefs III, IV, and V, succeeds and I hold accordingly.

It is hereby ordered that:– “(1) That the account of the plaintiff that is savings accounts no.

07112515193 is not affected by the directive contained in the letter reference no. CR/3000/X/C/Vol.42/508 of 18 Feb-ruary, 1988;

(2) That the defendant is bound to act on the directive from Commissioner of Police in the letter reference No. CR/3000/X/C/Vol.T2/46 of 1 March, 1989 exhibit LTA7;

(3) That the plaintiff is entitled to operate and or withdraw from his Savings Account No. 07112515193, which stood at N487,539 as at16/12/86, and continue to yield interest at the Bank’s rate till today.”

All parties to the originating summons proceedings appeared satisfied with this decision as none of them appealed. Rather, the appellant sued the third respondent in Suit No. LD/856/91 claiming a refund to it of the sum of N487,539.50 paid to the first respondent as a consequence of the decision. This followed unsuccessful demands made


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by the appellant to the third respondent for payment on the basis of the indemnity the latter gave to the former in March 1988. Pleadings have been filed and served in the case and was yet to be tried when the third respondent on 13 May, 1992 filed a motion in the Court of Appeal (Lagos Division) praying for the following orders:– “(i) An order extending the time within which the applicant can

apply for leave to appeal as a person having interest in the case;

(ii) Leave to appeal pursuant to section 222(a) of the 1979 Con-stitution as amended as a person having interest in this case;

(iii) Extension of time within which the applicant can file and serve its Notice and Grounds of Appeal against the decision of Adeniji, J. of the Lagos High Court delivered on the 26 January, 1990.”

In the affidavit in support, Chief John Ekwoba Muoghalu, its Chairman/Managing Director deposed, inter alia, as hereunder:– “3. That sometime in 1986, the applicant through my humble

self was duped of the sum of N7 million (Seven Million Naira) by a 4-man syndicate of international dupes which included one Godfrey Uyi Alemezonu a Manager in the employment of Societe-Generale Bank of Nigeria Limited, the second respondent in this application (hereinafter re-ferred to as the ‘SGBN’).

4. That the fraud was perpetrated by the syndicate using the SGBN as their platform.

5. That when I discovered the fraud, I contacted the Federal Investigation and Intelligence Bureau, Alagbon Close, Ikoyi who promptly investigated the case and retrieved part of the money already paid in by the dupes into their various accounts at SGBN under companies and individual names.

6. That among those whose accounts were investigated and frozen by the police was account operated by Farlob (Nige-ria) Ltd and Toyem Enterprises Nigeria Limited through the said Manager of SGBN in collaboration with Mr Afe-koro.

7. That in the course of sharing their N7 million loot, the sum of N487,500 cash, among other sums, was paid out of the account of Toyem Enterprises (Nigeria) Ltd in fa-vour of one ‘Akeem Yinusa’, a fictitious name used by the SGBN Manager/collaborator. The said sum of money was


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simultaneously re-deposited in the savings account operated by Mr L.T. Afekoro, the first respondent in this application, himself a key figure in the perpetration of the fraud.

8. That the Police was able to trace this sum of N487,500 in the savings Account of Mr Afekoro because they discov-ered that there was no person that owned up the name ‘Akeem Yinusa’ during their investigation.

9. That upon this finding, the Police then directed the SGBN in writing to transfer all moneys recovered in the bank and placed in suspense account and found to belong to the ap-plicant into an account opened at the International Merchant Bank Limited (hereinafter referred to as the ‘IMB’) Victoria Island, Lagos.

10. That the amount so recovered and placed into SGBN sus-pense account was N2,727,655.60.

11. That the SGBN agreed to transfer the said sum of money to IMB provided that the applicant gives them an indemnity for the said amount.

12. That consequently, the applicant company gave a written indemnity to the second respondent against actions, pro-ceedings, demands, claims and expenses which it may sus-tain by reason of releasing the money to the applicant’s ac-count in the IMB.

13. That this indemnity was given on behalf of the applicant by my humble self under the belief that the bank would notify the applicant of any action, demand proceeding or claims by any person in connection with the recovered money.

14. That on the contrary, one Mr L.T. Afekoro filed an originat-ing summons, the subject of this application wherein he claimed, inter alia, that:–

(i) The directive of Inspector-General of Police to SGBN contained in letter IB/300/XC.Vol.42/502 of 18 Feb-ruary, 1988 signed by C.T. Duwon (DCP) (for IG) D.I.I. Lagos addressed to SGBN directing the Bank to transfer monies in the account of Toyem Enterprises (Nigeria) Ltd and Farlob Nigeria Ltd to the account of Alliance International Nigeria Ltd at IMB is ultra vires, unconstitutional, illegal and void. That IGP has no power and or right to issue such directive.

(ii) That the Inspector-General of Police’s letter of 18 February, 1988 was not referable to Mr Afekoro’s private Savings Account Number 071125193 and that any action of the SGBN in transferring money


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from the savings account of Alliance International Nigeria Ltd account at IMB is ultra vires unconstitu-tional, illegal and void a breach of the banking rules and practice and a breach of duty of care existing be-tween Mr Afekoro and SGBN.

(iii) That the account of the first respondent was not af-fected by the directive contained in the Police letter aforementioned and that the bank was bound to act on a letter by the Police directing that the said ac-count be frozen.

(iv) That Mr Afekoro was entitled to operate and/or with-draw from his Saving Accounts No. 07112515193 which stood at N487,539 at 16 December, 1986 and continue to add interests at the bank’s rate till date.

15. That the bundle of documents now attached to this affidavit and marked as exhibit A is the certified true copies of the documents and proceedings in the said application and numbered from pages 1 to 45.

16. That the second respondent, SGBN entered an appearance but did not file any counter affidavit to the application nor did it make any other diligent effort to oppose the applica-tion.

17. That the second respondent did not also notify the applicant about the pendency of the suit knowing fully well that the applicant was a party to be affected one way or the other, by the consequential order to be made by the court in the proceedings.

18. That it was only the third respondent, the Inspector-General of Police that made effort to oppose the application by filing a counter-affidavit which the trial judge discountenanced in the course of his ruling (see page 30 of exhibit A).

19. That in what appeared to be a collusion between Mr Afekoro (ie the first respondent herein) and the SGBN (the second re-spondent), the trial judge, Adeniji J, after holding that Mr Afekoro lacked locus standi to pursue reliefs 1 and 11 of his originating summons, strangely granted his other reliefs (iii, iv and v) in the said summons without any regard what-soever to the counter-affidavit filed by the Police in opposi-tion to the application or directing that the applicant be joined as a party in the case (see pages 44–46 of exhibit A).

20. That relying on the said ruling the second respondent (SGBN) purportedly paid Mr Afekoro the sums of N487,539.50 plus interest of N143,260.19 without inform-ing the applicant or the Police.


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21. That thereafter on the 26 March, 1990, the second respon-dent wrote to the applicant informing it of the court case and ruling and demanding for the said sum of money to be repaid to it by the applicant.

22. That this demand was rejected by the applicant in no unmis-takable terms in the various letters it wrote to the second re-spondent.

23. That the second respondent has now commenced legal pro-ceeding against the applicant in Suit No. ID/856/91 at a La-gos High Court claiming the sum of N630,799.69 represent-ing the said sum purportedly paid to Mr Afekoro in obedi-ence to the judgment of the Lagos High Court in the Origi-nating Summons aforesaid.

26. That arising from the issues joined in the pleadings particu-larly paragraphs 50 of the statement of defence, paragraphs 9 and l 0 of the counter claim as well as paragraph 14 of the Reply, I was informed by Emeka Ngige, Esq. of Counsel and I verily believed him that it has become necessary for the applicant to seek the prayers mentioned in the motion paper so that the matters in controversy between the af-fected parties can be fully and finally resolved by the Hon-ourable Court.

27. That consequently, I verily believe that it will be in the in-terest of justice if this Court grants the applicant an order extending the time within which it can apply for leave to appeal as an interested party in this case, leave to appeal as an interested party and an extension of time to file and serve the Notice and Grounds of Appeal.”

Annexed to the affidavit was the proposed Notice of Appeal.

There was a further affidavit in which the reason for not bringing the motion was explained. The further affidavit was in response to the appellant’s counter-affidavit. There was yet a further affidavit to which was annexed the letter of in-demnity issued by the third respondent to the appellant and dated 7 March, 1988.

At the hearing of the motion the first and second respon-dents were absent and were not represented by Counsel. Af-ter hearing learned Counsel for the third respondent and the appellant, the Court of Appeal per Sulu-Gambari, JCA


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(Uwaifo and Ayoola, JJCA as they were then concurring), adjudged as follows:–

“I am of the firm view that from the material before us the appli-cant has sufficient interest in the matter and cannot be said to have no locus standi. The applicant lays claim to the sum in Afekoro’s account for which he was required to enter into an indemnity in order to de-prive Afekoro of access to his (Afekoro’s) account when an order is made which calls for the indemnity to be enforced the interest of the applicant is affected. I cannot see how this application can amount to an abuse of court’s process in regard to the averment in the counter claim in the case at the lower court. In conclusion I think the applicant is entitled to the prayers sought in this application. Accordingly time to apply for leave to appeal as an interested per-son is extended till today. Leave to appeal is granted today. Time within which the applicant may file notice of appeal is extended to 21 days from today.”

The appellant is dissatisfied with this decision and has ap-pealed to this Court upon two grounds of appeal.

The appellant and the third respondent filed and ex-changed their respective briefs of argument and their learned Counsel proffered oral arguments at the oral hearing of the appeal. The first and second respondents did not take part in the appeal.

In the respondent’s brief, the third respondent raised ob-jection to the competence of the appeal. It is contended that the two grounds of appeal contained in the Notice of appeal are of mixed law and fact and leave was not sought nor ob-tained before the appeal was filed, it is incompetent. The following cases are cited in support. (See Ogbechie v Ono-chie (1986) 2 NWLR (Part 23) 484; Ojemen and others v Momodu 11 and others (1983) 1 SCNLR 188; Popoola v Adeyemo (1992) 8 NWLR (Part 257) 1 at 33; and Ajayi v Omoregbe (1993) 6 NWLR (Part 301) 512 at 530.) Mr Oye-tibo for the appellant is of the contrary view. He submitted before us that the two grounds of appeal raise questions of law.


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I think Mr Oyetibo is right. In respect of Ground 1, the particular (B) that Mr Ngige, for the third respondent con-tends raises an issue of disputed facts, does nothing of the sort. It is a question of the interpretation of the judgment of the High Court whether it deprived the third respondent of anything. With respect to learned Counsel, Mr Ngige, I do not share his view on Ground (2) either. I find the prelimi-nary objection unmeritorious and it is accordingly struck out.

Two issues are framed in the appellant’s brief. The third respondent also framed two issues but differently worded. Having regard to the decision appealed against and the grounds of appeal I think the two questions arising from de-termination in this appeal are:– 1. Whether the third respondent, having regard to the

facts of the case is a person having an interest in the proceedings within the contemplation of the provi-sions of section 222(a) of the Constitution of the Federal Republic of Nigeria, 1979 and therefore enti-tled to be granted leave to appeal; and

2. Whether the Court of Appeal was right in holding that the third respondent’s application for leave to appeal against the decision of Adeniji, J in Suit No. M1664189 was not an abuse of the process of the court when the third respondent had contended in Suit No. LD/856/91 instituted by the appellant against the third respondent that the said decision was void ab initio and the Lagos High Court was yet to determine the suit.

Question (1) Mr Oyetibo, both in his brief and in oral argument submitted

that for a person not a party to a suit to be entitled to appeal to the Court of Appeal under section 222(a) of the Constitution he must be a person who has a legally recognisable interest in the proceedings in the High Court. He cited passages in Akande v General Electric Co (1979) 3 L.R.N. 187 at 192 and Ikonne v C.O.P. and another (1986) 4 N.W.L.R (Part 36) 473


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at page 497, 503 in support. He submitted that what is relevant is the court’s decision and not the applicant’s claim. Applying these tests to the facts of the case on hand, Mr Oyetibo argued strongly that the third respondent had no legally recognisable interest in the first respondent’s savings account which the po-lice ordered to be transferred (along with other accounts fro-zen) into the third respondent’s account in the IMB. He sub-mitted that the action of the Police was unlawful as it was not exercised under any provision of the Police Act Cap 359 Laws of the Federation of Nigeria, 1990 nor under the Criminal Pro-cedure Act. He further submitted that none of the grounds of appeal in the proposed Notice of Appeal questioned any order made by the trial High Court.

Mr Ngige, for the third respondent, agreed with Mr Oyetibo as to the law applicable and added a passage from the judg-ment In Re: Sidebotham v Ex parte Sidebotham (1980) 14 Ch.D. 458 at 468. He, however, argued that by virtue of the indemnity which the third appellant extracted from the third respondent, any proceedings, actions, claims, demands, ex-penses taken against the appellant would invariably or prejudi-cially affect the interest of the third respondent. Learned Coun-sel referred to the terms of the indemnity and submitted that the third respondent was a party who has suffered a legal grievance and whose title to the money transferred to its IMB account has been wrongfully affected by the decision of the trial High Court. He accused the appellant of colluding with the first respondent in bringing the action. Learned Counsel likened the position of the third respondent to that of the Insur-ance Company in Sun Insurance Co Ltd v Ojemuyiwa (1965) 1 ANLR 1 and In Re: Ugada (1988) 5 NWLR (Part 93) 189. Learned Counsel referred to the letter the appellant wrote to the third respondent before the latter gave its indemnity and argued that on the strength of that letter there was no coercion on the appellant before transferring money to the IMB ac-count. Counsel argued that it was premature to look into the grounds of appeal, this would only be relevant at the stage the appeal was being argued. It is also Counsel’s view that the is-sue of locus standi is not relevant in this appeal.


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Now, section 222(a) of the 1979 Constitution provides:– “Any right of appeal to the Federal Court of Appeal from the deci-sions of a High Court conferred by this Constitution:–

(a) shall be exercisable in the case of civil proceedings at the instance of a party thereto, or with the leave of the High Court or the Federal Court of Appeal at the instance of any other person having an interest in the matter.”

The law appears to be not in dispute. The third respondent not being a named party in the proceedings could only ap-peal with leave of court after showing that it has an “interest in the matter”. The phrase “interest in the matter” has been the subject of judicial decisions in a number of cases both here and in England.

In Ex parte Sidebotham, In Re: Sidebotham (1880) 14 Ch.D 458 at 465 James, LJ declared as long ago as over a century:–

“It is said that any person aggrieved by any order of the Court is entitled to appeal. But the words ‘person aggrieved’ do not really mean a man who is disappointed of a benefit which he might have received if some other order had been made. A ‘person aggrieved’ must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully de-prived him of something, or wrongfully refused him something, or wrongfully affected his title to something.”

In Sun Insurance Office Ltd v Ojemuyiwa (1965) 4 NSCC 65; (1965) 1 ANLR 1 this Court applying section 117(6) of the Constitution of the Federation, 1963 (which is in pari materia with section 222(a) under review) following; Windsor v Chalcraft (1938) 2 All ER 751; (1939) 1 KB 279 accepted the insurers claim that they, being liable to pay under the judg-ment, had an interest in the matter which enabled them to ap-ply for leave to appeal and granted them leave. In lkonne v C.O.P. and Wachukwu (1986) 4 NWLR (Part 36) 473, 497 Aniagolu, JSC delivering the lead judgment of this Court ob-served, after citing section 222(a) of the Constitution:–

“The above provision is almost in identical terms with the provi-sions of section 117(6)(a) of the 1968 Constitution of the Federa-tion under which the cases of Sun Insurance Office Ltd v Victoria O. Ojemuyiwa (1965) 1 All NLR 1 and Jamakani Transport Ltd v


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Alhaji Kalla Motion by British India General Insurance Co Ltd (1965) 1 All NLR 77 were decided. In the former, the interest of the Insurance Company, which had the liability of paying dam-ages under the judgment was recognised as a sufficient legal inter-est to warrant the Insurance Company appealing against the judg-ment, while in the latter, the Insurance Company was not allowed to prosecute the appeal because it did not apply for leave to appeal under section 117(6)(a) but wanted to prosecute the appeal brought by Jamakani Transport Ltd, the Supreme Court holding that it would be contrary to the spirit of that provision of the Con-stitution to authorise a person to prosecute an appeal in the name of a party who did not wish to go on with the appeal.”

He then held at page 497:– “The interest envisaged under section 222(a) of the 1979 Consti-tution is a legally recognisable interest.”

Karibi-Whyte, JSC in his own judgment in the case ob-served at Page 503:–

“The expression ‘person having interest’ has been defined as syn-onymous with ‘person aggrieved,’ In Re: Sidebotham, ex-parte. Sidebotham (1880) 14 Ch. D. at P. 465, James, LJ said:–

‘A person aggrieved must be a man who has suffered a le-gal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of some-thing, or wrongfully refused him something or wrongfully affected his title to something’.

In Re: Reed, Bowen and Co ex-parte Official Receiver (1887) 19 Q.B.D. at page 178, Lord Esher pointed out that ‘a person aggrieved’ includes ‘a person who has a genuine grievance because an order has been made which prejudi-cially affects his interests’.

The respondent must therefore show not only that he is a person interested but also that the order made prejudicially affects his in-terests.”

Again, in Ede v Nwidenyi and others In re: Ogbuzuru Ugadu and another (1988) 5 NWLR (Part 93) 189, where this issue arose, Karibi-Whyte, JSC held at page 202:–

“Concisely stated the interest which will support an application under the provision must be a genuine and legally recognisable in-terest, in respect of a decision which prejudicially affects such in-terest. (See In re: Reed Bowen and Co Ex P. Official Receiver (1887) 19 Q.B.D. 174 at page 178 and Attorney-General for the Gambia v Njie (1961) 2 All ER 504.”


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(See also Dairo v Gbadamosi, In re Afolabi (1987) 4 NWLR (Part 63) 18 CA cited with approval by this Court in Re: Ugadu (supra)). And in Fawehinmi v N.B.A. and others (No. 2) (1989) 2 NWLR (Part 105) 558, Oputa, JSC reiterated:–

“There is also another expression which has to be properly under-stood and that is party aggrieved. Some statutes permit a person or a party aggrieved to appeal. Any person having an interest recog-nised by law in the subject-matter of a judgment which interest is injuriously affected by the judgment can appeal if he is a party or apply for leave to be heard on appeal not as a party properly so-called but rather as a person interested (See section 117(6)(a) of the 1963 Constitution and the case of Sun Insurance Office Ltd v Victoria Olayibo Ojemuyiwa (1965) N.M.L.R. 451.) This case highlighted the point that a party to the original suit either as plain-tiff or defendant appeals against the ensuing judgment as of right while a person interested cannot launch an appeal in the name of the party but must obtain leave to appeal as a person interested:–

See also sections 213(5) and 222(a) of the 1979 Constitution and the case of Christopher Ede v Ogenyi Nwidenyi and others In Re Ogbuzuru Ugadu (1988) 5 NWLR (Part 93) 189 at page 203 and at page 210.”

On the authorities, therefore, the expression “person having interest” is synonymous with “person aggrieved”. And a person aggrieved is a person who has suffered a legal griev-ance, a person against whom a decision has been given which has deprived him of something or refused him some-thing or affected his right or title to something; (See Akande v General Electric Co and others (1979) 3 L.R.N. 187.) His interest must be one that is legally recognisable such as in Sun Insurance Office Ltd v Ojemuyiwa (supra); Ubagu and others v Okachi and others (1964) NSCC 20; In re Ugadu (supra) and Dairo v Gbadamosi, In re Afolabi (supra).

I now turn to the facts of this case. Can it be said that the third respondent has such an interest in Suit No. M/664/89 the proceedings in the High Court of Lagos State (Adeniji, J) between the first respondent as plaintiff and the appellant and second respondent, as defendants as to clothe him with locus standi to appeal, with leave of court, against the


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judgment in the case? The Court below answered this ques-tion in the affirmative. But the appellant is of the contrary view. The reasoning of the Court below goes this way:–

“The applicant (that is, the third respondent) lays claim to the sum in Afekoro’s account for which he was required to enter into an indemnity in order to deprive Afekoro of access to his (Atekoro’s) account when an order is made which calls for the indemnity to be enforced the interest of the applicant is affected.” (Words in brackets are supplied by me.)

Learned Counsel for the appellant argued that whatever in-terest third respondent might have in first respondent’s ac-count with the appellant bank was not a legally recognisable interest in that the Police had no power or authority to order or direct or request the appellant to transfer money from a suspense account in the appellant bank to the third respon-dent’s account with another bank (IMB) and, in any event, the Police, having cleared the first respondent in exhibit LTA 7 of complicity in the allegation of fraud reported by the third respondent, the latter no longer has an interest in first respondent’s savings account, the subject matter of Suit No. M/664/89 the judgment in which third respondent sought to appeal against as a person having an interest in the matter.

I think learned Counsel is right. Following the third respon-dent’s report to the Police that he was defrauded of the sum of Seven Million Naira (N7m), the Police commenced inves-tigation and, in the process, froze the accounts of some per-sons (including the first respondent) in the appellant bank and had the balances on those accounts paid into a suspense account in the bank pending conclusion of their investiga-tions. At the close of their investigations, rather than charge to court the persons, if any, against whom any case was made out and leave it to the court to make an order as to the disposal of the amount in the suspense account, the Police wrote to the appellant bank “requesting” it to transfer the balance in the suspense account to the account of the third respondent in the International Merchant Bank (“IMB”). The appellant bank complied after it had obtained an indemnity from the third respondent. I have searched through the


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Police Act and the Criminal Procedure Act and the Criminal Procedure Law of Lagos State and I can find nothing in them to support the action of the Police. Nor has learned Counsel for the third respondent shown to us any authority to back up the Police action. The request for transfer is clearly illegal. And the amount so illegally transferred can-not, in my respectful view, constitute a legally recognisable interest of the third respondent in such amount. It is note-worthy to observe that there is nothing on the record before us to suggest that anyone has been prosecuted, let alone convicted, in respect of third respondent’s complaint. Nei-ther are we told that the third respondent in respect of its complaint has successfully sued anyone, including the first respondent. Wherein, then lies its legal interest in the amount of N2,727,655.60 illegally transferred into its ac-count with the IMB at the “request” of the Police.

In exhibit LTA7, the Police wrote to the appellant bank declaring that Afekoro (the first respondent):–

“. . . Was found not to have been involved in the said fraud after completion of Police investigation.”

This letter debunked the truthfulness of the counter-affidavit of Jacob Ademuyiwa, ASP. Had the Court below adverted its mind to this letter, it would not have found, as it did, that the third respondent has sufficient interest in the matter, that is Suit No. M/664/89 involving first respondent’s savings account with the appellant’s bank.

The conclusion reached is that the third respondent has no legally recognisable interest in the subject matter of Suit No. M/664/89 Afekoro v SGBN and another and cannot rightly be given leave to appeal in the matter pursuant to section 222(a) of the 1979 Constitution. I answer Question 1 in the negative. This conclusion is sufficient to enable me dispose of this appeal. There is no need to go into the other issues raised by the appeal.

For the reasons I give above, I allow this appeal, set aside the decision and orders of the Court below and dismiss third respondent’s application before it for leave to appeal. I award to the appellant N500 cost in the Court below and


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N10,000 cost in this Court to be paid by the third respon-dent. WALI JSC: I have had the privilege of reading in advance, a copy of the lead judgment of my learned brother Ogundare, JSC, with the reasoning and conclusion of which I entirely agree. I adopt them as mine.

For these same reasons in the lead judgment, I find that the third respondent has failed to establish by credible evidence that it has any legal interest in the matter or it is a person aggrieved. The simple fact that it had complained to the po-lice against the first respondent who was later cleared by the police that he was not involved in the fraud complained of by the third respondent, is not sufficient to give the third re-spondent a standing or locus standi in the matter against the first respondent. After the completion of the police investi-gation, there was nothing to show that the first respondent was prosecuted by the police or sued by any body. For a person to put the provision of section 222(a) of the 1979 Constitution in motion in his favour, it must be shown that he has a legal interest in the matter or that he is a person ag-grieved. (See Sun Insurance Co Ltd v Ojemuyiwa (1965) 1 ANLR 1 and Ede v Nwidenyi and others and In re-Ogbuzuru Ugadu and another (1988) 5 NWLR (Part 93) 189.)

I also therefore allow the appeal and adopt the consequen-tial orders made in the lead judgment including that of costs. MOHAMMED JSC: I agree with the opinion of my learned brother, Ogundare, JSC, in the judgment just read that this appeal has merit and ought to succeed. My learned brother has covered all the salient issues canvassed in this appeal and I have nothing more to add. The appeal is accordingly allowed. I abide by the orders made in the leading judgment on costs. ACHIKE JSC: I have had the opportunity of reading in draft the judgment of my learned brother, Ogundare, JSC I do not think I can usefully add anything, except to say that I agree with his judgment.



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EJIWUNMI JSC: I have the privilege of reading before now, the judgment just delivered by my learned brother Ogundare, JSC. In that judgment, the facts have been care-fully set down and the issues raised thereon have been duly considered leading to the success of the appeal. I also uphold the appeal for the reasons given in the said judgment. I will however comment further on two aspects of this appeal.

The first is whether the third respondent, having regard to the facts of the case is a person having an interest in the pro-ceedings within the contemplation of the provisions of sec-tion 222(a) of the Constitution of the Federal Republic of Nigeria, 1979 and therefore entitled to be granted leave to appeal. Section 222(a) of the 1979 Constitution provides:–

“Any right of appeal to the Federal Court of Appeal from the deci-sions of a High Court conferred by this Constitution:–

(a) shall be exercisable in the case of civil proceedings at the instance of a party thereto, or with the leave of the High Court or the Federal Court of Appeal at the instance of any other person having an interest in the matter . . .”

It is manifest from a careful reading of section 222(a) of the 1979 Constitution that under that section, either party to the action in the High Court has a right of appeal to the Court of Appeal. But where a party described as an “interested party” wishes to appeal against the decision of the High Court that party is obliged to obtain the leave of the High Court or the Court of Appeal, prior to the hearing of the appeal. But such leave can only be granted to that “interested party”, if he could show his interest in the decision for which he is seek-ing leave to appeal. It is therefore clear in my respectful view, that a busy body, or a meddler in the affairs of others is not likely to be granted such leave. In other words, a per-son who wishes to appeal in such circumstances must show that he was aggrieved by the decision, in the sense that he had suffered a legal grievance. He must show that the deci-sion wrongfully deprived him of something or wrongfully refused him something. It must also be shown that the deci-sion is likely to affect or aggrieve the person seeking for such leave to appeal to the Court of Appeal. (See in ex parte Sidebotham; In re Sidebotham (1880) 14 Ch. D 458 at 465;


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Sun Insurance Office Ltd v Ojemuyiwa (1965) 4 NSCC 65, (1965) 1 ANLR 1 and Ikonne v C.O.P. and Wachukwu (1986) 4 NWLR (Part 36) 473, 497.)

Upon the question raised in this appeal as to whether the Court below was right to have held that the third respondent had an interest of the kind that is envisaged in section 222(a) of the 1979 Constitution, it is the contention of learned Counsel for the appellant that the third respondent had no such interest. His argument simply put is that what-ever interest third respondent might have in first respon-dent’s account with the appellant’s Bank was not a legally recognisable interest in that the Police had no power or au-thority to order or direct or request the appellant to transfer money from a suspense account in the appellant Bank to the third respondent’s account with another Bank (IMB) and, in any event, having cleared the first respondent of complicity in the allegation of fraud reported by the second respondent, the latter no longer had any interest in first respondent’s saving account, the subject matter of suit M/664/89 the judgment in which third respondent sought to appeal against as “a person having an interest in the matter”.

There can be no doubt that having regard to the authorities referred to above, the submission of learned Counsel for the appellant is right. It must therefore follow that his appeal must be upheld.

My second comment is concerned with the conduct of the officers of the second respondent in this matter. From what can be gathered from the records of this appeal, it became obvious that a gigantic fraud had been committed, with and among the principal parties in this matter. Yet rather than pursue the investigation and the criminal prosecution of those concerned, the police were busy acting illegally to re-cover the proceeds for the person they perceived as the complainant. I say no more. But it is imperative for the po-lice authorities to investigate, for the discovery of offenders of the system and not be pursuers of money perceived stolen only.


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As I have said above, this appeal is upheld for the reasons given above and the fuller reasons given in leading judg-ment. I also abide with the order made as to costs. Appeal allowed.



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United Bank for Africa Plc v Ekene Dili Chukwu (Nigeria) Ltd and others

COURT OF APPEAL, ENUGU DIVISION UBAEZONU, GALADIMA, FABIYI JJCA Date of Judgment: 8 JULY, 1999 Suit No.: CA/E/176/97

Banking – Bank draft crossed “Not negotiable, account payee only” – Duty on a Banker thereof – Liability of the Bank Banking – Bearer’s Cheque – Purport of section 7(3) Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 Facts The plaintiff/respondent’s claim against the defen-dant/appellant was for the sum of N360,000 being the amount which the plaintiff paid per Orient Bank of Nigeria Limited Onitsha Branch Draft No. 003512 of 24 April, 1989 in favour of the 3rd, third party (Panel on Recovery of Pub-lic Funds and Property, Anambra State Government) which the defendant/appellant paid to first – third party (Manuel Bradley Ltd) and the third party. The plaintiff/respondent claimed that this money was negligently paid and he there-fore claimed this sum as damages and interest thereon at the rate of 30% until the said amount was paid.

At the conclusion of trial, judgment was entered in favour of plaintiff/respondent for the sum of N360,000 as damages and interest of 5% per annum on the judgment sum.

Dissatisfied with the judgment, appellant appealed to the Court of Appeal on grounds, inter alia, that the plain-tiff/respondent action could not be found on negligence in the absence of the 3 (three) elements of negligence. Held – 1. The security intended of a draft on the face of which is

crossed “Not Negotiable, Account Payee only”, is to en-sure that the proceeds of that particular draft are lodged


United Bank for Africa Plc v. Ekene Dili Chukwu (Nigeria) Ltd 653

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only in the account endorsed on the draft and of third party to ensure that even if the transaction failed to go through, the first respondent could recover their draft since it was crossed “Not Negotiable, Account Payee only”.

2. Failure or refusal of the appellant to obtain the necessary authority from the State Accountant General and the Commissioner for Finance before parting with the N360,000, the proceeds of the draft and also failure on the part of the appellant to make diligent enquiries from the first respondent and/or from the third party as to the genuineness of the cheque before collecting the proceeds as it is the universal practice, showed that the appellant has acted negligently and in bad faith.

3. It is incontrovertible and the learned Trial Judge has cor-rectly held that the crossing “Not Negotiable – Account Payee Only” on the draft was addressed to the collecting Banker and in effect warns the collecting Banker that if it collects the cheque for someone other than the payee and that person is not entitled to it, the Banker may be liable in damages to the person entitled to it.

4. A Banker to whom a cheque or a draft is handed over to under this circumstances ought to be put upon inquiry, and he will be liable if he acts negligently and credits a customer with the proceeds of the cheque without having made such inquiry. In the case on hand, the appellant ought to have been put on enquiry. It cannot claim pro-tection of the statute and should not be absolved of the resulting liability; having not deserved it.

5. Section 7(3) of the Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 provides where the payee is a fictitious or non-existing person, the bill may be treated as payable to the bearer. The term “fictitious or non-existing person” has been defined in Bank of England v Vagliano Bros. (1891) A.C. 107. It was held that “a fictitious person” means a person who has never existed. “A non-existing person” means one who did



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exist but no longer exist. The payee in the instant case in exhibit A is a legal existing person.

Appeal dismissed.


Nigerian A.C.B. Ltd v Attorney-General Northern Nigeria (1967) All NLR 76 Abimbola v Bank of America Ltd (1968) 2 C.C.H.C.J. 547 Attribs v UBA Ltd (1968) 1 A.L.R. Comm. 56 Balogun v N.B.N. (1978) 3 SC 155 N.B.N. Ltd v Mobil Oil (Nigeria) Ltd (1994) 2 NWLR (Part 328) 534

Foreign Anns v Metron London Borough Council (1978) A.C. 728 Bank of England v Vagliano Bros. (1891) A.C. 107 Donoghue v Stevenson (1932) A.C. 562 Fine Art Society v Union Bank of London (1886–87) 17 Q.B. 705 Gordon v London City and Midland Bank Ltd (1902) 1 KB 242 Ladbroke v Todd (1914) 111 LT. 43 Lloyds Bank Ltd v Savory and Co (1933) A.C. 201 Lochgelly Iron and Cool Company Ltd v M’Mulian (1934) A.C. 1 Marfani and Co Ltd v Midland Ltd (1968) 2 All ER 573 Thackwell v Barclays Bank Plc (1986) All ER 676

Nigerian statutes referred to in the judgment Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990, sections 7(3), 77(2), 82



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Contract Law Cap 30 Laws of Anambra State, 1986, section 738 Torts Law Cap 135 Laws of Anambra State, 1986, sections 217, 218, 219, 224, 225

Books referred to in the judgment Paget’s Law of Banking (19ed) The Law and Practice of Banking by J. Milnes Volume 1, (4ed)

Counsel For the appellant: Dr A.J.C. Mogbana For the first respondent: S. Izu Nwankwo For the third – third Party: A.U. Nwadi

Judgment GALADIMA JCA: (Delivering the lead judgment) This is an appeal by the defendant/appellant against the decision of Uyanna, CJ, sitting in the Awka Judicial Division of Anam-bra State High Court contained in his judgment of the 6 Oc-tober, 1994. The plaintiff/respondent’s claim against the de-fendant/appellant is for the sum of N360,000 being the amount which the plaintiff paid per Orient Bank of Nigeria Limited, Onitsha Branch Draft No. 003512 of 24 April, 1989 in favour of the third – third party (Panel on Recovery of Public Funds and Property, Anambra State Government) which the defendant/applicant paid to first – third party (Manuel Bradley Limited) and the third – third party. The plaintiff/respondent claimed that this money was negligently paid and he therefore claimed this sum as damages and in-terest thereon at the rate of 30% until the said amount was paid.

It was by leave of the Court below that Manuel Bradley Ltd, Emmanuel Chigbo Nwogbo and Panel on Recovery of Public Funds and Property Anambra State Government were joined as first, second and third parties respectively.


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The plaintiff/respondent, the defendant/appellant and the third – third party/respondent exchanged pleadings. Although all the third parties were served only the third – third party/respondent entered appearance and defended the claim of the defendant/appellant against them for indemnity and other claims. During the trial the Court below reviewed the pleadings of parties, evidence of the witnesses and the sub-missions of Counsel. At the conclusion of all the available evidence and the submissions of Counsel the learned trial Judge in a considered judgment held that the third – third party never authorised the second – third party to act for them as auctioneer to dispose of the vehicles in question nor had the third – third party any such vehicles to sell. He then found that the defendant/appellant were negligent as averred by the plaintiff/respondent and the third – third party/respondent in their respective pleadings as well as proved in evidence. Judgment was therefore given for the plaintiff/respondent for the sum of N360,000 as claimed, and interest of 5% per an-num on the judgment sum. The third – third party was also found not liable to indemnify the defendant/appellant.

Dissatisfied with this judgment, the defendant/appellant (who will hereinafter be simply referred to as the “appel-lant”) now appealed to this Court and had filed seven grounds of Appeal. The grounds without their particulars are as follows:– 1. Error of Law The learned trial Judge erred in law in holding that the re-

spondent had a cause of action in negligence at page 8 of the judgment as follows “I am satisfied in coming to the conclusion without difficulty that the defendants did not make the necessary enquiries or take the anticipated pre-cautions as a prudent Banker in opening the account in the joint names. The case against the defendants is strength-ened by their paying the proceeds of the draft contrary to the expressed endorsement on the draft in conformity with the accepted banking practices. In this, they were negli-gent.”

2. Error of Law The learned trial Judge erred in law in failing to uphold the

contention of the appellant bank that negligence on its part


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in opening account for its customers or in collecting a cheque for a customer could not by virtue of section 77 or 82 of the Bills of Exchange Act (Cap 35) Laws of the Fed-eration of Nigeria, 1990, give rise to an action in negligence against the bank but would merely disentitle it to the protec-tion of the said section.

3. Error of Law The learned trial Judge erred in law in failing to consider

the appellant’s contention that even if the respondent had any legal claim against the appellant, it should equally not succeed, in view of the defence of ex turpi causa non oritur actio available to the appellant.

4. Error of Law The learned trial Judge erred in law in failing to find that

Orient Bank draft, the subject matter of the action, was a bill made in favour of a fictitious payee and that by virtue of the provisions of section 7(3) of the Bills of Exchange Act (Cap 35) Laws of the Federation of Nigeria, 1990, was in the circumstances of this case properly treated by the ap-pellant as payable to the bearer.

5. Error of Law The learned trial Judge erred in law in failing to hold that

the appellant is entitled to protection of section 77(2)(e) of the Bills of Exchange Act.

6. The judgment of the learned trial Judge was given in a hurry and was not a considered decision, in view of his dic-tum at page 7 of the judgment as follows:–

“I have taken pains within the short compass of time at my disposal to review the pleadings of the parties, the evidence of the witnesses and the submissions of Counsel.”

The major submissions of and the authorities cited by the appellants Counsel were neither mentioned nor considered in the judgment.

7. The judgment is unreasonable, unjust and against the weight of evidence. The appellant formulated four issues for determination as follows:–

i. Whether in the circumstances of this case the learned trial Chief Judge was correct in holding that the plain-tiff was entitled to succeed against the defendant in an action for negligence;

ii. Whether the plaintiffs claim against the defendant should not be defeated by the defence of ex turpi causa non oritur action;


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iii. Whether the learned trial Chief Judge was correct in holding that the defendant was negligent in collecting the proceeds of the Orient Bank draft, which by virtue of the provisions of section 7(3) of the Bill of Ex-change Act, was payable to bearer, and in paying the same into the joint account or in favour of the first third party; and

iv. Whether the learned trial Chief Judge was right in fail-ing to consider and uphold that the defendant is enti-tled to the protection of section 77(2) of the Bill of Exchange Act against the claim of the plaintiff in the absence of proof that the documents relied upon by the defendant in opening the joint account of the first and third – third parties were forged.”

The first respondent formulated two issues for determina-tion as follows:– “(i) Whether in the circumstances of this case the learned trial

Chief Judge was correct in holding that the defendant was negligent as the plaintiff averred in its pleadings and proved in evidence by not making the necessary enquiries or take the anticipated precaution as a prudent banker in opening the account in the joint names of Manuel Bradley Limited/Panel on Recovery of Public Funds and Property, Anambra State Government and paying the proceeds of the draft (exhibit A) contrary to the expressed endorsement on the draft in conformity with the accepted banking practices.

(ii) Whether the learned trial Chief Judge was correct in hold-ing that the endorsement on the draft (exhibit A) crossed; ‘Not Negotiable, Account Payee only’ was a warning to the collecting Banker that if he collects the cheque for someone other than the payee and that person is not entitled to it, the Banker may be liable in damages to the person who was entitled to it and hence found the defendant liable in dam-ages to the plaintiff for the value of the draft.”

The third – third party/respondent adopts four issues raised for determination by the appellant’s brief of argument, and the four issues were argued together.

During the hearing of this Appeal learned Counsel for the appellant, Dr A.J.C. Mogbana adopted the appellant’s Brief of Argument dated 18 November, 1997 and filed 21 Novem-ber, 1997. So also did S. Izu Nwankwo, first respondent’s Counsel and A.U. Nwadi third – third party’s Counsel.


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Before I proceed to deal with the issues raised for determi-nation, it is necessary to deal with observations made by the first respondent regarding Grounds 6 and 7 of Appeal. It is observed that since the appellant neither raised any issue nor advanced any argument in respect of ground 6 that ground must be taken to have been abandoned and should be struck out. This ground complains that the judgment of the learned trial Judge having been given in a hurry was therefore not a considered decision since the major submissions of the au-thorities cited by the appellant’s Counsel were neither men-tioned nor considered in the judgment. It is well settled by a long line of cases that where a ground of appeal is not cov-ered by any issue formulated in a party’s brief of argument, particularly the appellant’s that ground must be taken as abandoned. It is the issues that are argued and not the ground of Appeal. No issue is raised and no argument is ad-vanced in respect of this ground. It is therefore taken as abandoned and accordingly struck out. (See Abba Tukur v Government of Taraba State and 2 others (1997) 6 NWLR (Part 510) 549–570.)

Similarly Ground 7 beside being incompetent for being generally and wrongly framed was abandoned by the appel-lant. It ought to be struck out as well.

As things stand, having struck out Grounds 6 and 7 there are now only five grounds of appeal upon which the four is-sues formulated by the appellant for determination are predicated. In other words these five grounds of appeal are adequately covered by the four issues for resolution. It is my further considered opinion that Issues No. 1 and 2 can be conveniently argued together while Issues No. 3 and 4 can also be argued together. Hence, I appreciate why the first respondent has decided to formulate only two issues for de-termination while the third – third party having adopted ap-pellant’s four issues for determination then canvassed and argued the four issues together. As I have pointed out ear-lier, neither the first third party nor the second – third party entered appearance or in any manner contested the claim by the appellant.


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Question that arose in Issue No. 1 is whether in the cir-cumstances of this case the learned trial Chief Judge was correct in holding that the plaintiff/respondent was entitled to succeed against the defendant/appellant in action for neg-ligence, whereas the appellant’s contention in Issue No. 2 is that the defence of ex turpi causa non oritur actio is avail-able to the appellant against the first respondent. Chief Dr A.J.C. Mogbana submitted that having regard to the facts of the case the plaintiff/respondent cannot successfully found its action in negligence. It is contended that the action is to-tally misconceived and must fail for non co-existence of three elements in an action for the tort of negligence. Learned Counsel enumerated these three elements firstly, the existence of duty to take care, which is owed by the de-fendant to the plaintiff; secondly, the failure to attain that standard of care prescribed by the law, thereby committing a breach of such duty; and thirdly, damage, which is both casually connected with such breach and recognised by the law has been occasioned so the plaintiff. Learned Counsel for the appellant focused his submission on the following cases Donoghue v Stevenson (1932) A.C. 562; Lochgelly Iron and Cool Company Limited v Mulian (1934) A.C. 1 HL at P. 25 and Anns and others v Merton London Borough Council (1978) A.C. 728 at 751–752.

It is contended that the plaintiff/respondent failed to prove at the trial that the appellant either owed a duty of care to the plaintiff in respect of Orient Bank draft, exhibit A or committed a breach of duty. It is further contended by the learned Counsel that since the evidence before the trial Court is that the plaintiff is not the payee, the drawer or drawee of exhibit A, and the joint account with the appellant bank into which exhibit A was paid was not opened by or in the name of the plaintiff, then in the circumstances, the plaintiff action framed in negligence, should fail. He cited African Continental Bank Ltd v Attorney-General of North-ern Nigeria (1967) ANLR 76 at 1; wherein the Supreme Court drew a clear distinction between negligence as a cause of action and negligence in respect of the defence un-der section 82 of the Bills of Exchange Act (Cap 35) Laws


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of the Federation of Nigeria, 1990. It is submitted that the view of the learned trial Chief Judge that failure by the ap-pellant to make necessary enquiries before opening the joint account was enough to found an action in negligence is to-tally erroneous since such negligence is relevant only for the purposes of sections 77 and 82 of the Bills of Exchange Act. The following were cited Lloyds Bank Ltd v Savory and Co (1933) A.C. 201; United Nigeria Insurance Co Ltd v Muslim Bank (West Africa) Ltd (1972) 1 ANLR (Part 1) 314 and Marfani and Co Ltd v Midland Ltd (1968) 2 All ER 573. Learned Counsel concluded his submission that the action is not in negligence. In respect of Issue No. 2 which is argued together with Issue No. 1 it is contended by appellant’s learned Counsel that the defence of ex turpi causa non oritur actio is available to the appellant against the plaintiff, espe-cially in the circumstances of the present case, since PW2 testified under cross-examination that no auction sale was conducted by the second – second party but the plaintiff ne-gotiated with the second – third party to purchase the vehi-cles by private treaty. It is submitted that the natural infer-ence from the plaintiffs conduct in entering into private treaty with second – third party is that the plaintiff intended to corner the business and to make a deal under the table for its own advantage; the result of which is that the transaction between the plaintiff and the second – third party was tainted with illegality and immorality. It is therefore con-tended that the plaintiff has no right to recover any money paid by it as a result of that transaction. The following au-thorities are relied upon (see Thackwell v Barclays Bank Plc (1986) 1 All ER 676 and The Law and Practice of Banking Volume 1 (4ed) pages 222–3 by J. Milnes). Also referred to is section 738 of the Contract Law (Cap 30) Laws of Anam-bra State, 1986 which provides that an auctioneer has no im-plied authority to sell by private treaty.

On Issue No. 3 the appellant contended that by virtue of the provisions of section 7(3) of the Bills of Exchange Act (Cap 35) Laws of the Federation of Nigeria, 1990, the Orient Bank draft, exhibit A, is a bearer cheque and that it was properly paid into the aforesaid account. Reference was


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made to Paget’s Laws of Banking (19ed) and the case of Bank of England v Vagliano Bros. (1891) A.C. 108, where the term “fictitious or non-existing person” as provided in section 7(3) of the Bills of Exchange Act, was defined. It is submitted by the learned Counsel for the appellant that since the third – third party offered no consideration for the Draft exhibit A, which fact was unknown to the plaintiff at the time of parting possession with it the third – third party has no right to the draft; and the plaintiff did not mean that the third – third party should take the benefit of the draft. It is further submitted that since the draft was drawn in favour of the third – third party by the fraudulent act of the second third party, the payee on exhibit A is a fictitious or imagi-nary person which falls squarely within Paget’s proposition for determining who is a fictitious or non-existing person.

It is further contended that being a bearer cheque, exhibit A, was lawfully negotiated by mere delivery from Orient Bank, Onitsha to the plaintiff, to the second and first – third parties and finally to the appellant, all crossings notwith-standing.

In respect of Issue No. 4 it was contended that the appellant is entitled to the protection of section 77(2) of the Bills of Exchange Act because it acted in good faith and without neg-ligence since it took detailed and reasonable steps in opening joint account having regard to exhibits E– S. It is finally sub-mitted that no evidence was led to prove that any of these documents was not genuine or was forged, particularly exhib-its H and J which were ostensibly issued by the Chairman of the third – third party. That being so, the learned Counsel contended, the appellant does not come within the decision in United Nigeria Insurance Co Ltd v Muslim Bank (supra) as being negligent in opening an account.

Two issues were formulated on behalf of the first respon-dent by its Counsel as reproduced above. On Issue No. 1 – Whether the defendant acted negligently in the circum-stances of this case, it was submitted by S. Izu Nwankwo of Counsel for first respondent, that the defendant/appellant acted negligently and therefore the learned trial Chief Judge


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was correct to have so held. Ten reasons were proferred based essentially on the failure by the defendant/appellant as a Banker to take prudent and cautious steps, as banking practice requires, in opening an account for a Government body like the third – third party/respondent. Referring to sections 217, 218, 219, 223, 224 and 225 of the Torts Law (Cap 135) Laws of Anambra State of Nigeria, 1986, learned Counsel submitted that the appellant having held himself out as possessing special banking skill and profession he should have maintained some degree of care which every prudent Banker is expected to do in the circumstances.

On Issue No. 4, as formulated by the appellant, learned Counsel for the first respondent submitted that all the essen-tial elements of the tort of negligence pleaded were proved by the first respondent. Hence the learned trial Chief Judge rightly held that the defendant was negligent. It was con-tended that the draft was purchased by the first respondent with endorsement that it be paid into the account of the third – third party/respondent only as a payee beneficiary of the value of the draft. It is submitted that since the appellant acted in a manner which caused the first respondent to lose the money by paying the proceeds to a stranger contrary to the endorsement on the draft, the appellant had breached that duty of care which also caused damage to the first respon-dent. Learned Counsel refers to and relies on these cases (see Donoghue v Stevenson (1931) A.C. 562; Anns v Merton Lon-don Borough Council (1978) A.C. 728 and A.C.B. Ltd v At-torney-General of Northern Nigeria (1967) 1 ANLR 76).

On the Issue No. 2, it is submitted that the learned trial Chief Judge was correct and justified in holding that the crossing “Not Negotiable – Account Payee Only” on the draft was addressed to the collecting Banker and in effect warns the collecting Banker that if it collects the cheque for someone other than the payee and that person is not entitled to it, the banker may be liable in damages to the person enti-tled to it. He cited and relied on the statement of J. Milnes Holden The Law and Practice of Banking Volume 1 (4ed) pages 139–140 on the significance of crossing on a draft. He


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also relied on United Nigeria Insurance Co Ltd v Muslim Bank (1972) 4 SC. 69 at 77–78 and Balogun v N.B.N. (1978) 3 SC. 155 at 163–164.

Learned Counsel for the third – third party/respondent ar-gued appellant’s issues together. It is the contention of the third – third party/respondent that the appellant as a Banker acted negligently and in bad faith in collecting from the plaintiff/respondent a draft of N360,000 crossed “Not Nego-tiable – Account Payee only”, in favour of the third – third party/respondent – a State Government Body. It is submit-ted that in view of its illegal or immoral dealing with the first and second – third parties without reference to the third – Third Party and his referees, the appellant can neither rely on the protection of section 77(3) of the Bills of Exchange Act nor on the defence of “ex turpi causa non oritur actio”. He cited and relied on the cases of Ladbroke v Todd (1914) 111 L.T. 143; Attribs v UBA Ltd (1968) 1 A.L.R. Comm. 56; Bola Abimbola v Bank of America Ltd (1977) 4 C.C.H.C.J. 547 and United Nigerian Insurance Co v Muslim Bank (1972) 4 SC. 69 at 77.

It is argued that this Appeal be dismissed because it lacks merit.

On a careful perusal of the appellant’s brief of argument where he enumerated 4 issues for determination, it is ob-served from the facts of this case that not as many as four issues are required for determination of this appeal by this Court. When issues are proliferated for determination on the basis of a few grounds of appeal, this no doubt, defeats the object of brief writing. Numerous cases are replete in our law reports that a single issue can be formulated to encom-pass one or more grounds. Hence in this appeal the first re-spondent formulated only two issues for determination, while the third – third party/respondent considered it con-venient to argue the appellant’s four issues together. Hence the two issues formulated by the first respondent will be adequate enough to deal with this Appeal. The first respon-dent’s Issue No. 1 which is covered by the appellant’s first and second issue is whether the defendant/appellant acted


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negligently in the circumstances of this case. The crux of the plaintiff/1st respondent claim is that since the draft in ques-tion was crossed and endorsed “Not Negotiable – Account Payee only”, the defendant/appellant was negligent in col-lecting the proceeds of the said draft, opening an account in the name of the first – third party, and paying the proceeds into the said account instead of into payee’s account as ex-pressly marked on the face of the draft. The plain-tiff/respondent also alleged that the defendant was negligent in allowing the second – third party to operate the account alone and to withdraw the entire amount in the account. The defendant/appellant’s defence is that the plaintiff/respondent could not maintain an action in negligence against the appel-lant having regard to the fact of the case and that the defen-dant was in no way negligent either in opening the said ac-count. Although it would appear that no evidence was led by the third – third party to prove that the documents exhibits D–S, were not genuine, however, it was admitted in evi-dence by the defendant/appellant that the third – third party was not contacted by the appellant before opening the joint account and that the Accountant-General did not authorise the opening of the said account, as required by the Financial Instructions where the government is an account-holder. The appellant also claimed protection of section 77(3) of the Bills of Exchange Act and relied on the defence of ex turpi causa non oritur actio against the plaintiff/respondent. The first and second – third parties did not participate in the pro-ceedings, even though they were duly served with necessary court processes. The third – third party on its own part filed a statement of defence, to the appellant’s statement of claim against the third parties whereby it denied liability to indem-nify the appellant’ against the plaintiffs/respondent’s claim. The learned trial Chief Judge held that the crossing “Not Negotiable – Account Payee only” on the draft the subject matter of the case is addressed to the collecting banker and in effect warns the collecting banker that if it collects the cheque for someone other than the payee and that person is not entitled to it the banker may be liable in damages to the person entitled to it.


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The learned trial Chief Judge also found that the defendant was negligent because it did not make necessary enquiries or take anticipated precaution as a prudent banker in open-ing the account in the joint names and paying the proceeds of the draft contrary to the express endorsement on the draft and in violation of accepted banking practice. Accordingly, the learned trial Chief Judge gave judgment for the plain-tiff/respondent for the sum of N360,000 as claimed. It was held that the second – third parties are liable to indemnify the appellant to the sum of N360,000 and the costs due from the appellant to the first respondent and the costs to the ap-pellant in the application for third parties proceedings.

How the defendant/appellant acted negligently can be de-duced from the circumstances of this case. The learned trial Judge found as at pages 97–98 of the Record of Appeal:–

“I have no doubt that at one time the second third party had acted as an auctioneer for the third, third party. However, I am of the firm belief as I am convinced by the evidence that the panel, the third, third party never authorised the second – third party to act for them as an auctioneer to dispose of the vehicles in question in this case. I was satisfied that the third, third party had no such ve-hicles to sell and never authorised the second – third party to sell them.”

The respondent/appellant as collecting banker opened an account for this “unauthorised” second – third party in the appellant’s bank at Awka in the strange joint name of the first and third – third parties and paid the sum of N360,000 into the strange account instead of into payee’s account as expressly marked on the face of the draft – exhibit A, which clearly bore the endorsement “Crossed Not Negotiable, Ac-count Payee Only”. It is shown that no reference was made to the Orient Bank of Nigeria Limited, Onitsha Branch that issued the draft. The appellant allowed the second – third party to personally operate the said account and he with-drew the whole amount.

The security intended of a draft on the face of which is crossed “Not Negotiable, Account Payee Only”, is to ensure that the proceeds of that particular draft are lodged only in the account endorsed on the draft and also made it


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non-transferable. Usually reference will be made to the Bank which issued it if there is any problem arising from the draft. The draft was made in the name of the third – third party to ensure that even if the transaction failed to go through the first respondent could recover their draft since it was crossed: “Not Negotiable, Account Payee Only”. The fact that the second – third party collected the draft after the pur-ported sale of vehicles which never was or delivered, no doubt, also put the appellant on prudent path of enquiry in opening the account in the name of joint names of the first and third – third parties. The draft was specially crossed in favour of the third – third party – an Anambra State Gov-ernment body. Failure or refusal of the appellant to obtain the necessary authority from the State Accountant – General and the Commissioner for Finance before parting with the N360,000, the proceeds of the draft and also failure on the part of the appellant to make diligent enquiries from the first respondent and or from the third – third party as to the genu-ineness of the cheque before collecting the proceeds as it is the universal practice, shows that the appellant has acted negligently and in bad faith. (See Ladbroke v Todd (1914) 111 LT. 143.) The liability here is in tort of negligence and the duty placed on the bank in the ordinary course of the discharge of its duties in conformity with its ordinary course of business and banking practice. As the banking practice basically requires, two referees, at least for each party is re-quired. DW1 admitted in evidence that there was no refer-ence to the third – third party in the fake joint account which, as it were, was stage-managed by the appellant.

I do not think that the appellant acted normally and in the ordinary course of its business and banking practice. The appellant outlined the necessary steps and precautions to be taken in order to open an account for the Government insti-tution like the third – third party/respondent but the appel-lant completely failed to take as a prudent bank. In lines 21–25 of page 69 of the Record of Appeal, the appellant held himself out as possessing special banking skill. Section 224


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of the Torts Law (Cap 135) Laws of Anambra State of Ni-geria, 1986, provides:– “224. Where a person possesses special skill or holds himself

out as possessing such skill, it shall be his duty to exer-cise such care as a normal skillful member of his trade or profession is reasonably expected to exercise.”

Where such a skillful person is alleged to have been negli-gent in so exercising such care, his performance shall be judged in the light of the normal standard reasonably ex-pected of an ordinary person with requisite skill in a similar profession or business. Hence the Latin maxim imperitia culpas ad numeratu.

The appellant paid the proceeds of the draft contrary to the expressed endorsement on the draft. The essentials of tort of negligence are provided in section 217 of Anambra Torts Law. Section 218 provides for duty of care breach of which section 219 provides liability for damages. (See Donoghue v Stevenson (1931) (supra) and Anns v Merton London Bor-ough Council (1978) (supra).)

It is controvertible and the learned trial Judge has correctly held that the crossing “Not Negotiable – Account Payee Only” on the draft was addressed to the collecting banker and in effect warns the collecting banker that if it collects the cheque for someone other than the payee and that person is not entitled to it, the banker may be liable in damages to the person entitled to it. (See Gordon v London City and Midland Bank Ltd (1902) 1 KB 242 and Fine Art Society v Union Bank of London (1886–87) 17 Q.B. 705.)

All the essential elements of the tort of negligence as pleaded have been proved by the plaintiff/first respondent. The learned trial Judge was right to have held that the appel-lant was negligent. The plaintiff is entitled to the return of the draft for purchase and refund of the money paid for ini-tial purchase of the draft. In dealing with the draft the appel-lant owes it as a duty to protect the interest of the purchaser of the draft the plaintiff/respondent because he stands to benefit when the payee receives the payment. The payee on the other hand is entitled to the value of the draft and they


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are expected to offer consideration in return for the value of the draft. If the consideration which the appellant expected to proceed from the third – third party/respondent failed as it happened, the plaintiff/respondent was clearly entitled to the return of the draft for purchase and refund of the money paid for the initial purchase of the draft. The principle of law enunciated by Supreme Court in A.C.B. v Attorney-General Northern Nigeria (1967) (supra) per Brett, JSC does not fa-vour appellant’s contention because the plaintiff did not bring the action on the basis of negligence for the purpose of section 82 of the Bills of Exchange Act 1990. In A.C.B.’s case one striking difference is that the plaintiff brought the action for negligence as a separate ground of action but the Lower Court treated the action as one in conversion and based on section 82 of the Bills of Exchange Act, which was in pari materia with the English Bills of Exchange Act of 1882. Also the appellant did not prove negligence on the part of the defendant in A.C.B.’s case in that the cheques in issue were drawn in favour of A.C.B. for the benefit of an existing account, though in a fictitious name. In the instant case, the draft was not drawn in favour of the appellant. He cannot therefore be protected by section 82 of the Bills of Exchange Act Cap 35 Laws of the Federation, 1990 which provides for cheques specially or generally crossed to a banker.

Since Issue 2 formulated by the appellant raised the defence of ex turpi causa non oritur actio and it is being considered with Issue 1, this point ought to be resolved together. The maxim under which the appellant has sought defence, applies to an action in contract based or tainted with illegality. appellant has contended that PW2’s testi-mony is that second – third party told the plain-tiff/respondent that he had the authority of third – third party to sell a number of vehicles by auction and no such auction sale was conducted by the second – third party which was negotiated on the basis of private treaty; that the transaction between plaintiff/respondent’s and the second – third party was tainted with illegality and immorality. It is therefore


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contended that the plaintiff has no right to recover any money paid by it as a result of that transaction. The appel-lant made reference to page 61 lines 3–9 of the Records where the plaintiff’s conduct could be inferred that he in-tended to negotiate with second – third party to purchase the vehicles by private treaty. The plaintiff’s cross-examination relevant to this issue begins from line 34 (bottom) of page 60:–

“I said that the second – third party in my presence and that of the PW1 told us that the panel on Recovery of Public Funds and Prop-erty handed him some vehicles to sell for it by public auction. He said he came to know if we are interested in knowing (sic) any. No auction was conducted. What I told the Court was not something done by secret deal.” (Italics for emphasis.)

I do not see how the appellant has inferred that this contrac-tual transaction from this passage between the plaintiff and the second – third party is by private treaty. The appellant cannot rely on this maxim to dodge liability.

The defence of “ex turpi causa non oritur actio” is not to be raised casually. Where it is raised and relied on, the Court has to look at the quality of the illegality relied on and the proximity of the illegal conduct to the claim maintained by the plaintiff. It is then the Court can determine whether there has been illegality of which it can take notice and whether by affording the plaintiff the relief sought, it would, in all the circumstances, be contrary to public policy. (See Thackwell v Barclays Bank Plc (1986) 1 All ER 676.)

It is in the light of these circumstances I resolve Issues 1 and 2 in favour of the plaintiff/first respondent. The appel-lant has failed to maintain the degree of care which a pru-dent banker will be expected to maintain.

The appellant has argued in support of his Issue No. 3 to the effect that by the provisions of section 7(3) of the Bills of Exchange Act, the draft in issue is a bearer cheque having been drawn in favour of a fictitious person and was there-fore properly paid into the joint account. This argument to my mind has no basis. It is not in doubt that the third – third party is a legal person. This is agreed by the parties. On


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page 53 lines 21–25, the appellant admitted in no mistaken term that the third – third party is a legal person. The appel-lant cannot now turn round to argue that the third – third party is a fictitious person so as to justify his wrongful con-duct.

Section 7(3) of the Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 provides:–

“Where the payee is a fictitious or non-existing person the bill may be treated as payable to the bearer.”

The term “fictitious or non-existing person” has been de-fined in Bank of England v Vagliano Bros (1891) A.C. 107. It was held that “a fictitious person” means a person who has never existed. “A non-existing person” means one who did exist but no longer exists. The payee in the instant case, in exhibit A is a legal existing person.

The appellant recognised and accepted this fact as such and purportedly opened a joint account in its name. The pre-sent case does not fall squarely with Paget’s proposition no. 2. 1. The proposition is:– “If, by fraud of a third party a man is induced to draw a bill

or cheque in which the name inserted as the payee’s is that of an imaginary person (although people of that name may exist), such payee is a non-existing person, although the drawer contemplated someone of that name receiving the money by himself or a transferee by endorsement.”

The circumstances of this case do not admit of the appellant as a bearer or a holder in due course. The appellant is there-fore not discharged of its negligence. Section 77 provides:– “(2) Where a banker, in good faith and without negligence (a) receives payment for a customer of a prescribed in-

strument to which the customer has no title or a defec-tive title; or

(b) . . . The banker does not incur any liability to the true

owner of the instrument by reason only of his having received payment of it; and a banker is not to be treated for the purpose of this sub-section as having been negligent by reason only of this failure to


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concern himself with the absence of, or irregularity in endorsement of a prescribed instrument of which the customer in question appears to be the payee.”

It is submitted that the appellant took detailed and reason-able steps in opening joint account having regard to exhibits E, F, G, H, J, K, L, M, N, O, P, Q, R and S. I do not think the appellant is entitled to protection afforded by section 77(2) of the Bills of Exchange Act, 1990. The respondent took the precaution to specially cross the draft with the words “Not Negotiable” and “Account Payee Only”, but the appellant paid this into an account maintained and operated by a different entity. I do not find any evidence to absolve the appellant from culpability in negligence. The appellant had opted to deal with the draft in a manner inconsistent with the right of the respondent. It is therefore, liable. A banker to whom a cheque or a draft is handed over to under these circumstances ought to be put upon inquiry, and he will be liable if he acts negligently and credits a customer with the proceeds of the cheque without having made such inquiry. In the case on hand, the appellant ought to have been put on enquiry. It cannot claim protection of the statute and should not be absolved of the resulting liability, having not deserved it.

In National Bank of Nigeria Limited v Mobil Oil Nigeria Limited (1994) 2 NWLR (Part 328) page 534 at 549 this Court considering a banker’s protection under section 2(2) of the Bills of Exchange Act, 1964 which is pari materia with section 77(2) of the Bills of Exchange Act, 1990, Sule-Gambari, JCA has this to say:–

“In the present circumstance of the case on hand, the bank (defen-dant/appellant) had gone beyond assisting the culprit; the bank be-ing presented with the cheques meant for the Lion of African Insur-ance Co Ltd; received the money from the bank (International Bank for West African Limited) on which the cheques were drawn and proceeded to credit the amount to the account of different entity du-biously coined ‘Lion of African Insurance (Consultancy) Company Limited’. This is like putting a wool in the eyes of the bank. The bank fell for it, which should not have been the case, because it ought to have been put on enquiry instead of assisting in perfecting the trick to perpetrate the fraud. Cheques meant for the benefit


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of one entity was allowed to be collected and the proceeds of them paid into a different entity. This is an act that fell below the rea-sonable standard of a prudent finance house . . . I find no act that can best or more constitute an act of gross negligence than these.”

The appellant is neither entitled to the protection of section 7(3) nor 77(2) of the Bills of Exchange Act, 1990, as care-fully probed in appellant’s Issues 3 and 4 taken above to-gether. On the whole this Appeal lacks merit and it is ac-cordingly dismissed. I affirm the judgment of the Lower Court.

The first plaintiff/respondent is entitled to the costs of N2,000 and N1,000 to the second respondent (third – third party respondent). UBAEZONU JCA: I agree. FABIYI JCA: I agree. Appeal dismissed.



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Eka Ltd and another v Nigeria Deposit Insurance Corporation

FEDERAL HIGH COURT, LAGOS DIVISION JINADU J Date of Judgment: 9 JULY, 1999 Suit No.: FHC/L/CS/707/98

Company Law – Enforcement of a statutory right – How ac-tion to be brought Interpretation of Statutes – Sections 417 and 425(1) Com-panies and Allied Matters Act Cap 59 Laws of the Federa-tion of Nigeria, 1990 Practice and Procedure – Cause of action – What consists Practice and Procedure – Cause of action – Whether any – How determined Facts The plaintiffs brought a motion at the Federal High Court seeking:– “1. An order of this Honourable Court granting leave to the

plaintiffs/ applicants to continue with the prosecution of the two suits (whose particulars are stated in the schedule hereto) instituted by the plaintiffs/applicants against Com-merce Bank and others at the Lagos High Court prior to the winding up of the said Commerce Bank.

And for such further or other Order (s) as this Honourable Court may deem fit to make in the circumstances.

SCHEDULE: 1. Suit No. LD/3732/92:– Eka Limited and another v

Commerce Bank and 3 others. 2. Suit No. LD/4018/92:– Eka Limited and another v

Bullion Trust and Securities Limited – Commerce Bank Plc and 2 others.”

The defendant on the other hand made an application for an order dismissing the suit in its entirety in view of the fact that the NDIC has assumed total control of the defendant for the purposes of liquidation.

OR An order dismissing this suit on the ground that the particulars of claim discloses no cause of action.


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AND FOR SUCH further order or orders as this Honourable Court may deem fit to make in the circumstances.

Moving the motion Counsel to the plaintiffs submitted that under section 417 of the Companies and Allied Matters Act, 1990 the leave of this Court was required before an action could be commenced or proceeded with against a company in respect of which a winding up order had been made. He said that Commerce Bank was wound up on 3 April, 1998 and so the plaintiff could not continue with the prosecution of the two suits filed in 1992. He further submitted that the defendant in this case being the liquidator of Commerce Bank had powers to defend an action or any legal proceed-ings on behalf of the company that had been wound up. He referred to section 425(1)(a) of Companies and Allied Mat-ters Act, 1990. He also submitted that the Court was en-joined to grant leave where the defendant or the company that had been wound up was a necessary party to the pro-ceedings in respect of which leave was being sought.

Counsel to the defendants speaking in support of his mo-tion argued that the action was incompetent as the actions should have abated going by the provisions of section 23(d)(i) and (ii) of the NDIC (Amendment) Decree No. 5 of 1997.

He further contended that no cause of action had been dis-closed against the defendant in the writ of summons and that the action in the Federal High Court should have been brought by Originating Summons. Since the process did not comply with the Companies Winding Up Rules, the suit should be dismissed with substantial costs.

Held – 1. Sections 417 and 425(1) of the Companies and Allied

Matters Act should be construed in their ordinary and plain meaning as they are clear and unambiguous. A construction of sections 417 and 425(1) of the Compa-nies and Allied Matters Act shows that the plaintiff herein ought to have sued that liquidated bank which was Commerce Bank Plc which still retains its existence



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as a legal entity. The plaintiff should have sued Com-merce Bank Plc in Liquidation by NDIC. This is be-cause section 417 speaks of no action or proceeding shall be proceeded with or commenced against the Company while section 425(1)(a) speaks of the liquida-tor bringing or defending an action or legal proceeding in the name and on behalf of the company.

2. To determine whether or not there is a cause of action only the writ of summons or the statement of claim can be examined and nothing more, and a cause of action consists of the bundle or aggregate of facts in the rela-tionship between the parties which the Court would rec-ognise as enabling the plaintiff to enforce a claim against the defendant. In the instant case a look at the writ of Summons to which the particulars of claim is endorsed shows that there is no relief claimed against the defendant.

3. A suit seeking the enforcement of a statutory right ought to have been brought by way of an originating summons as prescribed by the Companies Winding Up Rules. This not being the case, the suit is not properly constituted.

The plaintiff’s application struck out.


Nigerian Combined Trade Ltd v All States Trust Bank Ltd (1998) 12 NWLR (Part 576) 56 Olagunji v Yahaya (1998) 3 NWLR (Part 542) 501

Nigerian statute referred to in the judgment Companies and Allied Matters Act Cap 59 Laws of the Fed-eration of Nigeria, 1990, sections 417, 425(1)

Counsel For the plaintiff: Mr A.I. Aigbonoga For the defendant: Mr Y. Ogidan



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Judgment JINADU J: The ruling is in respect of the plaintiffs motion dated 30 June, 1998 seeking:– “1. An order of this Honourable Court granting leave to the

plaintiffs/applicants to continue with the prosecution of the two suits (whose particulars are stated in the schedule hereto) instituted by the plaintiffs/applicants against Com-merce Bank and others at the Lagos High Court prior to the winding up of the said Commerce Bank.

AND for such further or other Order (s) as this Honourable Court may deem fit to make in the circumstances.

SCHEDULE: 1. Suit No. LD/3732/92: Eka Limited and another v

Commerce Bank and 3 others. 2. Suit No. LD/4018/92: Eka Limited and another v Bul-

lion Trust and Securities Limited – Commerce Bank Plc and 2 others.”

And the defendant’s motion dated 2 December, 1998 seek-ing:–

“An order dismissing the suit in its entirety in view of the fact that the NDIC has assumed total control of the defendant for the pur-poses of liquidation.

OR An order dismissing this suit on the ground that the particulars of claim discloses no cause of action. AND FOR SUCH further order or orders as this Honourable Court may deem fit to make in the circumstances.”

The plaintiff’s application is supported by an affidavit of 9 paragraphs while the defendant’s motion is supported by an affidavit of 6 paragraphs.

Moving the application dated 30 June, 1998 the learned Counsel for the plaintiffs relied on all the paragraphs of the affidavit in support particularly paragraphs 4–9. He referred to exhibits A, A1, B and B1 which are the writs of summons and the statement of claim in the two suits mentioned in the schedule to this application. He submitted that under section 417 of the Companies and Allied Matters Act, 1990 the leave of this Court is required before an action can be com-menced or proceeded with against a company in respect of


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which a winding up order has been made. He said that Com-merce Bank was wound up on 3 April, 1998 and so the plain-tiff cannot continue with the prosecution of the two suits filed in 1992. He further submitted that the defendant in this case being the liquidator of Commerce Bank have powers to de-fend an action or any legal proceedings on behalf of the com-pany that has been wound up. He referred to section 425(1)(a) of CAMA, 1990. He also submitted that the Court is enjoined to grant leave where the defendant or the com-pany that had been wound up is a necessary party to the pro-ceedings in respect of which leave is being sought. He re-ferred to Abekhe v NDIC (1995) 7 NWLR (Part 406) 228 at 242–243. He submitted that based on this authority this Court is not enjoined to comment on the probable fate of the pend-ing suit already before the Lagos High Court as it is enough if the claim is not frivolous. He submitted that from the proc-esses before the Court there is no denial that these two suits were filed at the Lagos High Court in 1992 and that the suits are still pending. He also submitted that despite the fact that these two suits are pending at the Lagos High Court which is a Court of co-ordinate jurisdiction this Court still has powers to grant the leave sought. He submitted that under section 417 of CAMA, it is provided that except by the leave of Court no proceedings shall continue and that the Court is de-fined in section 650 of CAMA as the Federal High Court. He said that this has been pronounced upon judicially in Abekhe cases (supra) at page 243 paragraphs G–H. Learned Counsel further submitted that the application of the defendant based on the provisions of section 23(d)(i) of the NDIC (Amend-ment) Decree, 1997 is misconceived and that the provision is totally inapplicable to the present case. He said the plaintiff’s position provides for a situation totally different from the plaintiffs and that it applies to a situation where a fresh suit is being instituted against a company whose control has been assumed for the purpose of liquidation by the NDIC. He said that this present case is not a fresh matter but two pending suits filed as long as 1992 at the Lagos High Court and this suit herein is only for leave to continue with the prosecution


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of those two suits as provided for in section 417 of CAMA. He said that section 417 creates two different situations, one is proceeding with an action and the other is commencing an action. He submitted that the situation dealt with by section 23(d)(i) of NDIC (Amendment) Decree, 1997 is only in re-spect of instituting new action and not in respect of existing or pending actions. He further submitted that the suit herein is not even against an insured institution whose control has been taken over for the purposes of liquidation but against the liquidator who is enjoined under section 425(i)(a) of CAMA to defend any action against the company. He urged the Court in the interest of justice to grant the application as it is properly before the Court. He also urged the Court to dismiss the defendant’s application for being misconceived.

In his reply the learned Counsel for the defendant referred to the application dated 2 December, 1998 filed by the de-fendant which is supported by a 6 paragraph affidavit. He said that the application contains two alternative prayers. That the first is asking for an order dismissing the suit in its entirety in view of the fact that the defendant has assumed total control of Commerce Bank for the purpose of liquida-tion. He relied on paragraphs 3 and 4 of the affidavit in sup-port and the provisions of section 23(d)(i)(ii) of the NDIC (Amendment) Decree No. 5 of 1997 which means that any suit against an insured institution shall abate, cease or be discontinued. He said that the question that comes to mind are:– (1) Is this action against a liquidated insured institution? (2) Has the defendant assumed control for the purpose

of liquidation? (3) What are the laws in force concerning this particular

matter? Learned Counsel then submitted on (1) that the answer is in the affirmative, so it falls within the purview of section 23(d)(i) and (ii) of Decree No. 5 of 1997. He also answered question (2) in the affirmative as the defendant has assumed control for the purpose of liquidation. On question (3) he


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submitted that the law with respect to a liquidated or wound up company in Nigeria includes, inter alia, CAMA, 1990, and Companies Proceedings Rules, 1990. He said that the provisions of sections 418 and 425(1)(a) of CAMA referred to by the learned Counsel is in conflict with the provisions of section 23(d)(i), (ii) of Decree No. 5 of 1997 and there-fore cannot assist the plaintiff in bringing this action.

He submitted that Decree No. 5 of 1997 has overtaken the provisions of CAMA. With respect to the submission that the provisions of CAMA apply to only fresh suits learned Counsel submitted that the provisions of Decree No. 5 of 1997 are so conspicuous and need no importation of such interpretation. He submitted that the provisions of section 23(d)(ii) in particular made specific provisions for different stages of a suit. He submitted that the provisions of section 23(d)(i), (ii) cover all situations and not just fresh or new suits or old and stale matters. He argued that by the provi-sions of Decree No. 5 of 1997 this action cannot succeed.

On the second prayer contained in the motion dated 2 De-cember, 1998 learned Counsel relied on paragraphs 4 and 5 of the affidavit in support. He said cause of action has been defined in Fawehinmi v Akilu (1994) 6 NWLR (Part 351) 487 paragraphs D–E, Combined Trade Limited v All States Trust Bank Limited (1998) 12 NWLR (Part 576) 56 at 58 and Olagunju v Yahaya (1998) 3 NWLR (Part 542) 501 at 504 ratios 2 and 3. He said that the plaintiff just filed the particulars of claim supported by a motion on notice both dated 30 June, 1998 and submitted that the court is enjoined to look only at the particulars of claim and the statement of claim as stated in Olagunju v Yahaya (supra). He said there are not writ of summons and the statement of claim. He submitted that the particulars of claim do not disclose the bundle of facts or aggregate facts or acts on the part of the defendant which give the plaintiff its cause of complaint. He said that the case of John A. Adepoju v Honourable Justice S.A. Afonja (1994) 8 NWLR (Part 363) 437 at 424 ratios 5 and 6 has instructed on what to do for a writ of summons or particulars of claim that does not disclose a cause of action. He submitted further that the principle behind ratio 5 would


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be of valuable assistance to the court, that is, that even where the plaintiffs statutorily bestowed with some rights as bestowed on the plaintiff in this action by section 417 of CAMA once it is clear that the plaintiff has not disclosed a cause of action such rights cannot be enforced because the Court must decline to exercise its jurisdiction in such matter. He submitted that the Companies Proceedings Rules, 1992 prescribes the procedures by which all rights enshrined by CAMA may be enforced and that Rule 2 states the proce-dure to be taken by the plaintiffs, the plaintiff’s application as filed does not look in any way as prescribed by Rule 2(1) because he had not come by originating summons. He said that it had been held by the Supreme Court in Kano State Oil and Allied Products Limited v Kofa Trading Company Lim-ited (1996) 3 NWLR (Part 436) 244 at 254 paragraphs D–E. He said further that this is an indication that this action is not properly before the Court because of non-compliance with the prescribed essential preliminary requirement to the insti-tution of this action and failure to follow this process is an abuse of Court process as stated in Kano State Oil and Allied Products Case, (supra) therefore the action of the plaintiff should be dismissed with costs. He relied on Ralph Nejeh Ojabo v Inland Bank Nigeria Limited (1998) 11 NWLR (Part 574) 433 at 435 and 439 lines A–B. He finally submit-ted that the plaintiff’s suit cannot succeed and should be dismissed with substantial costs.

In his reply on point of law the learned Counsel for the plaintiffs submitted that the submission that the provisions of CAMA is in conflict with the provisions of section 23(d) of NDIC Decree No. 5 of 1997 is misconceived as the words used are clear and unambiguous. He urged the court to give them their plain and ordinary meaning. He referred to Abioye v Yakubu (1991) 5 NWLR (Part 190) 130 at 203 paragraph H; Atuyeye v Ashamu (1987) 1 NWLR (Part 49) 267. He said that it is trite law that the legislature does not intend to make material and substantial alteration in a law beyond what it explicitly declares either expressly or by clear implication. He referred to Abioye case (supra) and Adesina v Lemomu (1965) 1 All NLR 233. He said that it


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cannot be presumed that parliament intended to change the law. He said that the provisions of section 417 provides for two situations:– (1) proceeding with action that has already been insti-

tuted; and (2) commencing an action whereas the provisions of

section 23(d) of NDIC (Amendment) Decree deals with only one situation which is instituting an ac-tion.

Learned Counsel submitted that instituting an action and commencing an action are one and same thing. He submit-ted that if parliament had intended to abrogate the provi-sions of section 417 of CAMA as submitted that it would have expressly included suits that are pending in the provi-sions of section 23(d) and since it did not pending suits are still governed by the provisions of section 417 of CAMA. Learned Counsel then said that assuming that there is an ambiguity in the provisions of section 23(d) and the provi-sions of CAMA the court should adopt the interpretation or construction that will preserve the individual rights. He re-ferred to Din v Federal Attorney-General (1988) 4 NWLR (Part 87) 148. He submitted that section 23(d)(ii) only spelt out the consequences of not complying with the provisions of section 23(d)(i) and no more.

Learned Counsel then submitted that a cause of action is defined as the factual situation which makes a matter in liti-gation an enforceable right or an actionable wrong. He said that the facts are not in dispute. He submitted that the sub-mission that the Court can only look at the writ of summons and the statement of claim is untenable. He also submitted that the procedure for filing an action at the State High Court and the Federal High Court are different procedures as plead-ings can only be filed upon the court making an order for pleadings in the Federal High Court and that this has not been done in this case. He submitted that the fact that the plaintiff who has a reasonable cause of action commences same by an allegedly wrong procedure will not deprive the plaintiff of his remedy as the court is enjoined to do substantial justice rather


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than allow the plaintiff’s case to be defeated by technicality. He submitted that where there is a right there is a remedy. He commended Expo Ltd v Pafab Enterprises Ltd (1992) 2 NWLR (Part 591) 449 at 464 paragraphs A–B and Consor-tium MC v N.E.P.A. (1992) 6 NWLR (Part 246) 132. He urged the court to grant this application.

For the defendant, learned Counsel Mr Ogidan submitted that he who comes to equity must come with clean hands. He said that the Companies Proceedings Rules, 1992, Rule 2 actually stated the way learned Counsel should have come which is by an originating summons but he did not come by that way so he cannot hide under the big umbrella of equity to seek the protection of the court. He said the expression Expressio unius est exclusio alterus which is that the exclu-sion of one thing is exclusion of another is enough to show that learned Counsel’s application should be dismissed. He referred to Lakanmi v Attorney-General of the Federation (1971) 1 U.I.L.R. (Part 2) 201 and Gani Fawehinmi v Abacha (1996) 9 NWLR (Part 475) 749 paragraphs C–E which states the supremacy of a Decree over any statute, law or legislative judgment. He urged the court to dismiss the application dated 2 December, 1998.

I have read the processes filed and the submissions of both learned Counsel. I am of the view that the decision in this suit rests on the construction given by the court to the provi-sions of sections 417 and 425(1)(a) of the Companies and Allied Matters Act, 1990 (“CAMA”) and section 23(d)(1), (2) of the Nigeria Deposit Insurance Corporation (Amend-ment) Decree No. 5 of 1997. I am of the view that these sec-tions should be construed in their ordinary and plain mean-ing as they are clear and unambiguous. First, a construction of section 417 and 425(1)(a) of CAMA clearly shows that the plaintiff herein ought to have sued that liquidated bank which was Commerce Bank Plc which still retains its exis-tence as a legal entity. The plaintiff should have sued Com-merce Bank Plc in liquidation by NDIC This is because sec-tion 417 speaks of no action or proceeding shall be pro-ceeded with or commenced against the Company while


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section 425(1)(a) speaks of the liquidator bringing or de-fending an action or legal proceeding in the name and on behalf of the company. There is no doubt that the company referred to in both sections is Commerce Bank Plc and not NDIC On this ground alone this action fails.

The defendant argued that there is no cause of action therefore the suit should be dismissed. To determine whether or not there is a cause of action only the writ of summons or the statement of claim can be examined and nothing more. As pleadings have not been ordered or served only the writ of summons can be looked at. I have looked critically at the writ of summons and I have found that there is no allegation against the defendant for which the plaintiff can be entitled to relief for violation of its legal right. As held in Combined Trade case (supra) a cause of action con-sists of the bundle or aggregate of facts in the relationship between the parties which the Court would recognise as enabling the plaintiff to enforce a claim against the defen-dant. (See also Olagunji v Yahaya (1998) 3 NWLR (Part 542) 501 to the same effect.) It is correct from a look at the writ of summons to which the particulars of claim is en-dorsed shows that there is no relief claimed against the de-fendant herein therefore there is no cause of action and this suit ought to be struck out. I also agree with the learned Counsel for the defendant that this suit seeking the en-forcement of a statutory right ought to have been brought by way of an originating summons as prescribed by the Com-panies Winding Up Rules. Having found that this suit is not properly constituted I do not think it proper to decide on whether or not the provisions of section 417 of CAMA con-flicts with those of section 23(d)(1), (2) of Decree No. 5 of 1997.

Upon all the above premises this action fails and it is hereby struck out.

[1999] 9 N.B.L.R. (FEDERAL HIGH COURT, ABUJA DIVISION)

Khaled B. Chami v. Trade Bank Plc and another 685

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Khaled B. Chami v Trade Bank Plc and another FEDERAL HIGH COURT, ABUJA DIVISION AUTA J Date of Judgment: 12 JULY, 1999 Suit No.: FHC/ABJ/M12/99

Fundamental Rights – Threatened breach – Right to apply for enforcement Guarantee – Default by principal to liquidate facility – Ar-rest of guarantor by police – Propriety of Police – Civil transaction between banker and customer – Use of police to arrest and harass customer – Propriety of Police – Power of investigation and arrest – Whether ex-tends to civil cases Facts The applicant was a former director of a company Rasha En-terprises, which took a loan from the first respondent bank. The applicant guaranteed the loan. The applicant subse-quently resigned his directorship of the company. This res-ignation was accepted and deeds of indemnity were exe-cuted in his favour by the company in respect of any claim that may arise against the company.

The company defaulted in liquidating the loan. The appli-cant was arrested by the police. He thereupon brought the present application for enforcement of his fundamental rights to freedom of movement. It was his contention that the matter was purely a civil transaction between the appli-cant and the first respondent bank for which the police ought not to be involved nor could it necessitate his arrest and de-tention. This was so even if he guaranteed the loan. The ap-plicant therefore sought an order of the court to declare his arrest on the loan as unlawful. Held – 1. From the evidence before the court, there was a business

transaction between the applicant, the company and the first respondent bank. It is a civil transaction between



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the Bank and their customer. It is not a criminal case and it has no criminal flavour attached to it. If there is any breach of the loan agreement or default on the side of the company, the proper channel to follow is by tak-ing the matter to the appropriate court since there is no evidence of criminality on the side of the applicant.

Per curiam “If they feel that he ought not to be absolved from the loan

agreement being a guarantor of the loan, they have the right to take him to the appropriate court. Or they enforce the term of the guarantee against his properties in the court. It does not call for the arrest of the applicant. Though the re-spondents have denied arresting the applicant.”

2. It is trite law that an applicant can apply to the court to protect his fundamental right even if threatened and not necessarily until it is breached.

3. The police have the right to investigate any criminal matter reported to them, it is there constitutional duty, but they are not to be involved unnecessarily in civil cases.


Counsel For the applicant: S.E. Eleme For the first respondent: I.A. Yusuf For the second respondent: T.K. Wudapea (with him O.I. Brainon)

Judgment AUTA J: The applicant in this case by a motion ex parte brought this action under Order 1 Rule 2 of the Fundamental Right Enforcement Procedure Rules praying for an order of this Court for leave to enforce his fundamental right against the respondent. An order restraining the respon-dents, their servant, agent, privies or otherwise howsoever from arresting, detaining harassing, molesting or interfering in any way whatsoever with the applicant’s freedom of


Auta J

Khaled B. Chami v. Trade Bank Plc and another 687

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movement pending the hearing and determination of the mo-tion on notice. The said order was granted ex parte but only relief one. Thereafter, the applicant filed a motion on notice. The applicant’s case is that the applicant was a former direc-tor of a company which took loan from the Bank, but by ex-hibit A the applicant has resigned his directorship of the company. He exhibited exhibit B which shows that the com-pany has accepted his resignation. He also tendered exhibits C and D, which are deeds of indemnity which indicate that the applicant was indemnified by the Company in respect of any claim that may arise against the company. They are therefore seeking the order of the court to declare that the arrest of the applicant on this loan is unlawful. The applicant is of the view that even if the applicant guaranteed the loan, it could not be said that the transaction is tainted with any criminal flavour as to warrant the use of the law enforce-ment agent, to abridge the fundamental rights of the appli-cant. The first respondent filed a counter affidavit, and drew the attention of the court to the contradiction in the appli-cants counter affidavit, which said that the loan was ob-tained without his knowledge. But at the same time they an-nexed a letter from the applicant guaranteeing the loan. He insisted that it was the applicant who guaranteed the loan by exhibit OA1. That by exhibit C it shows that the deed was made by the applicant.

They referred the court to the Police Act with regards to the powers of the police to investigate cases and to preserve law and order. That if there is any crime committed, the po-lice have a right to investigate the matter. The respondent said that the applicant was not arrested by the police. He urged the court to dismiss this application. The applicant Counsel submitted that the court is empowered to grant the relief even if the right was only threatened. That the proper cause of action for the respondent is to approach the court in accordance.

From the evidence before the Court exhibit A, the appli-cant was a director of Rasha Enterprises. By exhibit B, the Company accepted his resignation from the company on the


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26 May, 1998. Exhibit C attached to the motion on notice is the deed of indemnity. These facts are not in dispute. I also find that the loan agreement was entered into with the full knowledge of the applicant. He guaranteed the loan. From the evidence before the court, these facts point to a business transaction between the applicant, the company and the Trade Bank. It is a civil transaction between the Bank and their customer. It is not a criminal case and it has no crimi-nal flavour attached to it. If there is any breach of the loan agreement or default on the side of the company, the proper channel to follow, is by taking the matter to the appropriate Courts since there is no evidence of any criminality on the side of the applicant. If they feel that he ought not to be ab-solved from the loan agreement being a guarantor of the loan, they have the right to take him to the appropriate court. Or they enforce the term of the guarantee against his properties in the court. It does not call for the arrest of the applicant. Though the respondents have denied arresting the applicant, it is trite law that an applicant can apply to the court to protect his fundamental right even if threatened and not necessarily until it is breached. The police have the right to investigate any criminal matter reported to them, it is there constitutional duty, but they are not to be involved un-necessarily in civil cases. I therefore order the respondents, especially the first respondent not to instigate the second re-spondent, to use his agents, servants, privies or interfering in any manner with the freedom of movement of the applicant in respect of this civil transaction between the applicant and the first respondent. The first respondent is at liberty to take the matter before the appropriate court of law. That is the order of the court.


Unibiz Nigeria Ltd v. Equity Bank Ltd and another 689

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Unibiz Nigeria Limited v Equity Bank Ltd and another

FEDERAL HIGH COURT, LAGOS DIVISION TSOHO J Date of Judgment: 13 JULY, 1999 Suit No.: FHC/L/CS/256/99

Banking – Facility – Bank recalling facility – Whether automatically means that customer paid back the facility Banking – “To call in” facility – Meaning of Facts On 29 June, 1990 Sunil Bhojwani (PW1) in continuation of his testimony before this Court stated that he (ie plaintiff) did not enjoy the credit facility of N48 Million granted by Magnum Trust Bank Limited vide exhibit 22. According to him whereas the credit facility was valid till 12 August, 1999, it could not reach the maturity date because Magnum Bank on 18 February, 1999 wrote the plaintiff calling in the facility because of the notice of appointment of a Re-ceiver/Manager for the plaintiff, hence he had to pay back the extent of the facility to the tune of N68,658,994.70.

The second defendant took objection to this evidence as to payment of the money. He contended that the assertion that a facility was called in did not automatically mean that the plaintiff paid back the facility. He further submitted that the act of payment was a material issue that should have been specifically pleaded.

Counsel to the plaintiff in response submitted that para-graph 23D(4) of the statement of claim gave the defendant sufficient notice of the nature of the evidence being put up by the plaintiff’s witness. Held – 1. The plaintiff by the use of the phrase is saying that the

credit facility which he was already enjoying from Mag-num Trust Bank was “withdrawn” from him as a result of the appointment of the Receiver/Manager. It is very



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logical to presuppose that the plaintiff paid back the credit facility.

2. “To call in” means “to withdraw” or “take back”. Objection overruled.

Counsel For the plaintiff: Tayo Oyetibo, Esq. (appearing with Uwem Essien, Esq. and A.O. Orewale, Esq.)

Judgment TSOHO J: On 29 June, 1990 Sunil Bhojwani (PW1) in con-tinuation of his testimony before this Court stated that he (ie plaintiff) did not enjoy the credit facility of N48 Million granted by Magnum Trust Bank Limited vide exhibit 22. According to him whereas the credit facility was valid till 12 August, 1999, it could not reach the maturity date be-cause Magnum Bank on 18 February, 1999 wrote the plain-tiff calling in the facility because of the notice of appoint-ment of a Receiver/Manager for the plaintiff in the “This Day” Newspaper (exhibit 6). PW1 having being led in evi-dence by his Counsel proceeded to say that Magnum Trust Bank through exhibit 22A called in the facility and de-manded that the plaintiff should pay N68,658,994.70 before February 26, 1999 and that he paid the said sum. Mr Akin-yemi for the defence took objection to the last piece of evi-dence as to payment of the money. He contended that the evidence to the effect that the amount was paid is not pleaded. According to him, to assert that a facility was called in does not automatically mean that the plaintiff paid back the facility. He asserted that the act of payment is a material issue that should have been specifically pleaded. He further contended that the fact that the facility was called in and the plaintiff alleges that he suffered financial stress is not synonymous with payment.

In reply, Mr Oyetibo for the plaintiff submitted that para-graph 23D(4) of the statement of claim sufficiently covered the evidence being led by PW1, since what is required to be pleaded are material facts, and not the evidence with which


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those facts are sought to be established. He relied on the case of Okafor v NHDS (1972) 4 SC. 175 at 185 to submit that if the defendant was in doubt as to the scope of the facts stated in paragraph 23D(4), he ought to have asked for and obtained further and better particulars of the averment. He further contended that besides that the trend of the pleading in the whole of paragraph 23 shows clearly that the plaintiff was complaining of the financial distress occasioned to him because of the appointment of the second defendant as a Re-ceiver. That it being so, the defendants had sufficient notice of the case being put up. Mr Akinyemi replied on a point of law as to the relevance of further and better particulars. He argued that this is requested where pleadings is general, am-biguous or evasive, in order to clarify that pleading. He opined that the pleadings in this case are very clear. That what they are objecting to, is a piece of evidence which goes beyond showing that Magnum Trust Bank asked the plaintiff to come and repay, to say that payment was made. He sub-mitted that the principle of further and better particulars is not applicable in this matter and even Okafor’s case (supra) states the inapplicability of the principle. May I start by ob-serving that I have looked up the case of Okafor v NHDS (supra) and it contributes no more to this matter than the statement that a party who is not clear with an aspect of the pleadings of the opponent is entitled to ask for further and better particulars of same, else he would not be heard to complain. In our case, Mr Akinyemi has observed that the pleading is very clear and there is no need for better and fur-ther particulars. I agree with him. The question however is whether it can be said that by paragraph 23D(4) of the statement of claim, that the defendants had sufficient notice of the nature of the evidence being put up by PW1. For pur-poses of clarity, I hereby reproduce paragraph 23D(4) of the statement of claim as follows:–

“(4) Upon reading the publications in the newspapers, the Man-aging Director and the General Managers of the Bank rushed to the plaintiff’s office for an on the spot assessment of the plaintiff’s of affairs. All explanations by the plaintiff that the newspaper publication was mischievous and should


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be disregarded were unacceptable to the Bank as the Bank on that same day 18 February, 1999 wrote to call in their fa-cility. This caught the plaintiff by surprise and further aggra-vated the financial stress being occasioned to the plaintiff.”

To my mind, the crux of the objection is the construction or interpretation of the phrase “the Bank . . . wrote to call in their facility”. Stress is on the expression “call in”. Does the use of this phrase readily or automatically mean that the plaintiff paid back the facility? I must say without hesitation that the phrase can only be meaningfully interpreted if taken in the whole context of paragraph 23D(4) of the Statement of Claim vis-à-vis exhibit 22A, which is pleaded in that same paragraph.

Taken in that context therefore, the plaintiff by the use of that phrase is saying that the credit facility which he was al-ready enjoying from Magnum Trust Bank was withdrawn from him as a result of the appointment of the second de-fendant as a receiver. In essence, my interpretation is that suitable alternative expressions for the phrase “to call in” contextually, should be “to withdraw” or “take back”.

If in the context these are accepted to be correct alternatives, then it is very logical to presuppose that the plaintiff paid back the credit facility he was enjoying when Magnum Bank with-drew or decided to take it back. This obviously goes beyond mere conjection, because if this were not the position the plaintiff would not go to the extent of saying: “This caught the plaintiff by surprise and further aggravated the financial dis-tress being occasioned by the plaintiff”. In my view therefore, the plaintiff by virtue of paragraph 23D(4) had sufficiently no-tified the defendants as to the nature of the case.

My interpretation appears enhanced when viewed against exhibit 22A, which is the letter from Magnum Trust Bank dated 18 February, 1999 calling in the facility. The said let-ter is mentioned in paragraph 23D(4). Paragraph 3 of exhibit 22A reads as follows:–

“We will appreciate receipt of your bank certified cheque for N68,654,994.70 (Sixty-Eight Million, Six Hundred and Fifty Four Thousand, Nine Hundred and Ninety-Four Naira, Seventy Kobo)


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only being outstanding on your finance facility with us not later than the close of business on Friday, February 26, 1999 in settle-ment of the outstanding and accrued interest charges.”

Considering the terse language of exhibit 22A as quoted above, it cannot be taken to have been written for fancy. My reasoning is that if it had not been complied with the plain-tiff would not have complained of financial distress. At this juncture, I would like to conclude that while I agree with Mr Akinyemi that the matter of payment is a material fact, failure to plead it specifically is not grievous, as that fact, in my humble opinion, is very readily implied both in para-graph 23D(4) of the statement of claim and exhibit 22A. I dare say that with exhibit 22A already in evidence, there was no good basis for the objection.

Finally therefore, I hold in the light of all the foregoing, that Mr Akinyemi’s objection is not sustained and is accord-ingly overruled.



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D. Stephens Industries Ltd and another v Bank of Credit and Commerce International

(Nigeria) Ltd and another SUPREME COURT OF NIGERIA KARIBI-WHYTE, KUTIGI, ONU, KALGO, UWAIFO JJSC Date of Judgment: 15 JULY, 1999 Suit No.: SC.117/199

Banking – Account – Closure of same by customer – Notice to be given thereto – How made – Closure by banker – No-tice required – Consequences of closure Facts The plaintiffs/applicants (hereinafter called “the appel-lants”) sued in the High Court, Port Harcourt for general damages of N1,000,000 (One Million Naira) because their cheque for N162.45 dated 30 July, 1984 was returned un-paid by the defendants/respondents (hereinafter called “the respondents”) with the endorsement “Drawer’s Attention Required”. The learned trial Judge gave judgment for the appellants for the sum of N25,000 (Twenty-Five Thousand Naira) holding that such an endorsement was defamatory of them. He said: “I have come to a finding that the words were capable of having a libellous meaning and indeed were libellous of the plaintiffs. I have also held that the defence of justification cannot stand”.

The defence of justification referred to was whether the current account of the appellants on which the cheque in question was drawn had been effectively and properly closed at the time the cheque came through. If it had, then it followed that the appellants had no cause of action. That was the issue the Court of Appeal decided.

The cheque in question was dated and given to one Clara Clement Kalio on the 30 July, 1984 by the appellants. She lodged the cheque into her account with First Bank of Nige-ria. Port Harcourt Branch. The cheque got to the first re-spondent Bank on 8 August, 1984 and returned unpaid on the 9 August 1984 with the inscription “Drawer Attention


D. Stephens Industries Ltd v. Bank of Credit and Commerce 695

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Required” (DAR). The excuse of the respondent for not honouring the cheque was that on the 23 July, 1984, the sec-ond appellant feeling dissatisfied with the respondent in-structed that the first appellant’s account be closed. The ac-count was accordingly closed on 2 August, 1984. The bal-ance of the account was forwarded to the appellant in writ-ing which they accepted. The Court of Appeal reversed the judgment of the High Court, consequently the appellant ap-pealed to the Supreme Court.

Held – 1. Since the customer is entitled to withdraw his balance on

demand, it would appear that he is under no obligation to give any advance notice of his decision to close his ac-count. The closing of the account does not necessarily bring the mutual obligations to an end. The customer clearly remains liable for any overdraft, and the banker for properly conducting any operation needed in connec-tion with the closure.

2. It is when it is the banker who decided to have the ac-count of the customer closed that he must give the cus-tomer reasonable notice in case there are outstanding cheques to be cleared or some business the customer in-tends to conclude through the Bank account. It is a term of the contract that the Bank will not cease to do busi-ness with the customer except upon reasonable notice. The customer must therefore be given time by the Banker to make such arrangements as are necessary to protect his credit and credibility.

3. When a customer gives notice to have his account closed, he may revoke that notice before the Banker acts on it, because such notice operated as no more than a revocable mandate to the Bank, so that until it was acted upon, it was open to the customer to revoke it.

4. The relationship of Banker and customer depends basi-cally on the ordinary principles of contract and it could, at least, in theory, be brought to an end in any of the ways a contract may be determined. But in practice, it



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could more properly be terminated by mutual agree-ment, by the death of the customer, by the mental disor-der of the customer, and by bankruptcy or winding up of either party.

Appeal dismissed.


Nigerian Atuyeye v Ashamu (1987) 1 NWLR (Part 49) 267 Globe Fishing Inds. Ltd v Coker (1990) 7 NWLR (Part 162) 265 Shyllon v Asein (1994) 6 NWLR (Part 353) 670

Foreign Berry v Halifax Commercial Banking Co (1901) 1 Ch 188 Buchingham and Co v London and Midland Bank (1895) 12 TLR 70 Joachimson v Swiss Bank Corporation (1921) 3 KB 110 Prosperity Limited v Lloyd’s Bank Limited (1923) 39 TLR 372 Rekstin v Severo Sibisko and the Bank of Russian Trade (1933) 1 KB 47

Nigerian rules of court referred to in the judgment Supreme Court Rules, Order 8 Rule 2(3)

Books referred to in the judgment Law of Banking by Lord Chorley (6ed) page 349 Leading Cases in the Law of Banking by Chorley and Smart (4ed) page 304

Counsel For the appellant: Kolawole Shomade (with Brown) For the respondent: S.I. Anyanwu



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Judgment

UWAIFO JSC: (Delivering the lead judgment) This appeal is from a decision of the Court of Appeal, Port Harcourt Divi-sion given on 23 January, 1992. The plaintiffs/appellants (hereinafter called the appellants) sued in the High Court, Port Harcourt for general damages of N1,000,000 because their cheque for N162.45 dated 30 July, 1984 was returned unpaid by the defendants/respondents (hereinafter called the respondents) with the endorsement “Drawer’s Attention Re-quired”. The learned trial Judge gave judgment for the ap-pellants for the sum of N25,000, holding that such an en-dorsement was defamatory of them. He said “I have come to a finding that the words were capable of having a libellous meaning and indeed were libellous of the plaintiffs. I have also held that the defence of justification cannot stand”.

The defence of justification referred to was whether the current account of the appellants on which the cheque in question was drawn had been effectively and properly closed at the time the cheque came through. If it had, then it follows that the appellants had no cause of action. That was the issue the Court of Appeal decided. In his leading judg-ment, Edozie, JCA observed as follows:–

“. . . If the account had been closed at the material time then the endorsement on the cheque, exhibit A, with the words complained of would not have been actionable. It is important to appreciate that the operative moment is the time when the endorsement com-plained of was made on the cheque exhibit A. According to the appellants, it was on August 9, 1984 when exhibit A was presented through the clearing house. If at that material time the account in question had not been closed and was in sufficient funds to meet the value of the cheque, then, in the absence of any acceptable ex-planation, the appellants stood to be mulcted in damages.”

He later concluded on the crucial issue whether the account had been closed and the performance of the trial Judge in respect of the evidence thereon by saying, inter alia:–

“It is trite law that where the court of trial fails to appraise the facts and make specific finding of fact on points which are crucial to the proper determination of the case before it, an appellate court


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will intervene to set aside the judgment of the lower court on the case . . . It is my view that since the learned trial judge had failed to make a specific finding on whether or not the second respon-dent demanded that the account be closed and having contrary to the trend of evidence held that the account had not been closed, that finding is perverse and cannot support the judgment.”

The appellants have now appealed that judgment upon eleven grounds of appeal. From the said grounds of appeal seven issues for determination were set down in the appel-lants’ brief of argument. The respondents filed no brief of argument and took no steps whatever to contest the appeal. I must say that most of the grounds of appeal as well as the issues for determination are misconceived and unnecessary. They are mainly on the competence of the grounds of appeal filed in the lower court. The present appellants took a pre-liminary objection against them there and the court carefully resolved the objection. In the end, it decided the appeal vir-tually on two of the grounds, namely, Grounds 1 and 2.

I note that Ground 1 was not objected to by these appel-lants. Ground 2 was objected to on the ground that it con-tained no particulars. But that ground, as held by the lower court quite rightly, in my view, has particulars incorporated in it. The said Grounds 1 and 2 were stated as follows:– “1. The learned trial Judge erred in law and on the facts in

holding that the account of the first plaintiff with the first appellant had not been closed at the time material to this action when:–

(i) There was evidence before him by Chief Warmate who was referred to in paragraph 10 of the statement of claim that the second plaintiff demanded the imme-diate closure of the first plaintiff’s account.

(ii) Exhibit D which the learned trial judge held was not dated was in fact dated August 9, 1984 and was duly acknowledged to have been received by the first ap-pellant on August 9,1984.

2. The learned trial judge erred in law and on the facts in holding that July 30, 1984 appearing on exhibit A which is a specifically crossed cheque is the date material to the ac-tion and not August 9, 1984 which was the date when ex-hibit A came through the clearing house to the first appel-lant.”


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It must be said that the framing of a ground of law or misdi-rection requiring that particulars be supplied may well be a question of the skill of the Counsel who raises the ground of appeal. The particulars supporting such a ground need not always be adumbrated. They can often be conveniently laced with or embedded in the complaint made in the ground of appeal to show the reason for such a complaint, which makes the ground somewhat self-explanatory. That is the ultimate purpose of requiring particulars. They tend to high-light briefly why and how the error of law occurred. In other words, the appellant says “I complain that the court has erred in law in the way it resolved the issue in question. My reason for this is because” which reason is then given as part of the complaint if straightforward and short. But if the rea-sons are many, there could be need to set them out. Which-ever form they are given, they are the particulars envisaged in Order 8 Rule 2(3) of the Rules of this Court (see Atuyeye v Ashamu (1987) 18 NSCC (Part 1) 117 at 130; (1987) 1 NWLR (Part 49) 267 at 268; Globe Fishing, Industries Ltd v Coker (1990) 7 NWLR (Part 162) 265 at 300 and Shyllon v Asein (1994) 6 NWLR (Part 353) 670 at 685.)

It was those two grounds of appeal I have already repro-duced that supported the main and perhaps the only issue upon which the appeal was decided. Consequently, the only two issues which call for consideration on this appeal out of the seven stated by the appellants are:– (1) Was the Court of Appeal right to reverse the decision of the trial judge that the account of the appellants was not properly closed. (2) Whether the Court of Appeal was correct in disturbing the findings of the High Court under the circumstances of this case.

The evidence is that the cheque in question was dated and given to one Clara Clement Kalio (PW1) on 30 July, 1984 by the appellants. She lodged it into her account with First Bank of Nigeria Ltd, Port Harcourt Main Branch. The cheque got to the first respondent bank on 8 August,1984 and returned unpaid on 9 August, 1986 with the words “Drawer’s Attention Required”. The excuse the respondents


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gave for not honouring the cheque was that on 23 July, 1984 in the presence of One Philetus George Warmate (DW1) and one Celina Teka (DW2) in the office of the first respon-dent bank’s manager, Mr Rajan Tampi (DW4), the second appellant feeling dissatisfied with the respondents, in-structed that the first appellant’s account be closed. The re-spondents said the account was accordingly closed on 2 Au-gust, 1984. The respondents then forwarded the balance in that account in a cheque by letter to the appellants, which they accepted. If that was the position, the respondents had no obligation to pay the appellants’ cheque which came in after 2 August.

The learned trial Judge considered the evidence on the point. He made some comments which tended to show that he was not satisfied with the manner the account was closed. He said:–

“If a demand to close the account was made on 23 July, 1984 as the defendants claim, it can hardly be said that closing it on 2 August, 1984 gave enough time for pending transactions to be concluded.”

Eventually, the learned trial Judge ended that issue as fol-lows:–

“In summary, it is my finding that the closing of the account by the defendants was not properly done. If indeed the second plaintiff demanded closure in a fit of temper the defendants ought to have raised the matter again in a calmer and more sober occasion and atmosphere than that described by the defendants when the second plaintiff asked that the account be closed and should have then in-formed the plaintiffs in writing when the account would be closed.”

I think this was a finding that the account was closed at the request of the second appellant. The comments made by the learned trial judge as to what should have been the attitude of the respondents to that request might have raised questions of law whether the respondents owed the appellants that kind of obligation in the circumstances. The court below misconceived the essence of what the trial court did when it came to the conclusion that the trial court made no specific finding of fact on whether the second appellant demanded that the account be closed and that it erred on the evidence to have held that the account had not been closed. The trial


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court certainly did make a finding that the account was closed at the request of the second appellant upon a proper understanding of the passage quoted above from the judg-ment of that court, except that it said that it was an improper closure in the circumstances the request was made.

The real issues are, (1) In what manner should a notice to close an account be made by a customer? (2) What is the consequence of such a notice and (3) What is the obligation of the bank on receiving the notice? As regards Issue (1), there does not appear to be any decided case on it but Lord Chorley who is regarded as a leading authority on Banking Law says in his Law of Banking (6ed) page 349:–

“Since the customer is entitled to withdraw his balance on de-mand, it would appear that he is under no obligation to give any advance notice of his decision to close his account . . . the closing of the account does not necessarily bring the mutual obligations to an end. The customer clearly remains liable for any overdraft, and the banker for properly conducting any operation needed in con-nection with the closure . . .”

It is therefore open to the customer to give an oral instruc-tion to have his account closed at once although he would not be able to take out whatever remains as credit therein until a proper settlement of obligations on both sides is car-ried out. But the banker is entitled to act on the notice with-out delay.

It is when the banker who decided to have the account of the customer closed that he must give the customer reason-able notice in case there are outstanding cheques to be cleared or some business the customer intends to conclude through the bank account. See Joachimson v Swiss Bank Corpn. (1921) 3 KB 110 at page 127 where Lord Atkin LJ said “it is a term of the contract that the bank will not cease to do business with the customer except upon reasonable no-tice”. This is obviously, as has been said, when it is the banker who initiates the ceasing of doing business with the customer; in other words, wants to close the account of the customer. (See also Prosperity Ltd v Lloyds Bank Ltd (1923) 39 TLR 372.) The customer must therefore be given time by the banker to make such arrangements as are necessary to


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protect his credit and credibility (see Buchingham and Co v London and Midland Bank (1895) 12 TLR 70).

It may be convenient to consider Issues (2) and (3) to-gether. It has been held however that when a customer gives notice to have his account closed, he may revoke that notice before the banker acts on it because as said by Romer, LJ in Rekstin v Severo Sibirsko and The Bank for Russian Trade (1933) 1 KB 47 at 71–72, such notice “operated as no more than a revocable mandate to the bank, so that until it was acted upon, it was open to the customer to revoke it”. In the present case the notice to close the account was given by the second appellant on 23 July, 1984. That notice was not re-voked – at least not to the knowledge of the respondents even if it can be said that the appellants had the intention to do so by issuing a cheque on 30 July, 1984 and on 2 August, 1984 the respondents acted on it. The cheque issued by the appellants on 30 July did not come through till 8 August to the first respondent bank from the clearing house, which is the Central Bank of Nigeria.

The relationship of banker and customer depends basically on the ordinary principles of contract and it could, at least in theory be brought to an end in any of the ways a contract may be determined. But in practice it could more properly be terminated by mutual agreement, by notice given by the customer or by the banker, by the death of the customer, by the mental disorder of the customer, and by bankruptcy or winding up of either party (see Law of Banking (supra) at page 349). In the present case it was terminated by the no-tice given by the second appellant (a customer). Therefore as at the date (8 August, 1984) when the appellants’ cheque in question reached the respondents, the relationship of banker and customer had come to an end and the respon-dents were justified in not paying the said cheque (see Berry v Halifax Commercial Banking Co (1901) 1 Ch. 188). The respondents owed the appellants no further obligation, and had no cause, to refrain from endorsing the said cheque the way they did, namely, “Drawer’s attention required”. That was one way they could secure the appellants’ attention and if need be warn them to issue no more cheques on that


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closed account because they would not be honoured. Of course, the respondents might well have endorsed the cheque. “Account closed” or No account” to finally bring it home to the appellants that they cannot make any unwar-ranted use of that account (see leading cases in the Law of Banking by Chorley and Smart (4ed) page 304.)

The court below was right in allowing the appeal against the judgment of the trial court and setting it aside as well as dismissing the claim. In the circumstances, I find that this appeal is totally lacking in merit and I accordingly dismiss it. I make no order for costs as the respondents did not in any way participate in defending this appeal. KARIBI-WHYTE JSC: I had the opportunity of reading the leading judgment of my learned brother, S.O. Uwaifo, JSC in this appeal. I agree entirely with the decision.

The appeal is completely lacking in merits. I make no or-der as to costs. The appeal was heard on the brief of the ap-pellants. respondents did not file any brief of argument. Nei-ther Counsel nor the parties were present during the hearing of the Appeal. KUTIGI JSC: I read in advance the judgment just rendered by my learned brother, Uwaifo, JSC. I agree with his reason-ing and conclusion. The appeal lacks merit. It is accordingly dismissed with no order as to costs. ONU JSC: I have had the advantage of a preview of the judgment of my learned brother Uwaifo, JSC just delivered. I am in entire agreement with him that the appeal lacks merit and must therefore fail.

I too dismiss the appeal and make similar consequential orders inclusive of those as to costs contained in the leading judgment. KALGO JSC: I have had the privilege of reading in draft the judgment just delivered by my learned brother, Uwaifo, JSC in this appeal. I entirely agree with his reasoning and con-clusions reached therein.

The learned trial Judge was clearly wrong in the assess-ment of the evidence before him as regards the closing of


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the appellant’s account and its effect on the payment of the cheque exhibit A which was only declared for payment on 9 August, 1994, when the respondent’s account was closed on 2 August, 1994.

There was therefore no ground upon which the award of damages for libel of the sum of N25,000 or any amount at all could be supported in favour of the respondents. The Court of Appeal was therefore right in my view, in allowing the appeal before it and reversing the decision of the learned trial judge as it did.

In the circumstances, I also agree that there is no merit at all in this appeal. I accordingly dismiss it and abide by the orders made in the lead judgment as to costs. Appeal dismissed.


United Bank for Africa Plc v. Modupe Daniel 705

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United Bank for Africa Plc v Modupe Daniel

HIGH COURT, LAGOS STATE

ADEFOPE-OKOGIE J

Date of Judgment: 15 JULY, 1999 Suit No.: ID/308/98

Banking – Interest on loan – Power of bank to charge – Sec-tion 15 Banking Act Cap 28 Laws of the Federation of Nige-ria, 1990

Banking – Statement of account rejected in evidence – When bank can still succeed in its claim

Evidence – Admission – Upon which to base judgment – To be specific

Facts

The plaintiff’s claim against the defendant is for the sum of N297,732.01 being overdraft and loan facilities granted to the defendant. The plaintiff also claimed interest at 21% per annum from 29 December, 1997 until liquidation of the en-tire debt. The defendant denied liability and filed Statement of Defence which while admitting that overdraft and loan facilities were granted to her between June, 1988 and De-cember, 1988 totalling N65,000 claimed that she had paid back the total sum of N47,585.16 leaving a balance of N17,414.84, exclusive of interest. The plaintiff called one witness in proof of it’s case while the defendant rested her case on that of the plaintiff.

The plaintiff’s Counsel submitted that the evidence of the plaintiff was not challenged or rebutted and that based on the admission of the defendant, the plaintiff was entitled to judgment.

The defendant’s Counsel however argued that there was no dispute as to the loan of N65,000 but the rejection by the court of the statement of account, the plaintiff had failed to discharge the burden of proof of the indebtedness.



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Exhibit P5 from the defendant to the plaintiff read thus:– “Modupe Daniels and Sons

5, Ikeolu Street, Idi-Oro, Mushin.

The Manager, Debt Recovery Dept, UBA Plc, Otta. Dear Sir, C/A No. 6011017365 Balance at 26/5 – N194,036.47 O/Draft N35,000 Loan N30,000 Date granted 15 December, 1988 Mrs Modupe Daniel, I write to appeal for a waiver of the accumulated interest on my above-mentioned account. Initially, my total commitment to the Bank was N65,000 made up of Overdraft and Loan as tabulated above. After the Loan I made repayments three times totalling N41,2500 ie N26,250 – 2 September, 1992, N10,000 – 4 February, 1995 and N5,000 – 24 January, 1996 respectively. However, because of my inability to pursue payment for contracts for the Local Govern-ment as a result of accident and illness, the payment was unneces-sarily delayed and proceeds were later utilised to pay hospital bills, feeding and household expenses. I have since been incapaci-tated and without the health and means to undertake any lucrative business. I would therefore be grateful if you would allow me to pay back the principal amount of N65,000 in full and final pay-ment/settlement of the total indebtedness. While the previous payment of N41,2500 be regarded disregarded. I have even paid N335.16k dividend warrant on the 19 May, 1997. I shall be pleased if my above appeal could be considered by you, while I thank you very much in advance. Yours faithfully, (Sgd.) Mrs Modupe Daniel.”

Held – 1. Admission upon which to award judgment must be spe-

cific. It should be categorised and certain. Per curiam “The question that thus arises is whether since both parties

are in agreement as to the amount given to the defendant,



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the interest on the said amount as agreed, and the amount repaid, whether the difference in account number materially affects the admission of the defendant in exhibit P5. In my opinion I do not think so, since as I have said, the defendant neither in all the documents tendered, some written by her, and another on her behalf, the fact and terms of the loan were not denied. She had furthermore admitted her indebt-edness in the said sum of N194,036.47. It is also clear to me from the facts given in her letter exhibit P5, that the loan being claimed in this action is the same one in respect of which her letter is a plea for forbearance. Also her State-ment of Defence admitted the taking of the loan and the terms. I thus consider the admission in exhibit P5, not an admission of the sum of N297,732.11 alleged to be owing, but of the sum of N194,036.46 admitted by the defendant to be owing as at 2 July, 1997. The defendant gave no evi-dence or in any way denied exhibit P5 or sought to retract her admission. I thus consider her admission therein as es-tablished. (See Broadline Enterprises Ltd v Monterey Mari-time Corporation (1995) 9 NWLR (Part 417) page 1 (SC.)).”

2. The power of a bank to charge interest on loan, overdraft etc has become a matter of mutual consultation between a bank and its customer and this is the purport of section 15 Banking Act Laws of the Federation of Nigeria, 1990.

3. The bank has power to charge compound interest on loans or other advances even where no express agree-ment on the rate of interest to be charged, and this is be-cause a customer is taken to impliedly consent to an in-terest to be charged to his account.

4. Per curiam “On the issue of interest, the Court of Appeal in Union

Bank of Nigeria v Salami (1998) 3 NWLR (Part 543) page 538 held that the power of a bank to charge interest on loans, overdraft etc has become a matter of mutual consul-tation between a bank and its customer. This, the court said is the purport of section 15 Banking Act Laws of the Fed-eration, 1990 and as decided in Union Bank v Ozigi (1994) 3 NWLR (Part 333) 385. The case also held that the bank has power to charge compound interest on loans or other advances even where no express agreement on the rate of



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interest is charged. This the court said, is because a cus-tomer is taken to impliedly consent to an interest to be charged to his account. It is thus clear from the foregoing that the plaintiff is entitled to interest. Though the rate of 21% was claimed on the writ, no evidence was given in support of this figure.”

Finding for plaintiff in part.


Nigerian Broadline Enterprises Ltd v Monterey Maritime Corpora-tion (1995) 9 NWLR (Part 417) 1 Fasikoen II v Oluronke II (1999) 2 NWLR (Part 589) 1 National Bank of Nigeria Ltd v Guthrie Nigeria Ltd (1993) 3 NWLR (Part 284) 643 Union Bank of Nigeria Ltd v Ozigi (1994) 3 NWLR (Part 333) 385 Union Bank of Nigeria v Salami (1998) 3 NWLR (Part 543) 538

Nigerian statutes referred to in the judgment Banking Act Cap 28 Laws of the Federation of Nigeria, 1990, section 15 Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, section 136

Counsel For the plaintiff: C.R.O. Agbor For the defendant: Mrs J.T. Oyetan

Judgment ADEFOPE-OKOGIE J: The plaintiff’s claim against the de-fendant is for the sum of N297,732.01 being overdraft and loan facilities granted to the defendant. The plaintiff also claimed interest at 21% per annum from 29 December, 1997 until liquidation of the entire debt. The defendant denied


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liability and filed Statement of Defence which while admit-ting that overdraft and loan facilities were granted to her be-tween June, 1988 and December, 1988 totalling N65,000 claimed that she had paid back the total sum of N47,585.16 leaving a balance of N17,414.84, exclusive of interest. The plaintiff called one witness in proof of its case while the de-fendant rested her case on that of the plaintiff. The evidence of the plaintiff’s witness, Mrs Oluwatoyin Araromi, an offi-cer in the plaintiff Bank is that the defendant between June, 1988 and December, 1988 was granted overdraft facilities totalling N65,000 at 15.76% per annum. The defendant, af-ter collection of the said facilities promised to domiciliate the proceeds of her business through the account and to bring her title documents. She however failed to repay the loan on its maturity. The witness tendered letters from them to the defendant and also letter from the defendant to the plaintiff. She testified that if one doesn’t fully liquidate the balance on the account the debit balance continues to attract interest. The balance on the principal, she said is N17,750 excluding interest.

In the plaintiff’s submissions in final address, Mr Agbor, learned Counsel to the plaintiff submitted that the evidence of the plaintiff was not challenged or rebutted. Referring to exhibit P1 and P2 he submitted that there is undisputed evi-dence of the loan. defendant did not deny these averments in her Statement of Defence. Notwithstanding the rejection by this Court of the Statement of Account, the plaintiff, Coun-sel submitted, is entitled to judgment as the defendant gave no evidence. He cited Ogundipe v Attorney-General of Kwara (1993) 8 NWLR (Part 313) 558 at 567–568; IBWA v Ogwuma (1986) 2 C.A.R. (Part 1) 146 and ACB v Egbunike (1988) 4 NWLR (Part 88) 350 at 366. Counsel further sub-mitted that averment in pleadings, once admitted needs no further proof. Not only were there admissions, the averments were also proved by evidence. He cited Union Bank v Nnoli (1990) 4 NWLR (Part 145) 530 at 545. Having agreed that she was granted overdraft facilities, she is estopped from denying the same, he argued. It was Counsel’s further


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submission that evidence that Statement of Account were given regularly were not challenged.

Citing NGSC v Nigeria Port Authority (1990) 1 NWLR (Part 129) 741 at 748 he submitted that when money ought to have been paid some time ago the court can enforce an award of interest on the principle that the defendant has kept the plaintiff out of his funds. He considered as having been abandoned the averment of the defendant in paragraph 3 of the account referred to. He cited Leventis Technical v Petro Jessica Ltd (1992) 2 NWLR (Part 224) 459 at 467 Ratio 2. Also Elias v Omobare (1982) 5 SC. 25 at 46, as no evidence was given in support of the Statement of Defence. The plaintiff, he argued, is vindicated by letter written by the de-fendant in which account numbers were conspicuously writ-ten.

Referring to paragraph 4 of the statement of defence the contention that she made a certain payment can’t avail her as the amount allegedly paid was paid between 1992 and 1999 while interest continued to run. The facilities became payable in June, 1986 and April, 1987. In view of the defendant’s failure to testify her veracity could not be tested. She thus cannot reap a benefit from her wrongful act and should not be allowed to dribble and frustrate the plaintiff by delay tactics. He cited NAL Merchant Bank v Macaulay (1986) 5 NWLR (Part 40) 216 at 223 and AP v Owodunni (1990) 8 NWLR (Part 210) 391 at 421. Mr Okunuga in reply submitted that the gravamen of the plaintiff’s case is paragraph 549 of the Statement of Claim. He conceded that there was no dispute concerning the loan of N65,000. The plaintiff had claimed that by 29 December, 1997 the balance outstanding was N297,732.01. By the rejection of the statement of account the plaintiff had failed to discharge the burden of proof of the in-debtedness. He cited section 136 of the Evidence Act and Ye-sufu v ACB (1976) 1 ANLR (Part 1) 325 at 338.

He pointed out that paragraph 4 of the statement of de-fence pleaded the amount repaid, confirmed by plaintiff’s witness who also confirmed that the defendant had never admitted owing the plaintiff the amount in question. In view


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of their refusal to accede to the proposal of the defendant made in exhibit P10 it is too late for the plaintiff to fall back thereon. He urged the court to give judgment in favour of the plaintiff in the sum of N17,414.84 with interest at 4% per annum as stated in the Judgment Enforcement Act, 1838, a statute of General Application. Mr Agbor in response submitted that the plaintiff was still entitled to judgment even in the absence of a Statement of Account. He cited the case of IBWA v Ogunma (supra) with regard to the interest rate agreed by the parties. The interest rate regulated by CBN. The court he said, is not to make case for the parties. From the state of pleadings both parties are in agreement that between June, 1988 and December, 1988 the plaintiff granted to the defendant overdraft and loan facilities total-ling N65,000 at interest rates varying between 15% and 16.5%.

It was also admitted by PW1 in evidence that the defen-dant had made a total repayment of N47,250 leaving a bal-ance of N17,750 as the principal. The defendant had how-ever denied that she is indebted to the plaintiff in the sum of N297,732.01.

The plaintiff has tendered in proof exhibit P5, a letter from the defendant to them dated 2 July, 1997 appealing for a waiver of the accumulated interest on the above mentioned account. “She itemised in the letter, payments made by her and explained that because of her inability to pursue pay-ment for Contracts for the Local Government as a result of accident and illness, the payment was unnecessarily delayed and proceeds were later utilised to pay hospital bills, feeding and household expense”. She requested to pay the principal sum of N65,000 in full and final satisfaction of the sum ow-ing. The letter was headed:–

“C/A No. 6011017365 Balance at 26 May, 1997 – N194,036.47 Overdraft N35,000 Loan N30,000 date granted 15 December, 1988 Mrs Modupe Daniel.”


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Relied also as an admission by the plaintiff is the letter from the defendant’s Counsel to the plaintiff’s Counsel, exhibit P10 referring to the “claim of N267,811.83 alleged to be owed to UBA Plc”. In the said letter, Counsel reminded the plaintiff’s Counsel that his client had paid a total sum of N41,250 between 1992 and 1996 out of an overdraft and loan facility of N65,000 leaving a balance of N23,750 ex-cluding interest. Defence Counsel, while acknowledging that the plaintiff’s are entitled to charge interest on the facil-ity was of the view that “the interest of over N200,000 is on the high side”. They asked to be allowed to pay an addi-tional sum of N58,750 to bring the total payments to a “round figure of N100,000”. Admissions upon which to award judgment was qualified by the Supreme Court in the case of National Bank of Nigeria Ltd v Guthrie Nigeria Ltd (1993) 3 NWLR (Part 284) 643 to be “specific admission”. The court also held that the admission should be categorical and certain. In the present case, while there is no doubt about the amount of the loan taken and the amount repaid, the contention is as to the interest charged thereon.

Neither exhibit P10 from the defendant’s lawyer or exhibit P5 from the defendant herself, have specifically admitted liability of the amount of N297,732.01 claimed. The plea by the Defence Counsel in exhibit P5 for a reduction in the in-terest alleged which, while undoubtedly acknowledges the defendant’s indebtedness, falls short of the certainty re-quired of an admission. The heading of the letter “Re claim of N267,811.83 alleged to be owed to UBA Plc”, is not, in my opinion, an admission of the indebtedness of the said sum. Also the statement is by Counsel in the letter that “while we acknowledge that your client is entitled to charge interest on the entire facilities, we are clearly of the view that the interest of over N200,000 is on the high side. We have our client’s instructions to request for a waiver of the interest . . .” also, in my view, falls short of the certainty re-quired to qualify as an admission. Unfortunately, exhibit P3, the Statement of Account from the plaintiff which verifies


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the debt was rejected by the court as the necessary founda-tion was not laid prior to the application for its reception. Exhibit P5 from the defendant to the plaintiff however states:–

“Modupe Daniels and Sons 5, Ikeolu Street, Idi-Oro, Mushin.

The Manager, Debt Recovery Dept, UBA Plc, Otta. Dear Sir, C/A No. 6011017365 Balance at 26 May, 1997 – N194,036.47 Overdraf N35,000 Loan N30,000 date granted 15 December, 1988 Mrs Modupe Daniel, I write to appeal for a waiver of the accumulated interest on my above-mentioned account. Initially, my total commitment to the Bank was N65,000 made up of Overdraft and Loan as tabulated above. After the loan I made repayments three times totalling N41,2500 ie N26,250 – 2 September, 1992, N10,000 – 4 February, 1995 and N5,000 – 24 January, 1996 respectively. However because of my inability to pursue payment for contracts for the Local Govern-ment as a result of accident and illness, the payment was unneces-sarily delayed and proceeds were later utilised to pay hospital bills, feeding and household expenses. I have since been incapacitated and without the health and means to undertake any lucrative busi-ness. I would therefore be grateful if you would allow me to pay back the principal amount of N65,000 in full and final pay-ment/Settlement of the total indebtedness. While the previous payment of N41,2500 be regarded disregarded. I have even paid N335.16k dividend warrant on the 19 May, 1997. I shall be pleased if my above appeal could be considered by you, while I thank you very much in advance. Yours faithfully, (Sgd.) Mrs Modupe Daniel.”

The heading “C/A No. 6011017365 Balance at 26 May, 1997 N194,036.47” taken together with the contents of this


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letter amount however, in my opinion, to an admission that as at 26 May, 1997 (which I assume to be 26 May, 1997 since the letter is dated 2 July, 1997), the sum of N194,036.47 is owing to the defendant. The defendant has however in her statement of defence paragraph 3 stated that “Contrary to paragraph 3 of the statement of claim, the de-fendant maintains that she operated Account No. 601-077365 with the plaintiff’s Otta Branch”. This averment was made in response to the plaintiff paragraph 3 that: “At all times material to this suit, the defendant operated ac-count No. 201-01736-8 with the plaintiff’s Otta Branch”.

The implication of this denial being that the amount owed on Account No. 201-01736-8 was not incurred by her. Coun-sel to the plaintiff had regarded the denial as not amounting to a denial, citing some authorities in respect of his submis-sions. The explanation of the plaintiff witness that the Ac-count No. 20107368 was later changed to 60107365 was ob-jected to by the Defence Counsel on the ground that there is no pleading of a change of account by the plaintiff in addition to the fact that the account number of the defendant pleaded by the plaintiff had been denied by one defendant. The court, in consequence, expunged from the record of the court that evidence the same not having been pleaded. The ques-tion that thus arises is whether since both parties are in agreement as to the amount given to the defendant, the interest on the said amount as agreed, and the amount repaid, whether the difference in account number materially affects the admission of the defendant in exhibit P5. In my opinion I do not think so, since as I have said, the defendant neither in all the documents tendered, some written by her, and an-other on her behalf, the fact and terms of the loan were not denied. She had furthermore admitted her indebtedness in the said sum of N194,036.47. It is also clear to me from the facts given in her letter exhibit P5, that the loan being claimed in this action is the same one in respect of which her letter is a plea for forbearance. Also her statement of defence admitted the taking of the loan and the terms. I thus consider the admission in exhibit P5, not an admission of the sum of N297,732.11 alleged to be owing, but of the sum of


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N194,036.46 admitted by the defendant to be owing as at 2 July, 1997. The defendant gave no evidence or in any way denied exhibit P5 or sought to retract her admission. I thus consider her admission therein as established. (See Broad-line Enterprises Ltd v Monterey Maritime Corporation (1995) 9 NWLR (Part 417) 1 (SC.)). The law allows me to award less though not more than that which is claimed (see Fasikoen II v Oluronke II (1999) 2 NWLR (Part 589) 1 (SC.)). I accordingly hold the plaintiff entitled to judgment in the sum of N188,036.47 having deducted the sum of N6,000 which has been admitted by the parties as having been paid, and as stated by PW1, as having been paid subse-quent to exhibit P5.

On the issue of interest the Court of Appeal in Union Bank of Nigeria v Salami (1998) 3 NWLR (Part 543) 538 held that the power of a bank to charge interest on loans, overdraft, etc has become a matter of mutual consultation between a bank and its customer. This, the court said is the purport of section 15 Banking Act Cap 28 Laws of the Federation of Nigeria, 1990 and as decided in Union Bank v Ozigi (1994) 3 NWLR (Part 333) 385. The case also held that the bank has power to charge compound interest on loans or other advances even where no express agreement on the rate of interest is charged. This the court said, is because a customer is taken to impli-edly consent to an interest to be charged to his account. It is thus clear from the foregoing that the plaintiff is entitled to interest. Though the rate of 21% was claimed on the writ, no evidence was given in support of this figure.

What was pleaded in paragraph 5 of the Statement of Claim and admitted by the defendant in paragraph 1 is that the interest rate agreed on varied between 15% and 16.5%. I shall thus award the smaller rate of interest of 15% on the judgment debt to take effect from 1 February, 1999, the date the sum of N6,000 was paid. See paragraph 4 of the State-ment of Defence. I accordingly award judgment against the defendant and in favour of the plaintiff in the sum of N188,036.47 with interest of 15% with effect from 1 Febru-ary, 1999 until the day of final payment.



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Federal Republic of Nigeria v Eyo Edem Effiom and others

FEDERAL HIGH COURT, LAGOS DIVISION ABUTU J Date of Judgment: 28 JULY, 1999 Suit No.: FHC/L/FBCR/4/99

Banking – Offences – Bail – accused arraigned pursuant to the provisions of Failed Banks Decree No. 18 of 1994 (as amended) – Conditions for bail in section 26(1)(a) and (b) of the said Decree – Whether unconstitutional Constitutional Law – Bail – Conditions for bail for an ac-cused person, section 35(4) of 1999 Constitution – Nature of Constitutional Law – Bail – Conditions for bail in section 26(1)(a) and (b) Failed Banks Decree No. 18 of 1994 (as amended) – Declared null and void for inconsistency with sections 35(4)(a), (b) and 36(5) of 1999 Constitution Constitutional Law – Presumption of innocence, section 36(5) of 1999 Constitution – Implication of – Conditions for bail in section 26(1)(a) and (b) Failed Banks Decree No. 18 of 1994 (as amended) – Whether guarantees presumption of innocence in favour of accused Criminal law and procedure – Bail – Conditions for bail in section 26(1)(a) and (b) Failed Banks Decree No. 18 of 1994 (as amended) – Implication of – Whether unconstitutional Criminal law and procedure – Bail – Object of Criminal law and procedure – Presumption of innocence of accused guaranteed by Article 7(1)(b) African Charter on Human and Peoples Rights (Ratification and Enforcement) Act Cap 10 Laws of the Federation of Nigeria, 1990 – Whether breached by conditions for bail in section 26(1)(a) and (b) Failed Banks Decree No. 18 of 1994 (as amended) Facts The second and seventh accused persons with ten other ac-cused persons were on 27 April, 1998 charged before the


Federal Republic of Nigeria v. Eyo Edem Effiom and others 717

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Failed Banks Tribunal, Zone IV, which remanded them in prison custody where they have been since they could not satisfy the conditions for bail granted them.

Following the dissolution of the Failed Banks Tribunal, the second and seventh accused persons along with nine other accused persons were further arraigned before the Federal High Court.

The second and seventh accused filed applications before the Federal High Court seeking to be admitted to bail.

It was contended on behalf of the accused persons that the requirement of section 26 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) by Decree No. 62 of 1999 for the de-posit of one-quarter of the amount of money involved in the offence as a condition for bail is inconsistent with the provi-sions of sections 35, 36 and 46 of the 1999 Constitution and therefore void. It was further contended that the deposit of a quarter of the sum involved in the offence as a condition for bail is contrary to the presumption of innocence enshrined in section 36(5) of the 1999 Constitution and repugnant to Ar-ticles 6 and 7 of the African Charter on Human and Peoples Rights (Ratification and Enforcement) Act, 1990.

Section 26 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) reads:– “26(1) The Court shall have power to grant bail to an accused

person charged with an offence under this Decree or any other law triable by the court upon such terms and con-ditions as the court may deem fit including:–

a. the payment of a deposit of one quarter of the amount of money involved in the offence;

b. the provision of a surety or such number of sureties who shall deposit adequate security for the balance of the amount involved in the offence;

c. the handing over of his passport to the court for the duration of the bail.

2. Notwithstanding the provisions of subsection (1) of this section the police shall, before any person is charged be-fore the court for an offence under this Decree, have



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power to grant bail to any person who is arrested or de-tained upon such terms and conditions as are reasonably necessary to ensure compliance with the provisions of subsection (1)(a)–(c) of this section.”

Section 35(4)(a) and (b) 1999 Constitution reads:– “Section 35(4) Any person who is arrested or detained in accor-

dance with subsection (1)(c) of this section shall be brought before a court of law within a reason-able time, if he is not tried within a period of:–

(a) two months from the date of his arrest or detention in the case of a person who is in custody or is not entitled to bail; or

(b) three months from the date of his arrest or detention in the case of a person who has been released on bail he shall (without prejudice to any further proceedings that may be brought against him) be released ei-ther unconditionally or upon such condi-tions as are reasonably necessary to ensure that he appears for trial at a later date.”

Article 7(1)(b) African Charter on Human and Peoples Rights (Ratification and Enforcement) Act Cap 10 Laws of the Federation of Nigeria, 1990 reads:– “1 Every individual shall have the right to have his cause

heard. This comprises:– a. . . . b. the right to be presumed innocent until proved guilty

by a competent court or tribunal.”

Held – 1. The object of bail as highlighted in section 35(4)(a) and

(b) of the 1999 Constitution is essentially to secure the attendance of an accused for trial at a later date; thus any condition which is not in furtherance of this object is patently inconsistent with the provisions of the stated section of the Constitution.

In the instant case the conditions set out in section 26(1)(a) and (b) of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 certainly are not reasonably necessary to ensure that the second and seventh accused persons appear to face their trial at a later date.



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2. The implication of the conditions set out in section 26(1)(a) and (b) of the Failed Banks Decree No. 18 of 1994 (as amended) by Decree No. 62 of 1999 is that an accused is presumed guilty until he proves his innocence. This offends the constitutional presumption of innocence enshrined in section 36(5) of the 1999 Constitution.

Per curiam “The implication of the two conditions is that the accused is

presumed guilty until he proves his innocence. The sum de-posited is to be returned to him when he proves his inno-cence. I think the constitutional presumption of innocence enshrined under section 36(5) of the 1999 Constitution can be invoked in this case to invalidate the provisions of sec-tion 26(1)(a) and (b) of Decree No. 18 of 1994 (as amended) by Decree No. 62 of 1999.”

3. The provisions of section 26(1)(a) and (b) of the Failed Banks Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 are declared null and void for their inconsis-tency with the provisions of sections 35(4)(a), (b) and 36(5) of the 1999 Constitution

4. The two conditions for bail in section 26(1)(a) and (b) Failed Banks Decree No. 18 of 1994 as amended by De-cree No. 62 of 1999 constitute an abridgement of the right guaranteed an accused in Article 7(1)(b) of the Af-rican Charter on Human and Peoples Rights (Ratifica-tion and Enforcement) Act Cap 10 Laws of the Federa-tion of Nigeria, 1990.

Bail granted.


Nigerian Adesokan v Adetunji (1994) 5 NWLR (Part 346) 540 Clement v Iwuanyanwu (1989) 3 NWLR (Part 107) 39 Comptroller, Nigeria Prisons Service v Adekanye Appeal No. CA/L/27/99 (Unreported) Eyu v The State (1988) 2 NWLR (Part 78) 602 Fawehinmi v Abacha (1996) 9 NWLR (Part 475) 710



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Foreign Stack v Boyle 342 U.S. 1 (1951)

Nigerian statutes referred to in the judgment African Charter on Human and Peoples’ Rights (Ratifica-tion and Enforcement) Act Cap 10 Laws of the Federation of Nigeria, 1990, Article 7(1)(b) Constitution of Federal Republic of Nigeria, 1999, sections 35(4)(a), 35(4)(b), 36(5) Failed Banks (Recovery of Debts) and Financial Malprac-tices in Banks Decree No. 18 of 1994 (as amended), section 26(1)(a), (b) Counsel For the state: Mrs O.O. Ojelabi (holding brief for A.I. Idigbe, Esq. with her N.C. Njoku, Esq.) For the first – eleventh accused: Frank Umesie, Esq. (with him Mrs V.C. Obiaroyi) For the second accused: Taiwo Osipitan, Esq. (with him Oyelowo Oyewo, Esq.) For the seventh accused: Adedotun Adetunji, Esq.

Judgment ABUTU J: There are seven counts charge against the second accused person in this case and there is just one count charge against the seventh accused person. They have both been arraigned before this Court along with nine other ac-cused persons in Charge No. FHC/L/FBCR/4/99 dated 2 April, 1998. Earlier on, the second and seventh accused persons along with other ten accused persons were on the 27 April, 1998 charged before the Failed Banks Tribunal Zone IV which upon the arraignment of the accused persons remanded them in prison custody. On the 14 December, 1998 the Failed Banks Tribunal granted the accused persons bail on conditions which the second and seventh accused persons could not satisfy. The second and seventh accused


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persons have therefore remained in prison custody since the date of their arraignment before the Tribunal.

The second accused person by a motion on Notice dated 22 July, 1999 brought pursuant to the inherent jurisdiction of the court, sections 6(6), 35, 36 and 46 of the 1999 Constitu-tion, sections 118(1) and 123 of the Criminal Procedure Act, 1990 and Articles 6 and 7 of the African Charter on Human and Peoples Rights (Ratification and Enforcement) Act, 1990 has sought for an order admitting him to bail on such liberal terms as the court may deem fit pending the hearing and determination of the case.

The motion is supported by an affidavit of 23 paragraphs to which six documents were annexed as exhibits WO1 – WO6. No counter-affidavit was filed in opposition to the motion.

The seventh accused person also by a motion on notice dated 23 July, 1999 brought under the inherent jurisdiction of the court is seeking for an order admitting him to bail on such liberal terms as the court may deem fit pending the hearing and determination of the case.

The motion is supported by an affidavit of 14 paragraphs. No counter-affidavit was filed in opposition to the motion.

In arguing the motion dated 22 July, 1999 brought by the second accused person the learned Counsel for the second accused person placed reliance on the affidavit in support. Learned Counsel submitted that by virtue of the provisions of sections 35, 36 and 46 of the 1999 Constitution and Arti-cles 6 and 7 of the African Charter on Human and Peoples Rights (Ratification and Enforcement) Act, 1990 the second accused person is entitled to be admitted to bail. He con-tended that the requirement of section 26 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 for the deposit of one-quarter of the amount of money involved in the offence as a condition for bail is in-consistent with the provisions of sections 35, 36 and 46 of the 1999 Constitution. He contended that the provisions of


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section 26 of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 being an existing law within the purview of section 315 of the 1999 Constitution is for its inconsistency with the provisions of sections 35, 36 and 46 of the 1999 Constitution null and void. He cited section 1(2) of the 1999 Constitution and Comptroller of the Nigerian Prison Ser-vices and others v Adekanye and others (Unreported) Ap-peal No. CA/L/27/99 delivered on 15 June, 1999 in support of his contention.

It is the learned Counsel’s further submission that the re-quirement for the deposit of a quarter of the sum involved in the offence as a condition for bail is contrary to the presump-tion of innocence enshrined in section 36(5) of the 1999 Con-stitution. He cited Eyu v The State (1988) 2 NWLR (Part 78) 602 at 612 in support of his submission. The provision of sec-tion 26 of Decree No. 18 of 1994 (as amended) by Decree No. 62 of 1999, he contended, is repugnant to Articles 6 and 7 of the African Charter on Human and Peoples Rights (Ratifica-tion and Enforcement) Act, 1990. He urged the court relying on Fawehinmi v Abacha (1996) 9 NWLR (Part 475) 710 at 716–717 to declare the provision of section 26 of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 invalid.

Learned Counsel then drew the attention of the court to the affidavit evidence which shows that the second accused per-son has been in detention for upwards of 1½ years and that the amount involved in the seven count charge against the second defendant is N38,361,577; a quarter of which is about N9 Million. He then urged that bail be granted to the second accused person on liberal terms.

The learned Counsel for the seventh accused person in moving the motion dated 23 July, 1999 placed reliance on the affidavit in support. He adopted the submissions of the learned Counsel for the second accused person. He submit-ted that the provisions of sections 35, 36 and 46 of the 1999 Constitution supersede the provision of section 26 of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999. He drew the attention of the court to Count 8 of the charge wherein the seventh accused person is mentioned. He


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argued that bail be granted to the seventh accused person on liberal terms.

The learned Counsel for the complainant did not oppose the two motions. She submitted that the provision of section 26 of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 is not inconsistent with the provision of sections 35, 36 and 46 of the 1999 Constitution. She urged that bail be granted on the conditions set out in section 26 of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999.

The two applications for bail have not been opposed. The point of divergence as between the learned Counsel for the complainant is the issue of the conditions of bail. Section 26 of the Failed Banks (Recovery of Debts) and Financial Mal-practices in Banks Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 provides with regard to the condi-tions for bail thus:– “Section 26(1) The Court shall have power to grant bail to an

accused person charged with an offence under this Decree or any other law triable by the court upon such terms and conditions as the court may deem fit including:–

a. the payment of a deposit of one quarter of the amount of money involved in the offence;

b. the provision of a surety or such number of sureties who shall deposit adequate security for the balance of the amount involved in the offence;

c. the handing over of his passport to the court for the duration of the bail.

(2) Notwithstanding the provisions of subsection (1) of this section the police shall, before any person is charged before the court for an offence under this Decree, have power to grant bail to any per-son who is arrested or detained upon such terms and conditions as are reasonably necessary to ensure compliance with the provisions of subsec-tion (1)(a) – (c) of this section.”

I think it is important in this application to consider the ob-ject or purpose of bail pending trial so as to ascertain whether or not all or any of the conditions set out in section


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26 of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 are necessary and are in furtherance of the object of bail. The object of bail is essentially to secure the atten-dance of the accused for trial at a later date. This is made explicit in section 35(4)(a) of the 1999 Constitution which is in the following terms:– “Section 35(4) Any person who is arrested or detained in accor-

dance with subsection (1)(c) of this section shall be brought before a court of law within a reason-able time, if he is not tried within a period of:–

(a) two months from the date of his arrest or detention in the case of a person who is in custody or is not entitled to bail; or

(b) three months from the date of his arrest or detention in the case of a person who has been released on bail he shall (without prejudice to any further proceedings that may be brought against him) be released ei-ther unconditionally or upon such condi-tions as are reasonably necessary to ensure that he appears for trial at a later date.”

A cursory perusal of the provision of section 35(4)(a) and (b) above set out reveals that the conditions that can be im-posed upon the grant of an application for bail pending trial are the conditions which are reasonably necessary to ensure that the accused person appears for trial at a later date. Any condition which is not in furtherance of this object is pat-ently inconsistent with the provisions of section 35(4)(a) and (b) of the 1999 Constitution. The crucial question there-fore is:– Are the conditions set out in section 26(1) of De-cree No. 18 of 1994 (as amended) by Decree No. 62 of 1999 reasonably necessary to ensure that the second and seventh applicants in this case appear for trial at a later date.

In Eyu v The State (supra) the Court of Appeal per G.A. Oguntade, JCA, put it at pages 612–613 with regard to a condition for bail similar to the condition in section 26(1)(a) of Decree No. 18 of 1994 (as amended) by Decree No. 62 of 1999 thus:–

“Since there is a presumption of innocence in favour of an accused it seems to me odd and oppressive that the appellant in this case


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had been called upon to deposit a sum of N400,000 as a condition for bail. It is not possible. She may at the end of the day be found not guilty of the offence. Why ask her, then, to deposit the very sum she was alleged to have received under false pretence. If the sole purpose of granting bail is to enable an accused person come back to face trial, I do not see that it is necessary to introduce a test of pecuniosity to attain that end. For even an accused person who is able to deposit N400,000 may still jump bail. Section 120 of the Criminal Procedure Act has laid it down that the amount of bail shall not be excessive.”

Also in Comptroller, Nigeria Prisons Service and 2 others v Dr Femi Adekanye and 26 others (Unreported) Appeal No. CA/L/27/99 determined on the 15 June, 1999, G.A. Ogun-tade, JCA who wrote the lead judgment put it at page 15 thus:–

“Overall the conditions set for bail are presumption that any one charged under the Decree is guilty of the offence. More than any-thing else it is the provisions of section 26 on bail that ensured that the respondents are kept in custody this long.”

On page 17, the learned Judge said:– “I am satisfied that section 26 of Decree No. 18 in its effect is op-pressive and totally destroys the presumption of innocence in fa-vour of an accused. It is too harsh and ensures that a person ac-cused of committing an offence under the Decree does not get bail at all. It is a bad legislation and clearly offends Article 7(1)(b) of African Charter on Human Rights Act Cap 10 Laws of the Federa-tion of Nigeria, 1990.”

On page 18, the learned Judge further said:– “From the totality of what I have said above, it is manifest that Decree No. 18 of 1994 in many respects is inconsistent with the letter and spirit of the African Charter on Human Rights. That be-ing the position, section 26 and perhaps in a constructive sense, sections 4(2) and 5(1) of the same Decree are invalid.”

Section 26 of Decree No. 18 of 1994 (as amended) by De-cree No. 62 of 1999, has thus been declared invalid. A care-ful reading of the judgment of the Court of Appal reveals that the pronouncements of G.A. Oguntade, JCA, severally reproduced above are obiter in the sense that the question whether or not section 26 of Decree No. 18 of 1994 is incon-sistent with the provisions of section 7 of the African Char-ter on Human and Peoples Rights (Ratification and


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Enforcement) Act, 1990 was not one of the questions for determination in the appeal. Under the doctrine of stare de-cisis a court lower in the judicial hierarchy is bound by the ratio decidendi of a higher court; not necessarily the obiter dictum. (See Adesokan v Adetunji (1994) 5 NWLR (Part 346) 540 at 545 and Clement v Iwuanyanwu (1989) 3 NWLR (Part 107) 39.)

Be that as it may the 1999 Constitution by the provisions of section 35(4)(a) and (b) thereof has defined the conditions which may be imposed upon the grant of an application for bail. The conditions are those reasonably necessary to ensure that the accused appears for trial at a later date. The condi-tions set out in section 26(1)(a) and (b) of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 certainly are not reasonably necessary to ensure that the second and seventh accused persons appear to face their trial at a later date. The implication of the two conditions is that the accused is pre-sumed guilty until he proves his innocence. The sum depos-ited is to be returned to him when he proves his innocence. I think the constitutional presumption of innocence enshrined under section 36(5) of the 1999 Constitution can be invoked in this case to invalidate the provisions of section 26(1)(a) and (b) of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999. In Stack v Boyle 342 U.S. 1 (1951) the Supreme Court of the United States of America put it thus:–

“Unless this right to bail before trial is preserved, the presumption of innocence secured only after centuries of struggle would lose its meaning.”

It is my firm conclusion in this case after a careful considera-tion of the provisions of section 35(4)(a) and (b) of the 1999 Constitution and section 26(1)(a) and (b) of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 that the condi-tions set out in the aforementioned paragraphs (a) and (b) of subsection 1 of section 26 of the Decree are, to the extent that they are not reasonably necessary to ensure that an accused appears for trial at a later date and for the reason that the con-ditions are contrary to the presumption of innocence en-shrined in section 36(5) of the 1999 Constitution invalid. The two conditions also constitute an abridgement of the right


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guaranteed in Article 7(1)(b) of the African Charter on Hu-man and Peoples Rights (Ratification and Enforcement) Act, 1990 which provides thus:– “1 Every individual shall have the right to have his cause

heard. This comprises:– a. . . . b. the right to be presumed innocent until proved guilty

by a competent court or tribunal.” The said provisions of paragraphs (a) and (b) of subsection (1) of section 26 of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 are hereby, for their inconsistency with the provisions of sections 35(4)(a), (b) and 36(5) of the 1999 Constitution, declared invalid, null and void.

By the provision of section 35(4) of the 1999 Constitution this Court is enjoined in this case, upon the grant of bail, to impose such conditions as are reasonably necessary to en-sure that the accused appears for trial at a later date. The two applications for bail in this case have not been opposed. It is my view that the second and seventh accused persons are entitled to be released on bail. I do therefore grant the two applications in the following terms:– 1. The second accused person is hereby granted bail in

the sum of N5 Million together with two sureties in the same amount.

2. The seventh accused person is hereby granted bail in the sum of N500,000 together with two sureties in the same amount.

3. Each of the sureties in respect of the second accused person must be resident in the Lagos metropolis and must produce evidence of ownership of landed prop-erty in the Lagos metropolis valued not below N5 Million and, in respect of the seventh accused person, must be resident in the Lagos metropolis and must produce evidence of ownership of landed property in the Lagos Metropolis valued not below N500,000.

4. The second and seventh accused persons are to hand over to the Chief Registrar of this Court before their release their passports to be kept in the custody of this Court for the duration of the bail.

[1999] 9 N.B.L.R. (FEDERAL HIGH COURT, ILORIN DIVISION)


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Trade Bank Plc v Rims Merchant Bank Ltd FEDERAL HIGH COURT, ILORIN DIVISION BELLO J Date of Judgment: 24 SEPTEMBER, 1999 Suit No.: FHC/IL/12/96

Banking – Investment in commercial papers – Investment guaranteed by credit guarantee bond – Issue of implied guarantee by a party – Relevance of

Banking – Investment in commercial paper – Section 7(1) Securities and Exchange Commission Act Cap 406 Laws of the Federation of Nigeria, 1990 – In relation thereto

Facts The plaintiff claims against the defendant as follows:– i. The sum of N3,500,000 being the sum placed by the

plaintiff with the defendant and which sum has been recalled since 12 February, 1992 but the defendant has refused to pay.

ii. Interest on the said sum of N3.5 million at the rate of 21% per annum which as at March, 1996 stood at N3,060,318.22.

iii. Interest on the total sum of N6,560,318.22 at the rate of 21% per annum from April, 1996 to the date of judgment and thereafter at the rate of 10% per annum until the judgment is finally liquidated.

The plaintiff’s case was that on 3 May, 1991, the plaintiff company placed the sum of N3.5 million in a 90 day tenure term deposit with the defendant. This was done by the plain-tiff through instruction to the Central Bank of Nigeria to credit the defendant’s Account No. 6506/0438 with the dis-counted value of N3.5 million and the Central Bank had done that in compliance with the plaintiff’s instruction. However, the witness said, at the expiration of the tenure, the defendant resorted to requesting for repeated rollover of the principal sum for subsequent extra 90 days and this was done through defendant’s letters dated 28 October, 1991


Trade Bank Plc v. Rims Merchant Bank Ltd 729

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and 10 February, 1992 respectively. These letters were ad-mitted in evidence and marked as exhibits 1 and 2.

The request contained in exhibit 2, he went on, proposed a 27% interest for the principal sum being rolled over. But the plaintiff insisted on 29% interest and made same a condition for the rollover while at the same time making it clear that it would be the last rollover it would agree to concede to the defendant. This was communicated to the defendant through plaintiff’s letter dated 14 February, 1992, which letter was now exhibit 3 before the court. Testifying further, Mr Sule said on the 19 February, 1992, the defendant wrote a letter to the plaintiff indicating that the terms of the rollover had been communicated to a third party while expressing the hope that they would be in a position to forward their cheque for the plaintiff’s upfront-interest. This development dis-pleased the plaintiff, who subsequently wrote a letter to the defendant on the same 19 February, 1992 calling in the placement with the accrued interest. Both letters exchanged by the parties were exhibits 4 and 5 respectively.

Expatiating on this, the PWl informed the court that when a facility on placement was called in, it was expected that the defendant should pay up immediately. But the expecta-tion was not realised as the defendant did not pay up, to the effect that two years later on the 3 March, 1994, the plaintiff had to write to the defendant a final recall letter. This letter was now exhibit 6 before the court. And despite these let-ters, the defendant did not redress their obligation to the plaintiff. So, on 25 April, 1994, according to the witness, the plaintiff reported the defendant formally to Central Bank of Nigeria through a letter dated 25 April, 1994; consequent upon which the Central Bank of Nigeria in turn wrote a let-ter to the defendant. These letters formed exhibits 7 and 8 respectively. The intervention by the Central Bank of Nige-ria did not precipitate the redemption by the defendant of its obligation, necessitating the plaintiff to refer the case to its Solicitor, Messers Bayo Ojo and Co who wrote a letter to the defendant dated 21 September, 1995, calling on the



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defendant to pay up or face litigation. The letter was exhib-ited and marked exhibit 9.

In continuation of his evidence the witness stated that the defendant in this case was directly liable because the plain-tiff credited the defendant’s account with the Central Bank of Nigeria and with that, it had the liberty of investing the sum so credited in whichever way it thought was more prof-itable for it. The plaintiff he said further, did not have any direct dealings with either Fasig Associates Nigeria Ltd or Keffi Properties Nigeria Ltd as the facility was granted on the perceived credibility of the defendant, Rims Merchant Bank and as such there was no way in which the plaintiff had knowledge nor consideration about other parties being mentioned by the defendant. The witness denied in his evi-dence that the plaintiff received any amount from Niger In-surance Company and that since it had no contractual rela-tionship with the Insurance Company, it could not have is-sued any authority or directive for that Company to be sued.

The defendant’s case was that the plaintiff as well as the defendant and two other Banks invested in a commercial pa-per of Fasig Nigeria Limited and that in the transaction the defendant acted as the issuing house and the investment was secured by a credit bond of a consortium of insurance com-panies led by Niger Insurance Plc. As the issuing house, the defendant invited the other Banks to invest in the commercial paper. That Fasig Associates failed to pay up whereupon, Ni-ger Insurance Plc as the insurers eventually paid N2 million which was used to reduce the indebtedness. That the said sum of N2 million was shared amongst the investors with the payment of N700,000 going to the plaintiff. That upon failure of Fasig Associates to pay, a joint meeting of all investors in the commercial paper including the plaintiff agreed that Fasig Associates and Niger Insurance be sued at the High Court of Lagos State for the recovery of the invested sum.

It was contended on behalf of the defendant that:– 1. The plaintiff ought to have taken out this action

against Fasig Associates Limited and not the defen-dant.



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2. That this action is an abuse of process since plaintiff had earlier agreed with other investors that an action be taken out against Fasig Associates and Niger In-surance for the recovery of the sum involved and the action had been taken out.

It was contended on behalf of the plaintiff that:– 1. The transaction in this case was simply investment

of money by the plaintiff with the defendant for in-terest and not an investment with Fasig Associates Limited.

2. That the approval of the Securities and Exchange Commission for the issue ought to have been ob-tained as required by section 7(1) of the Securities and Exchange Commission Act Cap 406 Laws of the Federation of Nigeria, 1990.

Held – 1. What appeared ex facie as a simple 90 days term deposit

of N3.5 million at 21% per annum purportedly placed with the defendant is in fact an investment in Fasig As-sociates Commercial Papers and having regard to the evidence before the Court, the plaintiff was well aware of these facts.

Per curiam “The response of the plaintiff in exhibit 17 reads after the

address. Dear Sir, Re: Fasig Associates (Nigeria) Limited Recovery of Outstanding Indebtedness We refer to your letter dated July 13, 1994 in respect of

the meeting recently held at your office on the above subject matter.

We are agreeable with the four points action, as con-tained in your letter, to recover the amounts due from the company but we want to observe on a very sad note that Rims Merchant Bank Limited ought to have acted pro-fessionally along these lines long time ago without prompting from any of the lenders. That we are still con-templating these actions at this point in time confirm



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that you have not acted fairly in the interest of all parties especially the lenders.

We hope that these actions will be set in motion to ensure that the issue is put behind us as quickly as possible.

Thank you. Yours faithfully, Trade Bank Plc Suddenly in one fell swoop in this document, the plaintiff has

made nonsense of all it’s assertion and submissions of it’s Counsel that, the plaintiff has no business with the suit at the Lagos High Court and the distancing of itself from the Credit Bond and above all admitted that they are one of the lenders to Fasig Associates Limited, the company as it called it and not the defendant by endorsing the four points action plan. This evidence is at variance with the plaintiff’s pleadings. This being the case, do I need any further proof to hold that the defendant in this case acted in an intermediary capacity or as agent in the commercial paper transaction between the plaintiff and Fasig Associates Nigeria Limited? I think not. But even if further evidence is needed it is supplied by exhibit 13 the schedule of interest attached to exhibit 12 a letter sent to the defendant by the plaintiff. In this document the name of Fasig Associates Nigeria Limited c/o Rims Merchant Bank Lagos was written and it contained the principal amount the subject of the investment ie N3.5 million plus all the entries of interest payable amounting to N3,748,318.22 minus N700,000 paid by Niger Insurance reducing the principal sum to N2,800,000 all these entries are made in the name of Fasig Associates Nigeria Limited care of Rims Merchant Bank. Thus confirming pleading of the defendant that it acted as an issuing House for Fasig Associates.

So from the events preceding the placement of the N3.5 million as unfolded by the evidence adduced as a whole to the instruction to Central Bank of Nigeria in exhibit 21 and the subsequent events as high lighted in the correspon-dences, between the parties herein I am left in no doubt that the true nature of the transaction giving rise to this suit is that the plaintiff as well as the defendant including two other Banks to wit:

Gateway Bank Limited and North South Bank (Nigeria) Ltd (see exhibit 18) contributed funds and invested in Fasig Associates Nigeria Limited Commercial Papers which in-vestment was secured by a Credit Bond as mentioned supra as exhibit 15 and this I so find.”



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2. Section 7(1) Securities and Exchange Commission Act Cap 406 Laws of the Federation of Nigeria, 1990 has no relevance to investment in commercial papers. Even if it is relevant, it does not apply to the situation herein since there is no evidence that aliens are involved in the enter-prises concerned in this case.

3. Since the investment herein is well secured by the credit guarantee bond, the issue of implied guarantee by the de-fendant does not arise.

4. The defendant, as an agent of a disclosed principal can-not as a matter of law be sued to answer for the default of the principal except in certain exceptions not applica-ble in this case.


Nigerian Inlaks v Polish Ocean Lines (1988) F.H.C.L.R. 56

Nigerian statute referred to in the judgment Securities and Exchange Commission Act Cap 406 Laws of the Federation of Nigeria, 1990, section 7(1)

Counsel For the plaintiff: Mr Toyin Oladipo, Esq. For the defendant: S.R. Ashaolu, Esq. (holding the brief of Bayo Eniwaye)

Judgment BELLO J: From the writ of summons as well as paragraph 14 of its statement of claim, the plaintiff’s claims against the defendant are as follows:– i. The sum of N3,500,000 being the sum placed by the

plaintiff with the defendant and which sum has been recalled since 12 February, 1992 but the defendant has refused to pay.


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ii. Interest on the said sum of N3.5 million at the rate of 21% per annum which as at March, 1996 stood at N3,060,318.22.

iii. Interest on the total sum of N6,560,318.22 at the rate of 21% per annum from April, 1996 to the date of judgment and thereafter at the rate of 10% per annum until the judgment is finally liquidated.

Now, after pleadings have been concluded and exchanged and after the resolution of certain preliminary issue, hearing in the case commenced on the 14 July, 1998. A total of two witnesses gave evidence one each for the plaintiff as well as for the defendant.

In his evidence in-chief before the court, the PW1, Mr Saka Olarewaju Sule, a credit officer with the plaintiff com-pany informed the court that on the 3 May, 1991, the plain-tiff’s company placed the sum of N3.5 million in a 90 day tenure term deposit with the defendant. This was done by the plaintiff through instruction to the Central Bank of Nige-ria to credit the defendant’s Account No. 6506/0438 with the discounted value of N3.5 million and the Central Bank had done that in compliance with the plaintiff’s instruction. However, the witness said, at the expiration of the tenure, the defendant resorted to requesting for repeated rollover of the principal sum for subsequent extra 90 days and this was done through defendant’s letters dated 28 October, 1991 and 10 February, 1992 respectively. These letters were ad-mitted in evidence and marked as exhibits 1 and 2.

The request contained in exhibit 2, he went on, proposed a 27% interest for the principal sum being rolled over. But the plaintiff insisted on 29% interest and made same a condition for the rollover while at the same time making it clear that it will be the last rollover it will agree to concede to the defen-dant. This was communicated to the defendant through plain-tiff’s letter dated 14 February, 1992, which letter is now ex-hibit 3 before the court. Testifying further, Mr Sule said on the 19 February, 1992, the defendant wrote a letter to the plaintiff indicating that the terms of the rollover have been communicated to a third party while expressing the hope


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that they will be in a position to forward their cheque for the plaintiff’s upfront interest. This development displeased the plaintiff, who subsequently wrote a letter to the defendant on the same 19 February, 1992 calling in the placement with the accrued interest. Both letters exchanged by the parties are exhibits 4 and 5 respectively.

Expatiating on this, the PW1 informed the court that when a facility on placement is called in, it is expected that the de-fendant should pay up immediately. But the expectation was not realised as the defendant did not pay up, to the effect that two years later on the 3 March, 1994, the plaintiff had to write to the defendant a final recall letter. This letter is now exhibit 6 before the court. And despite these letters, the de-fendant did not redress their obligation to the plaintiff. So, on 25 April, 1994, according to the witness, the plaintiff re-ported the defendant formally to Central Bank of Nigeria through a letter dated 25 April, 1994; consequent upon which the Central Bank of Nigeria in turn wrote a letter to the defendant. These letters form exhibits 7 and 8 respec-tively. The intervention by the Central Bank of Nigeria did not precipitate the redemption by the defendant of its obliga-tion, necessitating the plaintiff to refer the case to its Solici-tor, Messers Bayo Ojo and Co who wrote a letter to the de-fendant dated 21 September, 1995, calling on the defendant to pay up or face litigation. The letter was exhibited and marked exhibit 9.

In continuation of his evidence, the witness stated that the defendant in this case is directly liable because the plaintiff credited the defendant’s account with the Central Bank of Nigeria and with that, it had the liberty of investing the sum so credited in whichever way it thought was more profitable for it. The plaintiff he said further, did not have any direct dealings with either Fasig Associates Nigeria Ltd or Keffi Properties Nigeria Ltd as the facility was granted on the per-ceived credibility of the defendant, Rims Merchant Bank and as such there is no way in which the plaintiff had knowledge nor consideration about other parties being men-tioned by the defendant. The witness denied in his evidence


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that the plaintiff received any amount from Niger Insurance Company and that since it had no contractual relationship with the Insurance Company, it could not have issued any authority or directive for that Company to be sued.

Concluding his testimony for the plaintiff, the PW1 prayed the court to order the defendant to pay to the plaintiff the principal sum of N3.5 million and the accrued interest of N3,060,318.22 up to 31 March, 1996 bringing the total sum to N6,560,318.22 as at that date and interest thereon at 21% per annum until judgment is delivered and a further 10% interest on the judgment sum until same is liquidated.

The testimony of the PW1 under cross examination runs thus.

“I joined the service of the plaintiff in February, 1992. At the time the business transaction between the plaintiff and the defendant took place I was not working in the Bank. I relied on documents and Statements of those who were in the Department at the time of the transaction. I know the defendant very well.”

The document tendered and admitted and my evidence rep-resented the truth about this case. The plaintiff engages in Commercial Banking. We have numerous customers and operate various accounts. We have for instance Overdraft Account, Savings Account, Term Deposit Account, Bankers Acceptances Account, Commercial Paper Account and some other Current Accounts. A customer on a Term De-posit Account will be given a receipt which will indicate the amount deposited, the tenure and the agreed interest rate. The plaintiff maintains an account for the defendant. The defendant’s account is operated in the plaintiff’s bank. I cannot recollect the number of the account.

Answering further questions from the learned Counsel to the defendant, Mr Sule testified further in these words:–

I know the defendant is a Merchant Bank. The plaintiff has no ac-count with the defendant. The firm of Bayo Ojo and Co was re-tained by the plaintiff to pursue the recovery of the amount owed to Trade Bank by the defendant. I know that the firm of Solicitors wrote letters to the defendant with the consent and approval of the plaintiff. It is true I said in my evidence in chief that the plaintiff invested the sum of N3.5 Million with the defendant. The plaintiff


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does not have the Certificate of Investment but the cheque issued by Rims Merchant Bank (defendant) for the payment of the up-front interest confirmed that we have fund with them.

Apart from this transaction, there was another transaction between the plaintiff and the defendant. We heard of Fasig Associate through the defendant. We know the Keffi Proper-ties Ltd through the defendant as a sister company of Fasig Associates. At the time we called in the funds placed with the defendant because of their unending request for rollover. They then wrote us that they will communicate our position to Fasig Associates. From the beginning of the transaction up till when we called in the facility, we had no dealing with either Fasig Associates or Keffi Properties Ltd. Before the transfer of the funds to the defendant through the CBN, there was correspondence between the plaintiff and the defendant. And there were other correspondence after the transfer of the funds. It is true that the defendant invited the plaintiff to in-vest in a commercial paper with Fasig Associates. We were given an implied guarantee by the defendant before the placement of N3.5 million was effected to the defendant’s CBN Account. There was a reply to exhibit 9 written by our Solicitors.

At this juncture, the reply to exhibit 9 addressed to Bayo Ojo and Co was admitted in evidence and marked as exhibit 10.

In answering further questions from the defendant’s Coun-sel, the witness testified further thus:–

We know a Company called Niger Insurance Plc through corre-spondence written by Rims Merchant Bank after we called in our investment. I am aware that Niger Insurance Plc gave credit Bond on the investment. I am also aware that out of the sum of N2 mil-lion paid to Rims Merchant Bank under the credit Bond N700,000 was paid to the plaintiff by the defendant. I have seen the letter through which the N700,000 was paid to the plaintiff now in court. This letter, it should be pointed out is now exhibit 11 before the court.

Continuing with his answers under cross examination, the witness went on to say that:–

We have once received a letter from Keffi Properties Ltd. It is also true that we sent a covering letter with the letter from Keffi


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Properties Ltd and the interest schedule to the defendant. The let-ter of Keffi Properties Ltd sent to us was actually addressed to Ni-ger Insurance Plc.

The documents mentioned by the witness were sought to be tendered and admitted in evidence by the defendant’s Coun-sel but an objection was taken particularly to the admissibil-ity of the attachments to the covering letter mentioned by the witness which are essentially the copy of the letter from Keffi Properties Ltd and the interest Schedule emanating from the plaintiff. I overruled the objection in a reserved ruling subsequently delivered by me and admitted all the documents in evidence and marked same as exhibits 12, 13 and 14 respectively.

Concluding his evidence under cross-examination, Mr Sule stated further:–

“What I am aware of is that, there was a meeting between Rims Merchant Bank, the defendant and other banks that contributed funds (but our bank was not one of them) at which resolutions were obtained to call in the insurance cover pledged by Niger In-surance and to possibly sue Keffi Properties or Fasig but I am not aware which one of the two was to be sued. We did not give any directives on the issue of suing either Fasig or Keffi Properties Ltd. We have sent a statement of account to the defendant. Exhibit 13 is the Statement of Account I just mentioned. I do not agree that we invested with Fasig and Associates and not the defendant. It will not be correct to say that the defendant is not owing the plaintiff.”

Perhaps I should state here that wherever in his testimony the witness mentioned the word “we” it is obvious that within the context of his evidence he is taken to be referring to the plaintiff’s Company on behalf of which he testified.

Re-examined by the plaintiff’s Counsel, the witness stated that the title documents of Fasig and Associates are with the defendant and that the plaintiff does not share any collateral with the defendant. He stated further that there were cheques in relation to the transaction issued by defendant for upfront payment of interest.

The above represents the totality of the evidence, adduced through the only witness called by the plaintiff during both


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examination-in-chief and cross examination as well as under re examination.

On the part of the defendant, one Mr Aremu Abdullahi, a Senior Executive working with the defendant who claimed to be a banker gave evidence on behalf of the defendant. He testified to the effect that the defendant is a Merchant Bank carrying out various wholesale banking activities such as ac-cepting deposits in form of fixed deposit account, current account, strict call account. The defendant, he said is also involved in financial intermediation such as acting as an is-suing house for commercial papers activities as well as lend-ing in various form like short term loan, medium term loan and revolving cash advance, etc

He recalled that in 1991, the plaintiff as well as the defen-dant and two other Banks invested in a commercial paper of Fasig Nigeria Ltd and that in the transaction the defendant acted as the issuing house and the investment was secured by a credit Bond of a consortium of Insurance Companies led by Niger Insurance Plc. As the issuing house, the defen-dant invited the other banks to invest in the commercial pa-per. The credit bond mentioned by the witness was admitted in evidence and marked as exhibit 15.

Continuing in his evidence, DW1 stated further that the plaintiff does not maintain any account with the defendant and as such the defendant has never issued any Certificate of Investment to the plaintiff. He recalled that Fasig Associates has not up to the time of his testimony redeemed the invest-ment and neither did the consortium of the Insurers redeem their open pledge. He said however, after much pressure from the defendant on the Lead Insurance Niger Insurance Plc, it paid the sum of N2 million in 1994 which was used to reduce the outstanding indebtedness. The money according to the witness was shared among the various investors with the payment of N700,000 going to the plaintiff. And when Fasig Associates defaulted, the defendant sent a demand no-tice for them to pay and also held various meetings with them in order to get them pay up. But this did not work, ne-cessitating the defendant to take up the Insurance Company


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that guaranteed the investment and in the process of doing that reported the Insurance Company – Niger Insurance Plc to the Commissioner of Insurance. This letter was sought to be tendered by the defendant’s Counsel but he consequently withdrew it.

In his further evidence before the court, Mr Abdullahi tes-tified that when both Fasig Associates and the Insurance Company failed to pay up, the defendant decided to call a meeting of all the investors and at that meeting, the plaintiff was not present. However, the defendant, wrote a letter to the plaintiff intimating it of the resolution reached at that meeting by the investors as to the action to be taken against Fasig or the Insurance Consortium. The plaintiff responded to the letter sent in by the defendant in writing. This letter of response from the plaintiff as well as the defendant’s are now exhibits 16 and 17 respectively. As a result of the re-sponse by the plaintiff and in view of the resolutions reached by the investors, the witness stated further that the defendant instructed the firm of Legal Practitioners, Ba-balakin and Co to sue Fasig and the Insurance Company. The letter of instruction is exhibit 16 before the Court. Con-sequent to the instruction processes were set in motion ac-cording to the further evidence of DW1 against Fasig and Niger Insurance Plc at the Lagos High Court in order to re-cover the investment. These processes were admitted in evi-dence after I overruled an objection raised by plaintiff’s Counsel. They are exhibits 19 and 20 respectively.

Concluding his evidence in chief before the court, DW1 said that the cases are still pending at the Lagos High Court and that it is not true the assertion that the defendant is ow-ing the plaintiff the sum of N6,560,318.22 since the plaintiff has not any investment with the defendant. In fact, he said further, the defendant is not owing the plaintiff anything and urged the court to strike out the case.

Cross-examined by the plaintiff’s Counsel, the witness who again gave his name as Arome Michael Abdullahi stated in his evidence as follows:–

“I do know that the defendant has an account with Central Bank of Nigeria but I do not know the number. The number 65060438


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represents Current Account Number of Rims Merchant Bank with the CBN. The transaction that led to this action occurred in 1991. The amount involved is N3.5 million which Trade Bank invested in the Commercial paper of Fasig. This sum of N3.5 million was transferred into the account of Rims Merchants Bank through the CBN. This is the document by which the plaintiff instructed the CBN to transfer the N3.5 million to the defendant. The defendant was copied the letter.”

At this juncture, the plaintiff’s Counsel sought to tender the letter in evidence through the DW1, but the learned Counsel to the defendant objected to this, which objection I overruled in a reserved ruling delivered subsequently. The letter was admitted as exhibit 21 and is the last exhibit in the case.

In answer to further questions during cross examination, Mr Abdullahi testified further in these words:–

“I have not seen the copy endorsed to the Bank. I am just seeing it when it was shown to me. I do not know that the N3.5 million was to be paid back after 90 days with interest. It is not correct to say that I was not in the whole picture of the circumstances surround-ing this case from the beginning. It is not the defendant that paid interest to the plaintiff rather it was Fasig that paid the interest. It is true to say that interest was paid through the defendant. It is not true to say that the interest paid to the plaintiff was paid by the de-fendant through the Central Bank. In paying interest at the initial stage, it was paid upfront was made upfront through CBN to the plaintiff. The payment of the initial interest upfront was made through instruction by Fasig to the defendant who now instructed CBN to effect payment to the plaintiff. I do not have anything now to show the instruction given to us by Fasig. I do not have with me any evidence to show our instruction to CBN to make payment of interest to the plaintiff. The N3.5 million was invested in Fasig Commercial papers. Fasig is the beneficiary of the investment be-cause Rims is only an issuing house. It is Trade Bank that invested in the Commercial paper of Fasig and Rims Merchant Bank did not invest on their behalf. Trade Bank did not invest with Rims Merchant Bank so we couldn’t have issued any Certificate of In-vestment. It is not true to say that the defendant invested the N3.5 Million. The defendant on his own invested its own money in the same Fasig Commercial papers. We invested N1.5 million. I would not be surprised that the plaintiff has never communicated directly with Fasig Associates. I am aware that Fasig has not been able to redeem the N3.5 million investment. Exhibit 15 is the secu-rity for the commercial paper facility which the plaintiff and other


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banks invested in. The interest of the plaintiff is included in the Ten million Naira Bond. The plaintiff’s name is not mentioned in the Bond. Exhibit 19 is a writ of summons between the defendant and Niger Insurance. The plaintiff is not directly a party to the suit. There is no claim on page 2 of exhibit 19 which relates to the plaintiff.”

Re-examined by the defendant’s Counsel, DW1 informed the Court that exhibit 15 was the Insurance Bond under which the sum of N2 Million was paid out of which sum N700,000 was paid to plaintiff.

This also concludes the evidence adduced by the defen-dant in support of its case.

Addressing the court, Mr Bayo Eniwaye of Counsel, rep-resenting the second defendant submitted that the claim of the plaintiff is as set out in paragraph 14 of the statement of claim dated and filed on the 11 July, 1996. The defendant equally responded by filing a 14 paragraph Statement of De-fence on the 25 July, 1996. He pointed out the fact that the parties called a witness each and on the whole 21 exhibits were tendered and admitted. The learned Counsel then pro-ceeds to formulate two issues for the determination of the court as follows:– 1. Whether or not, from the evidence on record and the

exhibits tendered, the plaintiff can be said to have proved its case as required by sections 135 and 136 of the Evidence Act as amended.

2. Whether or not and considering the effect of exhibits 6, 9, 11, 13, 16, 17, 19 and 20, the plaintiff can still sustain its action against the defendant.

In respect of the first issue, Mr Eniwaye submitted that the plaintiff has not discharged the burden placed on it by sec-tions 135 and 136 of the Evidence Act. The plaintiff’s claim is that the sum of N3.5 Million was placed with the defen-dant and that evidence on record shows that where deposit of this nature is made, there must be a receipt evidencing the deposit as well as a certificate of investment. But in the in-stant case, the learned Counsel posited further, the plaintiff admitted that the defendant has no account with the plaintiff


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and there is no receipt tendered nor certificate of investment to show that the money was actually deposited with the de-fendant. There was also no statement of account tendered before the court. The defendant’s Counsel submitted further that the plaintiff without any doubt has told the court that it is not the defendant owing it but another person else. By ex-hibit 13 which is the only statement of account before the court, which exhibit was prepared by the plaintiff, it was mentioned therein Fasig Associates Nigeria Ltd in care of Rim Merchant Bank which goes to show the court that the plaintiff knows the person who is owing it. It is on record, he said, under cross examination of the plaintiff’s witness that the plaintiff in this case has no receipt to show that the money was deposited with the defendant. The witness equally told the court under cross examination that they do not have certificate of investment. The learned Counsel then referred to paragraph 14, Roman II, of the plaintiff’s state-ment of claim where the plaintiff is claiming N3,000,318.22 as interest apart from the principal sum and submitted that the court has not been told how the debit on interest was ar-rived at and referred to the case of Anyakwo v ACB (1976) 1 All NLR 144 at 163, where he said the Supreme Court held, inter alia, that where there is no document showing how the debits were arrived at, the claim cannot be sustained.

Submitting further, Mr Eniwaye stated that the plaintiff’s witness both in his evidence in chief and under cross exami-nation started somersaulting. This he said was demonstrated by their claim that they placed N3.5 Million with the defen-dant but under cross-examination the witness said in quotes “It is true that our bank was invited to invest in a commer-cial paper of Fasig Associates Nigeria Ltd” and went further to say “the facility (that is N3.5 million allegedly deposited with defendant) was granted on the perceived credibility of the defendant”. The learned Counsel then sought to rely on the Supreme Court’s case referred firstly to Solomon and others v Mogaji and others (1982) 11 SC. 1 esp. at 13 which turned out to be a wrong case and the learned Counsel cited the correct case as Ajide v Kelani (1985) 3 NWLR (Part 12)


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248 at 269 Paragraph C. He submitted on this that the proper party in the case has not been brought before the court and that is Fasig Associates. The learned Counsel contended fur-ther that from the onset of the transaction, the plaintiff knew what was at stake. From all the exhibits tendered especially letters between the parties, the topic has always been “your N3.5 million investment in Fasig Associate Commercial pa-per”. That there is no variation between the topic and the body of the letters. Submitted on this, that the plaintiff has never been misled into investing into the commercial paper, the plaintiff’s witness he said told the court that he was aware of the Credit Bond, exhibit 15 before the court and also ad-mitted the fact that the plaintiff has benefitted under the Bond to the tune of N700,000 as per exhibit 12 and that on exhibit 12, it is the same topic and the plaintiff took the N700,000 only to now turn round to complain. He argued further that from the beginning to the end, the pleadings on the Statement of Claim is at variance with the evidence on record and as such the court should hold that the claim has not been proved and the case should therefore be dismissed.

On the second issue, the learned Counsel submitted that considering exhibits 6, 9, 11, 13, 16, 17, 19 and 20, this suit is an abuse of court’s process. By exhibit 16 all investors in the commercial papers including the defendant in this case and the plaintiff have agreed to sue both Fasig Associates Nigeria Ltd and Niger Insurance Plc that gave the Credit Bond under which they benefitted. Counsel referred to ex-hibit 17 where the plaintiff gave its consent that the inves-tors should go ahead to file the suits against the above men-tioned companies. The defendant in this case was mandated to take action in exhibits 16 and 17 and it took the actions vide exhibit 19 before the court and the suits are still pend-ing at the Lagos State High Court. The learned Counsel then asked the question whether it will be proper for the plaintiff to sue the defendant on the same subject matter that is be-fore that court and he answered the question in the negative.

Mr Eniwaye submitted further that by paragraph 2 of ex-hibit 6, paragraph 2 of exhibits 9, 13, 16 and 17, the plaintiff admitted therein that the transaction leading to this case is


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not that of banker/customer relationship but an investment in a commercial paper and the only commercial paper we are talking about in this case is that of Fasig Associates Nigeria Ltd which means that the plaintiff knows and is admitting that it invested in Fasig Associates Commercial papers. The learned Counsel then submitted that the suit was instituted to embarrass the defendant, pointing out to the fact that the only witness for the plaintiff under cross examination said “We were given an implied guarantee by the defendant be-fore the placement was effected”. So the defendant in this case was brought to court on the basis of an implied guaran-tee that has not been documented. It is on record, said the learned Counsel that the defendant equally invested in the commercial paper. He urged me to, on the basis of the dis-crepancies to dismiss the case with substantial cost for em-barrassing the defendant.

In his own address, Mr Toyin Oladipo, learned Counsel to the plaintiff restated the plaintiff’s claim against the defen-dant which is to the tune of N3.5 million as contained in the plaintiff’s statement of claim dated 11 July, 1996, being the sum placed by the plaintiff with the defendant plus interest on the said sum at the rate of 21% per annum from 19/2/92 until the date of judgment and thereafter at 10% per annum until the debt is completely liquidated.

The learned Counsel submitted that from the evidence ad-duced in the case as a whole, the only thing that is not in dispute is the fact that the sum of N3.5 million passed from the plaintiff to the defendant in May, 1991. The learned Counsel then formulated two issues which in his view called for determination. These are:– 1. Whether in May, 1991 when the sum of N3.5 million

passed from the plaintiff to the defendant, the money was invested by way of placement with the defen-dant or invested in Commercial Paper of Fasig Asso-ciates Ltd.

2. What is the current indebtedness of the defendant to the plaintiff?


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On the first issue, Mr Oladipo submitted that in order to un-derstand or interpret the intention of the parties to the transac-tion relating to the N3.5 million, it is appropriate in law to consider events that took place shortly before during or shortly after the passing of hand of the money. He drew attention to the evidence of PWl who testified that the money was placed with the defendant as a term deposit for 90 days and that the money was paid to the defendant via instruction to the Central Bank of Nigeria to credit the defendant’s current account. The DW1, he said, had admitted under cross examination that the money was paid into the defendant’s current account No. 6506/0438 and also identified exhibit 21 as the letter of in-struction to CBN which he admitted was copied to the defen-dant. I was therefore urged based on these facts to hold that the terms contained in exhibit 21 support the evidence of PWl that the money was a placement with the defendant.

The learned Counsel submitted further that the fact that exhibit 21 was copied to the defendant coupled with the de-fendant’s receipt of the money without so much a disagree-ment or objection to the terms of exhibit 21 is evidence of acceptance of the terms in that exhibit, especially further regard being had to the fact that the defendant who had the opportunity to return the money if the terms in exhibit 21 were not agreeable to it did not do so which is also evidence of acceptance of the terms in exhibit 21. And what is more, the defendant paid the plaintiff an upfront interest pursuant to the terms of exhibit 21. All these submissions according to Mr Oladipo are answers to the issue raised by the defen-dant’s Counsel in his address that the plaintiff did not tender or produce certificate of deposit or receipt evidencing de-posit. He urged me to disbelieve the evidence of DW1 that the defendant acted only as an issuing house and that N3.5 Million was invested by the plaintiff in the commercial pa-per of Fasig Associates Ltd. He submitted that the defendant has the onus to prove that it acted as an issuing house but failed to do so as required by section 35(1) of the Evidence Act. He posited further that the defendant ought to have ten-dered a letter appointing it as an issuing house by Fasig which letter would have been its mandate to act but no such


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letter was tendered. The defendant should have tendered the prospectus it has published in respect of the offer for in-vestment for commercial paper or in case of a private issue, the letter inviting the plaintiff to subscribe or invest in the commercial paper which has not been done.

The learned Counsel went further to say on this, that the approval of the Securities and Exchange Commission for the issue should have been exhibited as required by section 7(1) of the Securities and Exchange Commission Act Cap 406 Laws of the Federation of Nigeria, 1990 but no such thing was done. I was urged to hold that the defendant has failed to prove that it has acted as an issuing house and that the as-sertion was an afterthought. The learned Counsel contended further that it is worthy of note the fact that the sum of N3.5 million was passed into the Current Account of the defen-dant and that if the assertion was correct then the money would have been paid into a special account and not the de-fendant’s own current or personal account. The court is also urged to note that the transaction which culminated into the passing of hands of the N3.5 million took place in May, 1991 and the issue of Fasig Associates Ltd was not intro-duced into the transaction until 28 October, 1991 about five months after the agreement, passing of money, payment of interest upfront and that it was on that same date that exhibit 1 was written when the defendant found it difficult to re-deem the placement and started to plead for a rollover.

The learned Counsel submitted on this, that the unilateral introduction of Fasig Associates Ltd into the transaction be-tween the parties more than five months after the contract was entered into is ineffectual to change the nature of the transaction. He contended that the transaction between the parties is simple investment of money by the plaintiff in the defendant for interest. I was also urged by Mr Oladipo to note that exhibit 15, which is a credit bond does not indicate either the plaintiff or the defendant as parties or beneficiaries to it as the purpose of the Bond as stated therein is “Bridging finance pending the completion of a private placement of N20 million equity and N40 million Real Estate Note


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to finance the construction of Keffi Plaza”. He argued on this, that the credit bond has nothing to do with commercial paper investment. I was urged again to hold that the credit bond is completely irrelevant to this case as neither the plaintiff nor the defendant can sue under it because they are not parties to it and no any consideration passed from them to the Insurance Companies. Put it legal parlance, the learned Counsel submitted that there is no privity cf contract between the plaintiff and the Insurance Companies under Bond in exhibit 15. I was referred to the case of Liberty In-surance v John (1996) 1 NWLR (Part 423) 192 at 200. Also the case of Seedorf v Arch. Bode (1996) 1 NWLR (Part 423) page 223 at 230. This being the case, the learned Counsel submitted that the proper party to sue is the defendant who collected the N3.5 million and the submission he said, is an-swer to the submission of Mr Eniwaye that the proper party is not in court. He then urged the court to take note that ex-hibits 19 and 20 which are court’s processes of the High Court of Lagos State have no relevance to this proceedings as the plaintiff is not a party to them and the N3.5 million which is the subject matter of this suit is not the subject mat-ter in those suits and none of the reliefs claimed in the suits are indicated as being claimed for the plaintiff or for its benefit. And also in those suits, there is nothing concerning any commercial paper allegedly issued by Fasig Associates Ltd and as such the court should disregard exhibits 19 and 20. On the whole, I was urged to hold that the plaintiff has been able to prove on balance of probability that it invested N3.5 million in the defendant. The learned Counsel distin-guished the case of Anyakwo v ACB (supra) cited by Mr Eniwaye on the facts. In that case, he said, the plaintiff relies solely on the statement of account which it tendered through a witness who had not examined it whereas in this case, the plaintiff is not relying solely on the statement of account, neither parties specifically pleaded the statement of account. The plaintiff in this case is relying on exhibits 1 and 2 which are the requests for a rollover by the defendant and exhibit 21 which is the instruction to CBN to credit the defendant’s account, the admission by DW1 that upfront


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interest was paid and that N3.5 million has not been re-deemed except for the payment of N700,000. Issue No. 2

The learned Counsel submitted on Issue No. 2 that from the evidence of PW1 and exhibit 21, the N3.5 million paid to the defendant was a placement for 90 days at the rate of 21% per annum which was rolled over at the rate of 27% per annum vide exhibit 2 and that even DW1 has admitted that the money was not paid back. He posited further that from the evidence of PW1 the interest that has accrued as at 31 March, 1996 is Three Million, Sixty Thousand, Three Hundred and Eighteen Naira, Twenty-two Kobo (N3,060,318.22). The total of the principal sum and interest being Six Million, Five Hundred and Sixty Thousand, Three Hundred and Eighteen Naira, Twenty-two Kobo (N6,560,318.22). The PW1, he said, has not been cross ex-amined on these figures nor did DW1 dispute them because the defendant concentrated only on its denial that the plain-tiff invested the money with the defendant and so under the circumstance, the statement of account becomes unneces-sary. I was urged to believe PW1 and give judgment in the sum of N6,560,318.22k and interest thereon at the rate of 21% per annum from 31 March, 1996 until the date of judgment and thereafter at the rate of 10% per annum I was referred to the case of Amadi v Nwosu (1992) 5 NWLR (Part 241) 273 at 284, in support of the submission on the effect of failure to cross examine a witness.

Finally and in reply to the submission of the learned Coun-sel to the defendant that N700,000 was paid to the plaintiff from the Credit Bond exhibit 15, Mr Oladipo submitted that it is important to note the evidence of DW1 that the plaintiff was not represented at the meeting where it was purportedly agreed to sue the insurers. But it would have been imprudent on the part of the plaintiff to have refused the N700,000 which was made as partial repayment of the outstanding N3.5 million plus the interest. The money he said could have come from the devil or any other source but it would be stu-pid of the plaintiff to refuse and receive same on the


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ground of its source once it is sent as part payment of its to-tal indebtedness.

In his reply on point of law, the learned Counsel to the de-fendant submitted that getting approval or not by the defen-dant in relation to this matter does not come into play at all as what is traded at the floor of the house are shares and that here is no evidence on record that any of the parties bought or sold shares. What is at stake he said is investment in a commercial paper and this is not covered by section 7(1) of the Securities and Exchange Commission Act referred to by the plaintiff’s Counsel. One important thing he said, to be noted is the fact that the defendant is not a limited liability company in which shares can be sold or bought. He urged me to disregard section 7(1) of Securities and Exchange Commission Act.

On the relevancy of exhibits 15, 19 and 20, Mr Eniwaye submitted that exhibits 16 and 17 have proved beyond doubt that they are relevant. He referred to the authorities cited in support of Issue 1 and submitted that they are irrelevant to the case because the authorities are to the effect that plaintiff is not privy to exhibit 15. The something applied to the au-thority cited in Issue 2 and which he said is distinguishable and is not relevant. He reiterated his reliance on Anyakwo’s case (supra) and urged the court to dismiss the case in its entirety.

The above represents the claims together with the argu-ment of the two learned Counsel. It is now my task to pro-ceed with the evaluation of the evidence and in the light of the pleadings come to a decision one way or the other.

But before I venture into that, I wish to put it on record that Mr Bayo Eniwaye after concluding his address and be-fore the address by the learned Counsel to the plaintiff cited the case of F.M.B.N. v NDIC (1999) 2 SCNJ page 57 at 82 which he said would assist the court in determining this case but he did not elaborate on how it would assist the court and Mr Oladipo in the course of his address did not comment on the case. I will comment on it if and when necessary.


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And that I think it is desirable to set out the salient aver-ments in the pleadings so that the evaluation of the evidence in respect thereof would be better appreciated. I seek to set out paragraphs 3–10 of the plaintiff’s statement of claim and paragraphs 2–13 of the defendant’s statement of defence in order to high light the areas of controversy between the par-ties. “Paras. 3. The plaintiff placed with the defendant a sum of

N3,500,000 on a 90 days term deposit at the interest rate of 21% per annum payable up front on 3 May, 1991. Document in evidence of the placement titled ‘Transfer of Funds’ is hereby pleaded.

4. At the expiration of 90 days when the said sum of N3,000,000 was due for repayment to the plaintiff, the defendant did not pay but sought for a ‘roll over’ of the said sum for another 90 days with interest at the rate of 27% per annum payable up front. The de-fendant’s letter to this effect dated 10 February, 1992 is hereby pleaded.

5. The plaintiff agreed to the ‘roll over’ request but on the condition that interest would be paid at the rate of 29% per annum and that would be the last ‘roll over’ to be granted. The plaintiff’s letter to this effect to the defendant is hereby pleaded.

6. In reacting to the plaintiff terms and conditions at-tached to the roll over as pleaded in paragraph 5 above, the defendant claimed in a letter dated 19 February, 1992 that it had communicated the terms therein to a third party, (Keffi Properties Ltd) and expressed hopes that it would be able to send a cheque for the roll over interest soonest. The letter from the defendant to the plaintiff is hereby pleaded.

7. The plaintiff avers that it made the placement and consented to the roll over on contractual terms with the defendant only and relying on the credibility and representations of the defendant only and not any other third party.

8. The plaintiff was not satisfied with the introduction of a third party into the transaction and since the de-fendant could not meet its terms for the roll over, re-called the placement and demanded for immediate redemption of same vide its letter also dated 19 Feb-ruary, 1992. The letter is hereby pleaded.


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9. The defendant has refused to pay the said sum of N3,000,000 to the plaintiff despite several demands and even intervention by the Central Bank of Nigeria to which the plaintiff reported the defendant, and also demands by solicitors to the plaintiff. The letters of demand, (including that of solicitors) and those in evi-dence of report to the Central Bank of Nigeria and the CBN’s intervention are hereby pleaded.

10. The plaintiff avers that it had/has nothing to do with anybody also in relation to its placement with the de-fendant and avers that the defendant was at liberty to invest the placement in any business, this repayment to the plaintiff cannot be made contingent to any third party performing.”

Now the defendant’s averments in the statement of defence are as below:– 2. The defendant vehemently deny paragraphs 1, 2, 3,

4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 of the plaintiff’s statement of claim and puts the plaintiff to the strict-est proof.

3. The defendant will at the trial of this action contend that she was and still is an agent of Fasig Associates Nigeria Limited at all material time of this suit.

4. The defendant in answer to paragraphs 3, 4 and 5 of the plaintiff’s statement of claim states that at no time did the plaintiff open any account or place any fund with the defendant. The defendant shall at the trial lead evidence on how accounts and investment are made with her.

5. The defendant avers further that contrary to para-graphs 3 to 8 (both paragraphs inclusive) of the statement of claim, the defendant acted as Issuing House for Fasig Associates Nigeria Limited/Keffi Properties Nigeria Ltd (“the Company”) wherein the plaintiff and other Investors including defendant were invited to invest in a Commercial Paper of the Company for the construction of Keffi Plaza Project at Keffi Street by Awolowo Road, Ikoyi, Lagos.

6. Further to paragraph 5 (supra) the defendant further states that it did not guarantee the Commercial Paper


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of a consortium of Insurance Companies led by Ni-ger Insurance Company Plc.

7. Further to paragraph 6 (supra) and contrary to para-graphs 4 and 5 of the statement of claim, the defen-dant avers that when the Company and the Insurance failed to meet their obligation it was agreed by the Investors to the knowledge and with the consent and approval of the plaintiff that the defendant sue the Company and the Insurers to honour their obliga-tions and in addition to roll over the investment. In rolling-over the investment, the defendant as the is-suing house was only acting as an agent of Fasig As-sociates Nigeria Ltd.

8. Contrary to paragraphs 6, 7 and 8 of the statement of claim which is denied, the defendant says that it has no contractual term, representation or guarantee with the plaintiff and that it is bad faith on the part of the plaintiff to now contend as it has done against the defendant.

9. Further to paragraph 8 (supra) the defendant says that after the roll over, the plaintiff was paid the sum of N700,000 vide Wema Bank cheque dated 22 No-vember, 1993 as its own share under the Credit Bond referred to in paragraph 6 (supra). The payment was made by Niger Insurance Company Plc. The defen-dant shall at the trial of this suit rely on the Niger In-surance Company Plc letter dated 2 November, 1993 forwarding a cheque of N2m to the defendant, and file copy of the defendant’s letter to the plaintiff dated 17 November, 1993. Notice is hereby given to the plaintiff to produce Wema Bank Cheque afore-said otherwise the plaintiff shall at the trial rely on the photocopy of the said cheque.

10. In addition to paragraphs 1 to 9 (supra) and contrary to paragraphs 10, 11, 12, 13 and 14 of the statement of claim, the defendant shall contend at the trial that at the instance of all the Investors including the plaintiff she instituted actions at the Lagos High


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Courts in Suit No. LD/330/95 against the Company and another one in Suit No. LD/197/95 against Ni-ger Insurance Company Plc which said suits are still pending before the Lagos High Courts.

11. The defendant denies owing the plaintiff the sum of N6,560,318.22 or any sum at all nor is she liable to pay the plaintiff any interest.

12. The defendant pleads and shall rely on all letters, documents, notes, correspondences, Certified True Copies of Court Processes, Form of Credit Guaran-tee Bond Policy No. N/CAR(CG)3087/CI, etc per-taining to and connected with this case at the trial of this suit.

13. The defendant shall equally at the trial of this suit plead that to the knowledge of the plaintiff, it acted as an agent of Fasig Associates Nigeria Limited for the investment of N3.5m in the said Commercial Paper.

I have not reproduced paragraphs 11–14 of the statement of claim because of my conviction that their contents relate to the accrued interest claimed by the plaintiff on the principal sum and the total indebtedness being claimed by the plain-tiff from the defendant which has already been mentioned in the claim on the writ of summons as well as paragraph 14 of the statement of claim which I set out in limine. Suffices also to say that all the documents mentioned in the plead-ings from the various exhibits admitted before the court which I also mentioned in the preview exercise.

Now the fundamental point of dispute between the parties appears clearly to be the nature of the transaction involving the N3.5 million placement by the plaintiff in the account of the defendant at the Central Bank of Nigeria bearing number 6506/0438 according to the evidence of DW1 under cross examination. Whereas the plaintiff insists that it made the placement of the sum of N3.5 million with the defendant as a term deposit for 90 days at the rate of 21% per annum pay-able up front on 3 May, 1991 and with no other person, the


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defendant on the other hand had denied the assertion of the plaintiff and insisted that the N3.5 million investment was made in Fasig Associates/Keffi Limited Commercial paper.

The question that arises for determination which is not any different from the issues formulated by the two learned Coun-sel is what is the nature of the N3.5 million investment made by the plaintiff, is it a simple term deposit for 90 days at the interest rate of 21% per annum made with the defendant in this case as claimed by the plaintiff or an investment in Fasig Associates/Keffi Properties Limited Commercial papers as is being claimed by the defendant especially regard being had to the totality of the evidence adduced in this case?

I agree entirely with the premise of that submission of Mr Oladipo to the effect that in order to interpret and ascertain the true intention of the parties to the transaction relating to the N3.5 million it is appropriate to consider event that took place shortly before, during or shortly after the passing of hand of the money. From the pleadings especially the averments contained in the plaintiff’s statement of claim, there was nothing to indi-cate what transpired between the parties shortly before the passing of hand, of the money. But in the course of his evi-dence in chief the PW1 testified to the event that transpired when the money ie N3.5 million passed hands when he in-formed the court that on the 3 May, 1991 the plaintiff company placed the sum of N3.5 million in a 90 days tenor term deposit with the defendant through instruction to the Central Bank of Nigeria to credit the defendant’s account No. 6506/0438 with the discounted value of N3.5 Million and the Central Bank of Nigeria had done that in compliance with the instruction.

The letter of instruction now exhibit 21 before the court corroborates the evidence of this witness to the extent that the instruction was so given and this payment into the de-fendants account was not seriously contested by the defen-dant. What was hotly contested was the fact that the place-ment was with the defendant per se. Now if the evidence in the case started and ended with exhibit 21 I would have no difficulty in coming to a decision one way or the other.


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But in what appears to be evidence of what transpired be-fore the passing of hands of the money, the PW1 under cross-examination by the learned Counsel to the defendant which I reproduced earlier in the preview exercise admitted that the defendant invited the plaintiff to invest in commercial paper of Fasig Associates Nigeria and this to my mind is one point of departure from the plaintiff’s pleadings. It is for this rea-son that I think it becomes imperative for me to reproduce what I consider the most important correspondence between the parties though others not so produced are no less impor-tant. These documents speak for themselves for the clarity of purpose of what they contain which to my mind throw more light on the nature of the transaction between the parties.

I start with exhibit I, a letter written to the plaintiff by the defendant. It reads after the letter heading:–

The Head of Treasury Trade Bank of Nigeria Limited Great Nigerian Insurance House Martins Street, Lagos. Dear Sir, Your N3.5 million Investment In Fasig Associates Commercial Paper We refer to the above-mentioned subject which will mature for redemption on 4 November, 1991 and wish to seek a rollover of your investment on the following terms:– Value: N3,500,000 (Three Million, Five Hundred Thousand

Naira only). Tenor: 91 days. Rate: 21% per annum. Effective: 4.11.91. Due date: 3 February, 1992. While awaiting your favourable response, we thank you for your usual co-operation. Yours faithfully, Dupe Oladipo (Miss) Akin Akintunde Asset Trading and Intermediation Group Head Investment

Banking and Treasury


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The above letter was admitted through the PW1 and it con-firmed his evidence on a roll over of the facility and not only that it is the first signal on the nature of the transaction from the point of view of the defendant going by the subject mat-ter of the letter titled “Your N3.5 million Investment In Fasig Associates Commercial Paper”. I say first signal be-cause even from the evidence of PW1 there was no indica-tion that the defendant formerly acknowledged the receipt of the sum of N3.5 million lodged in its Central Bank Account.

It was also admitted by the PW1 that defendant did not is-sue any investment certificate to the plaintiff which would have been conclusive proof of the investment with it. But I should not be understood to be saying that the N3.5 million was not lodged in the defendant’s Central Bank Account as instructed by the plaintiff.

The lodgment was confirmed by even DW1 in his evi-dence during cross-examination and as I have pointed out the dispute is not as to the fact of lodgement of the money but to the purpose for which the money was invested and with whom.

Now exhibit 1 it appeared received no response from the plaintiff, at least such was not exhibited before the Court. Meanwhile the defendant wrote another letter dated 10 Feb-ruary, 1992 which was admitted as exhibit 2 through PW1. This letter exhibit 2 is entitled Re: Keffi Properties N3.5 million Commercial Paper. In an apparent response to ex-hibit 2 though a letter of 6 February, was mentioned, Trade Bank for the second time (the first being the endorsement of exhibit 21) at least going by the evidence before the court wrote to the defendant a letter dated 14 February, 1992 as follows:–

14 February, 1992. The Group Head Investment Banking and Treasury, Rims Merchant Ltd Lagos. Dear Sir, Re: Keffi Properties – N3.5 Million Commercial Paper


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We refer to your letter of 6 February, 1992 and write to inform you that we are willing to consider a rollover request on the in-vestment subject to an upward review of the rate of interest to 29% per annum. Meanwhile, please note that as a matter of policy we shall not en-tertain any rollover request again on maturity. Thank you. F.G. Ibrahim G.B. Adekunle Principal Manager Assistant Manager (Corporate Banking) (Corporate Banking)

The defendant wrote another letter exhibit 4 to the plaintiff on 19 February, 1992 as follows after the date.

The Principal Manager, Corporate Banking, Trade Bank Nigeria Plc 47/57 Martins Street, Lagos. Attention: F.G. Ibrahim Dear Sir, Re: Keffi Properties – N3.5 Million Commercial Paper We refer to your letter no. CORPB/06/92/462 of 14 February, 1992 and wish to inform you that this being a commercial papers everything contained in your said letter has been communicated to the issuer (Keffi Properties Ltd) with a copy to the guarantor (Ni-ger Insurance). We hope to be in a position to send you a cheque for the roll over interest soon. Thank you, Yours faithfully, Mrs. C.I. Ugbor Akin Akintunde Head Asset Trading and Group Head Investment Intermediation Banking and Treasury

The plaintiff promptly and on the same 19 February, 1992 responded with exhibit 5 it was after the date.

The Managing Director, Rim Merchant Bank Ltd Kingsway Building, 51/52 Marina, Lagos.


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Dear Sir, Re: Keffi Properties N3.5 Million Commercial Paper We refer to your letter of today (19 February, 1992) in respect of the subject matter which was your response to our letter Ref: CORP/06/92/462 of 14 February, 1996 and wish to place on re-cord our disappointment at the content. Although the instrument in question is a commercial paper backed with credit bond from Niger Insurance, we thought it should be apparent to you that we would not have invested in the paper if your corporate name was not attached ab initio. We are particu-larly distressed considering the fact that the tenor expired since 3 February, 1992 and we had conceded to your organisation the abil-ity to manage the situation better judged from our past relation-ship. We are in the light of the recent development demanding for the immediate redemption of the principal, (N3.5 million), interest at 29% from 4 February, to date and interest thereof at call rate. We are no longer interested in rolling over. Thank you. Yours faithfully, Trade Bank Plc F.G. Ibrahim G.B. Adekunle Principal Manager, Assistant Manager, (Corporate Banking Group) (Corporate Banking Group)

Another document I consider important on having thrown more light on the nature of the transaction between the par-ties is exhibit 9, the letter written by the firm of Bayo Ojo and Co to the Managing Director of the defendant. It reads after the address.

Dear sir, Keffi Properties Limited/FASIG Associates Limited Guaranteed Commercial Papers We act as solicitors to Trade Bank Plc, hereinafter referred to as our client. You will recall that some time in 1991, our client on your request and under your arrangement, invested N3.5 million in commercial papers in respect of the above subject matter, ostensibly for a pe-riod of ninety days.


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You will also recall that you kept rolling the said facility over to the extent that as at March, 1994, the principal sum plus interest stood at N6,993,059.35K. All efforts by our client to realise this investment to date, through various meetings with you and letters of demand have proved abortive. It is our instruction to make a final demand of the said sum of N6,993,059.35k from you. Therefore take notice that if within 14 days from the date of this correspondence you do not pay this amount to our client or to this office with interest to date, we shall have no other alternative than to perfect our clients further instruc-tion of winding up your bank please note that there still be no fur-ther resource to you on this matter. Yours faithfully, PP: Bayo Ojo Co

At the risk of boring you I take the pain to reproduce an ex-hibit which is the response of the defendant to the above let-ter written at the instance of the plaintiff exhibit 10 is ti-tled:–

Keffi Properties Limited/FASIG Associates Limited Guaranteed Commercial Papers We acknowledge receipt of your letter dated 21 September,1995 on the above matter. It is a fact that Rims Merchant Bank Limited invited Trade Bank Plc amongst other Banks to invest in the commercial paper of Fasig Associates Nigeria Limited, secured by a Credit Bond is-sued by a number of Insurance Companies led by the Niger Insur-ance Plc. We acted as issuing house to raising these commercial paper. We did not convey to Trade Bank Plc or the other investors the im-pression that the issue was being under written or guaranteed by Rims Merchant Bank Limited. This means that Trade Bank Plc took the decision to invest in the commercial paper purely on the strength of the paper involved. The above fact not withstanding, our Bank has kept constant touch with the investors and the company with a view to ensuring that the company meets its obligation to the investors. At one of the meetings held with the investors, Rims Merchant Bank Limited was directed to commence a legal action against the com-pany and that the Credit Bond Policy No. N/CAR(CG)3087/CI be enforced. Legal action vide Suit No. LD/330/95 has been instituted against the company and the case is expected to come up for hearing


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soon. In addition legal action has also been filed against Niger Insur-ance Company Plc vide Suit No. LD/197/95. Following the call on the Insurance Companies to redeem their Credit Bond, a cheque of N2 million dated 2 November, 1993, was received from the Niger Insurance Plc and forwarded to all the in-vestors in November, 1993 in the proportion of their investment in the commercial paper. Trade Bank Plc was paid N700,000 vide Wema Bank Cheque No. 00870 out of the sum received. From the foregoing it is obvious that Rims Merchant Bank Lim-ited is not indebted to Trade Bank Plc. Yours faithfully, E. Ekpe (Miss) E.O. Ehigiato Legal Unit Legal Adviser

I pose here to recall and co-ordinate the evidence. I have al-ready stated that first point of departure from the plaintiff’s pleadings is the admission of PW1 under cross examination that the defendant invited the plaintiff to invest in Fasig As-sociates Commercial papers, this was also confirmed in the testimony of DW1. Paragraph II of exhibit 9 the letter writ-ten by the firm of Bayo Ojo and Co, the Solicitors to the plaintiff has put the fact beyond any doubt where they wrote and I quote:–

“you will recall that sometimes in 1991, our client, on your request and under your arrangement, invested N3.5 million in commercial papers in respect of the above subject matter, ostensibly for a pe-riod of ninety days.”

Now the subject matter referred to above is Keffi Properties Limited/FASIG Associates Limited, Guaranteed Commer-cial Paper. This evidence provides us with the insight as to the events that transpired prior to the passing of hands of the money and that is that, a prior invitation by the defendant to the plaintiff to invest in commercial papers of Fasig Associ-ates Nigeria Limited preceded the payment of the money. The evidence especially that of PW1 and the above quoted paragraph from the Solicitors letter exhibit 9 is an answer to the submission of Mr Oladipo that no invitation letter was tendered by the defendant to show that plaintiff was in-vited to invest in Fasig Commercial Papers. It is the law that what is admitted needs no further proof. The fact that the


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plaintiffs failed to admit these facts in their pleadings given the overwhelming evidence coming even from their own source beats my imagination and it smacks of bad faith on their part.

From the evidence of the witnesses in this case and the correspondences between the parties some of which I repro-duced in the course of this judgment, I found as a fact that what appeared ex facie as a simple 90 days term deposit of N3.5 million at 21% per annum purportedly placed with the defendant is in fact an investment in Fasig Associates Com-mercial Papers and going by the other evidence which I in-tend to point out later in the course of this judgment, I am convinced that the plaintiff in this case from the very begin-ning to the end of the transaction has always been abraised with the nature of the transaction and what is at stake as well as the position of the defendant. The preponderance of the evidence adduced as a whole weighs more heavily in favour of the defendants pleadings than the plaintiff’s.

I now refer to the evidence contained in exhibits 16 and 17 to show that the plaintiff is well aware of the meeting cul-minating into the suits filed at the Lagos State High Court and even ratified it. Exhibit 16 is a letter from the defendant to the plaintiff while exhibit 17 is the plaintiff’s reply to it. The letter reads after the address.

Re: FASIG Associates (Nigeria) Limited Recovery of Outstanding Indebtedness We refer to our letter dated 1 July 1994, inviting you to a meeting in respect of the above subject matter. The meeting was convened following a letter received from Solicitors to Gateway Bank Lim-ited, requesting, inter alia, that Rims Merchant Bank Limited should take steps to enforce the Credit Bond given by a Consor-tium of insurers led by Niger Insurance, on behalf of the institu-tions that invested in the commercial paper raised for the com-pany. The meeting was held at our office as scheduled with only Gate-way Bank Limited, one of the investors in attendance. The Com-pany’s account was extensively reviewed and found to be highly unsatisfactory. It was the consensus of opinion that the investors cannot afford to wait indefinitely for the company and the insurers to meet their financial obligations.


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Rims Merchant Bank Limited was therefore directed to take the following legal steps to recover the sums due to the various institu-tions that participated in the investment:–

1. That an action for recovery of debt should be filed against the company.

2. Enforcement of the Credit Bond Policy No. N/CAR(CA) 3087/CI given by consortium of insurers led by Niger In-surance.

3. Enforcement of the equitable mortgage executed in favour of Rims Merchant Bank Limited by the Managing Director of the Company, Architect Fasusi in respect of his property covered by Certificate of Occupancy, registered as No. 94/94/1989 of the Lagos State of Nigeria Land Registry Of-fice Ikeja, situate at Plot No. 203, Olanrewaju Street, Aluolea, Yaba, Lagos.

4. Finally it was noted that since the original title documents in respect of the Keffi Plaza Project are in possession of Rims Merchant Bank Limited, the possibility of obtaining an order of the court to sell the property would be explored.

Kindly let us have your approval to proceed on your behalf as stated above as soon as possible. Yours faithfully, E.O. Ehigiato Legal Adviser

The response of the plaintiff in exhibit 17 reads after the ad-dress.

Dear sir, Re: FASIG Associates (Nigeria) Limited Recovery of Outstanding Indebtedness We refer to your letter dated July 13, 1994 in respect of the meet-ing recently held at your office on the above subject matter. We are agreeable with the four points action, as contained in your letter, to recover the amounts due from the company but we want to observe on a very sad note that Rims Merchant Bank Limited ought to have acted professionally along these lines long time ago without prompting from any of the lenders. That we are still con-templating these actions at this point in time confirm that you have not acted fairly in the interest of all parties especially the lenders. We hope that these actions will be set in motion to ensure that the issue is put behind us as quickly as possible.


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Thank you. Yours faithfully, Trade Bank Plc

Suddenly in one fell swoop in this document, the plaintiff has made nonsense of all it’s assertion and submissions of its Counsel that, the plaintiff has no business with the suit at the Lagos High Court and the distancing of itself from the Credit Bond and above all admitted that they are one of the lenders to Fasig Associates Limited, the company as it called it and not the defendant by endorsing the four points action plan. This evidence is at variance with the plaintiff’s pleadings.

This being the case, do I need any further proof to hold that the defendant in this case acted in an intermediation ca-pacity or as agent in the commercial paper transaction be-tween the plaintiff and Fasig Associates Nigeria Limited? I think not. But even if further evidence is needed it is sup-plied by exhibit 13, the schedule of interest attached to ex-hibit 12 a letter sent to the defendant by the plaintiff. In this document the name of Fasig Associates Nigeria Limited c/o Rims Merchant Bank Lagos was written and it contained the principal amount the subject of the investment ie N3.5 mil-lion plus all the entries of interest payable amounting to N3,748,318.22 minus N700,00 paid by Niger Insurance re-ducing the principal sum to N2,800,000 all these entries are made in the name of Fasig Associates Nigeria Limited care of Rims Merchant Bank. Thus confirming pleading of the defendant that it acted as an issuing House for Fasig Associ-ates.

So from the events preceding the placement of the N3.5 million as unfolded by the evidence adduced as a whole to the instruction to CBN in exhibit 21 and the subsequent events as high lighted in the correspondences, between the parties herein I am left in no doubt that the true nature of the transaction giving rise to this suit is that the plaintiff as well as the defendant including two other Banks to wit:– Gateway Bank Limited and North South Bank (Ni-

geria) Ltd (see exhibit 18) contributed funds and


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invested in Fasig Associates Nigeria Limited Com-mercial Papers which investment was secured by a Credit Bond as mentioned (supra) as exhibit 15 and this I so find.

I agree entirely with Mr Eniwaye having read section 7(l) of the Securities and Exchange Commission Act, that, that sec-tion has no relevance to investment in commercial papers. Even if it is relevant it does not apply to the situation of this case since there is no evidence that aliens are involved in the enterprise concerned in this case.

Since the investment is well secured by the Credit Guaran-tee Bond, the issue of implied guarantee by the defendant does not arise. I hold that the defendant in this case as an agent of a disclosed principal cannot as a matter of law be sued to answer for the default of the principal except in cer-tain exceptions not applicable here, (see the case of Inlaks Ltd v Polish Ocean Lines (1988) F.H.C.L.R. 36 paragraph 1).

On the whole, I hold that on the balance of probability and the preponderance of the evidence which tilted more in fa-vour of the defendant against the plaintiff, I found myself unable to say that the plaintiff has proved its case against the defendant with the result that the defence put up by the de-fendant succeeds. Consequently the claim of the plaintiff has failed and it is accordingly dismissed in its entirety.



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Federal Republic of Nigeria v Jude C. Uzoahia and others

FEDERAL HIGH COURT, LAGOS DIVISION MARDEN J Date of Judgment: 5 OCTOBER, 1999 Suit No.: FHC/L/FBCR/23/99

Banking – Part-heard criminal matter pending before Failed Banks Tribunal coming to the Federal High Court on the dissolution of Tribunal – Trial de novo – Whether the processes of re-arrest, reading of charge etc have to be be-gun afresh – Section 3(1) Tribunals (Certain Consequential Amendments) Decree No. 62 of 1999. Failed Banks Tribunal – Part-heard criminal matter pend-ing before Failed Banks Tribunal coming to the Federal High Court on the dissolution of Tribunal – Trial de novo –Whether the processes of re-arrest, reading of charge, etc have to be begun afresh – Section 3(1) Tribunals (Certain Consequential Amendments) Decree No. 62 of 1999 Words and Phrases – Trial de novo Facts The accused persons were standing trial before the Failed Banks Tribunal, and while proceedings were going on, the Tribunal was dissolved, but this case among other numerous others consequent upon the passing of Tribunals (Certain Consequential Amendments, etc) Decree No. 62 of 1999 was transferred to the Federal High Court and section 3(1) of the Decree stated how such matter was to be treated.

It reads:– “3(1) Where any part-heard matter is pending before any Tribu-

nal on the date of the making of this Decree the Judge (b) Shall in a criminal case try the matter de novo pursu-

ant to this Decree.” When the matter came for hearing at the Federal High Court, their Counsel took objection to the jurisdiction of the court. The gravamen of their objection was that trial de novo under section 3(1)(b) of Decree No. 62 of 1999 be interpreted to


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mean that the suspects were to be arraigned and charged afresh and for them to be arraigned, the Attorney-General of the Federation must decide whether to prosecute them or not.

In reply the Prosecuting Counsel relied on section 2(3) of the Decree which provides:–

“A charge, claim or court process filed before a tribunal estab-lished under any of the enactments specified in the schedule to this Decree shall be deemed to have been duly filed or served before the Federal High Court or High Court, as the case may be and such charge, claim and court process shall be deemed amended as to ti-tle, venue and such other matter as may be appropriate to give ef-fect to this subsection without further assurance than this Decree.”

Similarly, subsection 4 of section 2 provides that:– “Any order, remand, decision or judgment made by a tribunal be-fore the commencement of this Decree is hereby preserved.”

Held –

1. A trial de novo is a trial or retrial had in which the whole case is retried as if no trial whatever has been in the first instance.

2. A trial de novo is a trial of the entire case anew, both on law and on facts.

3. Part-heard matter in the context of section 3(1) of De-cree No. 62 of 1999 presupposes that arrest has been made, criminal prosecution has been initiated by arraign-ing the accused, charge read, plea taken, trial has begun by taking some sort of evidence and for some reason, trial is not completed and hence the matter has to be re-tried as if no evidence, both on law and on facts has been taken.

4. In view of the provision of section 2(3) of Decree No. 62 of 1999, the trial process should not start from arraign-ment when the charges and all other court process filed before the Failed Banks Tribunal are deemed to have been duly filed before the Federal High Court.



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Objection dismissed.

Nigerian statute referred to in the judgment Tribunals (Certain Consequential Amendments, etc) Decree No. 62 of 1999, sections 2(3), 3(1)

Counsel For the prosecution: Chief K.H.C. Nwokolo For the second accused person: A.O. Oru Esq. For the third accused person: E.O.E. Ekong For the fourth and fifth accused persons: B. Sheroye Esq.

Judgment MARDEN J: The provision of section 3(1)(b) of Tribunals (Certain Consequential Amendments, etc) Decree No. 62 of 1999 sent sparks flying that led to this ruling.

Considering the significance, importance and relevance of the provision, it is necessary to reproduce the section for ease of reference and it provides thus:– 3(1) Where any part-heard matter is pending before any Tribu-

nal on the date of the making of this Decree the Judge (b) Shall in a criminal case try the matter de novo pursu-

ant to this Decree.

The abridged facts of this case are that Jude C. Uzoahia (now at large) Mallam Sule Garba Nuru, Mrs Joy Ifeoma Edet, Mr Babatunde Ademolu, and Mr Sakirudeen Adewale Ajala were charged before the defunct Failed Banks (Re-covery of Debts) and Financial Malpractices in Banks Tribunal before the Honourable Justice M.A. Ope Agbe sitting in Lagos, Zone II. While the proceedings were going on, the tribunal was dissolved by virtue of section 2(1) of Tribunal (Certain Consequential Amendments, etc) Decree No. 62 of 1999. However, this case among other numerous others was saved by virtue of sections 2, 3 and Schedule Part 1 of the said Decree by vesting this Court with jurisdiction to try this case.


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When the case was mentioned before me on Thursday, 9 September 1999, Counsel to the third accused person in the person of Chief A.C. Tagbo, made an oral application of two arms.

Firstly, he applied under section 2(4) of the said Decree for the continuation of the bail of the third accused person which application was not opposed to, by the prosecution, hence I promptly granted the application.

The second application which culminated to this ruling was a challenge to the jurisdiction of this Court on the ground that the charges against all the accused persons in-cluding the third accused person is incompetent under the laws which this Court has jurisdiction to try the accused per-son which he better referred as “suspects”.

In reply, prosecution contended that Counsel for the third accused person could not take advantage of section 2(4) of the Decree to preserve the bail of the accused person and reprobate on section 2(3) of the Decree to continue the trial.

Counsel for the third accused person contended that there is a drawing board between section 2(4) and section 3(1)(b) of the Decree, in that section 3(1)(b) clearly provides that trial of part heard criminal cases must be “de novo”.

It was defence Counsel’s submission that the prosecuting Counsel must go back to the Attorney-General of the Fed-eration by virtue of the Constitution of the Federal Republic of Nigeria, 1999. Counsel contends that unless the Attorney-General of the Federation decides whether or not to institute criminal proceedings against the suspects, the case should be adjourned “sine die”.

After listening to the arguments of two contending Coun-sel, I adjourned the case to 15 September, 1999, in order to hear the arguments of the other three accused persons.

On Wednesday, 15 September, 1999, Dapo Opakunle, Esq., while aligning himself with the position of Counsel for the third accused person, contended further that it is proce-durally irregular to go on with the trial, if the matter was to proceed under section 3(1)(b) of the Decree. He submitted


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that for a trial to proceed de novo, the accused persons were to be arraigned, charges read against them, and their pleas taken. It is Counsel’s further submission that unless this pro-cedure is followed, this Court cannot assume jurisdiction.

In reply, prosecuting Counsel adopted his last submission and reiterated that Counsel would not use the provision of section 2(4) of the Decree to his advantage and disown sec-tion 3(1)(b) of the said Decree. It is his further submission that section 2(3) of the Decree provides that all pending matters before the Tribunal are deemed to have been duly filed and served before the Federal High Court. He said, should the Counsel to the accused insists that every step of the proceeding start afresh, then, the accused persons must be re arrested, kept in custody and freshly arraigned.

E.O.E. Ekong, Esq., Counsel to the second accused and also standing brief for Counsel to the third accused person adopted the arguments and submission presented to the Court on the last adjourned date on behalf of the third ac-cused person.

It is his submission that the provisions of section 3(1)(b) of Decree No. 62 are exception to the general rule under section 2(4) and section 4 of the said Decree. He urged me to take judicial notice of the notorious fact that criminal charges can only be instituted by way of information and thereafter, charges are read to the accused person and his plea recorded. He also urged me to take judicial notice of the term “de novo”, that is, the very beginning. He prayed this Court to approach the definition in a manner that will be in consonance with the letters and spirit of the constitution of this country. It is his further contention that prosecution has not obtained the fiat of the Attorney-General to prose-cute this case under section 174 of the 1999 Constitution of this country.

Relating his application with the issue of continuation of the bail of the accused and their trial de novo, Counsel con-tended that although it is the procedure that the accused must be arraigned, there is no specific law that requires that the accused person must be brought from custody, since the


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object of bail is to ensure that the liberty of an accused per-son is guaranteed before the conclusion of his trial, this is because an accused under our criminal justice is presumed innocent until he is found guilty.

In reply, prosecution Counsel drew my attention to section 4 of the Decree which stipulated that criminal proceedings brought before this Court, relating to a matter which this Court has jurisdiction under the Decree shall be tried sum-marily in accordance with section 33 of the Federal High Court Act and in accordance with the rules and procedure made under the Act. In this procedure, no formal charge need be made. It is commenced by way of a complaint, Chapter IV, Part XXXIII Criminal Procedure Act. Prosecut-ing Counsel urged me to give proper interpretation of the term de novo in accordance with the provision of the Decree.

This abstract constitutes a fair, balanced and accurate ac-count of the issues in contention between the parties together with the submissions of both learned Counsel. It remains to appraise the merit of these arguments. It is the submission of all the defence Counsel that trial de novo under section 3(1)(b) of Decree No. 62 of 1999 be interpreted to mean that the suspects are to be arraigned and charged afresh. To be arraigned, the Attorney-General of the Federation must de-cide whether to prosecute them or not. While the prosecut-ing Counsel’s submission is that the Decree has preserved the charges made against the accused.

What then is the meaning, scope and province of the term “trial de novo” in the context of section 3(1)(b) of the said Decree? Does it actually mean starting the case afresh from arraignment?

To have a FAIR and JUST approach to this issue, section 3(1)(b) cannot be read in isolation of other sections under the Decree. The other sections relevant to this issue, are sec-tion 2(1), a section conferring jurisdiction on this Court. The issue of jurisdiction I supposed, is not in dispute, the only dispute is that the case is not properly before this Court.


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Another section is 2(3) which for ease of reference is re-produced thus:–

“A charge, claim or court process filed before a tribunal established under any of the enactments specified in the schedule to this Decree shall be deemed to have been duly filed or served before the Fed-eral High Court or High Court, as the case may be and such charge, claim and court process shall be deemed amended as to title, venue and such other matter as may be appropriate to give effect to this subsection without further assurance than this Decree.”

Similarly, subsection 4 of section 2 provides that:– “Any order, remand, decision or judgment made by a tribunal be-fore the commencement of this Decree is hereby preserved.”

Back to the term “trial de novo”, Black’s Law Dictionary, (6ed) (Centennial Edition (1891–1991) defines the term trial de novo as:–

“A trial or retrial has in which the whole case is retried as if no trial whatever has been in the first instance.”

In support of the above definition is the American case of Housing Authority of City of Newark v Norfolk Reality Co 71 N.J. 314. In that case, it was held that a trial de novo is a trial of the entire case anew, both on law and on facts.

From the foregoing definition and the Court pronounce-ment that followed the spirit behind the term “trial de novo”, lays emphasis on trial that is the hearing of both parties. The only Nigerian case I could lay my hands on in this matter, is the case of Idakwo v Onoja and others (1998) 5 NWLR (Part 549) 347. This was a case where an Election Petition Tribunal was unable to complete a trial before the time of its completion lapsed. The Court of Appeal ordered the trial to start de novo and that is not to mean that all court process must start afresh.

To the defence Counsel, trial de novo in relation to section 3(1)(b) of the Decree means that every step of the process must start afresh as if the accused were never arraigned and charged. Counsel to the third accused is even of the extreme view that everything should go back to the Attorney-General of the Federation to decide whether or not to ar-raign the accused person.


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A careful perusal of section 3 of the Decree does not sup-port this contention. The heading to that section is clear and unambiguous. It is dealing with Pending Proceedings and for the purpose of emphasis section 3(1) of the Decree specifi-cally talks of “part-heard matter” pending before the tribu-nal. Part-heard matter in this context presupposes that arrest has been made, criminal prosecution has been initiated by arraigning the accused, charge read, plea taken, trial has be-gun by taking some sort of evidence and for some reasons, trial is not completed and hence the matter has to be retried as if no evidence, both on law and on facts, has been taken.

In view of the foregoing, I am unable to accept defence submission that trial process should start from arraignment as if this Court is not ceased of the matter when clearly the charges and all other court process filed before the Failed Banks Tribunal are deemed to have been duly filed before this Court. The provision of section 2(3) of Decree No. 62 of 1999 is not inconsistent with the Constitution as all existing laws have been saved under section 315 of the 1999 Consti-tution of this country. All existing laws are deemed to be an Act of the National Assembly to the extent that it is a law with respect to any matter on which the National Assembly is empowered by the Constitution to make laws. Unless an appropriate authority under section 315(2) of the Constitu-tion by order modifies the text of any existing law, such law is duly preserved and effective.

Furthermore, Decree No. 62 of 1999 did not leave anyone in doubt hence it drew a clear distinction between a Part heard matter and a new matter. While a part heard matter is preserved under section 2(3) and (4) to the effect that it is deemed to be duly filed and all orders made thereunder, duly preserved, new proceedings under section 3(2) of the Decree provided for the bringing of new proceedings before this Court and in accordance with the rules of procedure of this Court. Section 3(2) of the Decree presupposes that certain cases are already before the Court, but, to file a new


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case, one has to do it in accordance with the rules and pro-cedure of the Federal High Court.

As for the power of the Attorney-General of the Federa-tion on public prosecution under section 174 of the 1999 Constitution, no one is doubting his unfettered powers on public prosecution. The contention by learned Counsel to the third accused person, to the effect that the Attorney-General as the sole officer in charge of criminal prosecution must decide whether or not to charge the present accused cannot stand. I have earlier ruled that the charges against the accused are saved under section 2(3) of the Decree and the import of that section is to give this Court the competence of adjudication on the case. In view of this, that contention that the court is not competent to try the case is hereby re-jected and accordingly dismissed.

As to the contention that the Attorney-General of the Fed-eration has not given his fiat to the present prosecution and hence he (the prosecution) is not competent to prosecute this case. This contention cannot stand because this is not an in-cident of private prosecution. Since the Prosecutor is prose-cuting this case on behalf of the Federal Government, he is presumed to possess the necessary authority to so prosecute. It is only the Attorney-General himself that may question what authority has been given to the Prosecutor. This is be-cause by the provision of the Constitution, he (the prosecu-tor) is prosecuting subject to the power of the Attorney-General to take over, or discontinue the case at any stage of the proceedings before Judgment. This Court cannot ques-tion that authority either.

I am at pain to agree that criminal prosecution could be done only by an officer in the department of the Attorney-General because the provision goes further to talk about any person or authority. The incidence of criminal prosecution on behalf of the Federal Government by officers other than those in the department of the Attorney-General is not new. One of such examples is the Police power to prosecute on behalf of the government under section 19 of the Police Act.


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In view of the foregoing, I have no difficulty in ruling that the present case, being part heard under section 3(1) of De-cree No. 62 of 1999, is presumed to be duly instituted under section 2(3) of the said Decree. What remains is for the Court to read the charges which have been duly preserved under section 2(3) of the Decree and the plea of each of the accused be taken, then the actual trial will begin.

This is my ruling.

[1999] 9 N.B.L.R. (FEDERAL HIGH COURT, BENIN DIVISION)


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Federal Republic of Nigeria v Alhaji Ibraham Abubakar Mohammed

FEDERAL HIGH COURT, BENIN DIVISION ADAH J Date of Judgment: 7 OCTOBER, 1999 Suit No.: FHC/B/FB/3C/99

Failed Banks Tribunal – Criminal appeal to Special Appeal Tribunal under the Failed Banks Act – Notice of appeal signed by Counsel – Whether notice vitiated Jurisdiction – Of Court – Federal High Court – Application for bail pending appeal to Court of Appeal under Failed Banks Act – Whether Court can entertain Facts The accused/applicant filed an application for bail pending his appeal to the Court of Appeal. He was convicted by the Failed Banks Tribunal, and under the old law his appeal must go to the Special Appeal Tribunal, but with the modi-fications effected under Tribunals (Certain Consequential Amendments, etc) Decree No. 62 of 1999, pending appeals went to the Court of Appeal.

The main plank of Counsel’s submission was that the ap-plicant was likely to have completed his sentence of 2 years imprisonment before the appeal was heard, and that the ap-plicant was in poor health.

The learned Counsel for the prosecution, however opposed the application principally on the ground that the notice of appeal was defective because it was not signed by the appli-cant in person but by his Counsel. The applicant’s Counsel submitted that such requirement did not obtain under the Failed Banks Decree which was in existence when the ap-peal was filed. Held – 1. Bail pending trial flows primarily from the fundamental

constitutional presumption of innocence whereby a per-son accused of an offence is presumed innocent until


Federal Republic of Nig v. Alhaji Ibraham Abubakar Mohammed 777

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proved guilty under section 36(5) of the 1999 Constitu-tion of Federal Republic of Nigeria. The moment that person’s guilt is established through the due process of law that presumption evaporates into annals of history to unfold that person’s new status as a convict.

2. Bail to a convict is never a matter of right. Before con-sidering admitting a convicted person serving a term of imprisonment for bail pending the determination of his appeal, it is necessary that the following preliminary conditions are complied with:–

(a) that the applicant has in fact lodged an appeal to the Court of Appeal which is pending;

(b) that the applicant has complied with the condition of appeal imposed, and these will show the seriousness of his application; and

(c) if the applicant was granted bail during the trial, that he has not attempted or tried to jump bail.

3. Normally a notice of appeal in a criminal appeal signed by Counsel and not the appellant himself is defective, but in cases under the Failed Banks Tribunal, as in the instant case there is no such express law directing that Notices of Appeal in criminal appeals to the Special Ap-peal Tribunal must be duly signed by the appellant in person.

4. The bail anticipated by sections 118, 123 and 125 of the Criminal Procedure Act and section 26 of the Failed Banks Decree is bail pending trial and not pending ap-peal. While bail pending trial can be considered or granted by the High Court it is only the Court of Appeal that is rightly located to hear issues of bail pending ap-peal made to it where the appeal has been entered. The High Court has no concurrent jurisdiction with the Court of Appeal over the matter. Under section 29(1) Court of Appeal Act, the Court of Appeal is directly empowered as of right to grant bail to an appellant in an appeal be-fore it pending the determination of that appeal and it is not a precondition for the exercise of that jurisdiction



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that the appellant should first make an application for bail to the court below.

5. Per curiam “Under section 29(1) of the Court of Appeal Act Cap 75

Laws of the Federation of Nigeria, 1990, the Court of Ap-peal is directly empowered as of right to grant bail to an appellant in an appeal before it pending the determination of that appeal. In State v Jammal (supra) the Court of Ap-peal considering its jurisdiction to grant bail pending appeal held in ratio 2 as follows:–

‘Under section 29(1) of the Court of Appeal Act, all that is necessary for the Court of Appeal to assume jurisdic-tion in an application for bail pending appeal is that there is a pending appeal before it and such appeal need not be an appeal against conviction. It is not a precondi-tion for the exercise of the jurisdiction of the Court of Appeal that the appellant should first make an applica-tion for bail to the Court below. In the instant case the respondent filed an appeal on which his motion for bail was predicated and had thereby fulfilled the condition that is required of him. (Mohammed v Olawunmi (1993) 4 NWLR (Part 287) 254 at 279; Ajayi v State (1977) N.C.A.R. 1 referred to).’

The jurisdiction to grant bail pending appeal over an appeal that is pending is that of the Court of Appeal and not this Court.”


Nigerian Jammal v State (1996) 9 NWLR (Part 472) 352

Nigerian statutes referred to in the judgment Court of Appeal Act Cap 75 Laws of the Federation of Ni-geria, 1990, section 29(1) Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended), section 5 Tribunals (Certain Consequential Amendment) Decree No. 62 of 1999, section 2(4)



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Counsel

For the appellant/applicant: D.F. Okungbowa, Esq. (holding the brief of E. Ofulue)

For the respondent: S.E.A. Airhia, Esq.

Judgment

ADAH J: This is an application for bail pending appeal and it was brought under sections 118, 123 and 125 of the Criminal Procedure Act, and section 26 of the Failed Banks Decree. The application is supported by a 20 paragraph affi-davit deposed to by Courage Okungbowa, a legal executive in the firm of Okungbowa and Co and a further affidavit of 7 paragraph deposed to by Daniel Iyobosa Okungbowa, Esq., the Principal Partner in the firm of Okungbowa and Co So-licitors.

The learned Counsel for the applicant Sir Ofulue stated that the applicant was convicted on the 11 December, 1998 and sentenced to two years imprisonment. That if the appel-lant/applicant is not granted bail pending his Appeal, he would have served his sentence before the appeal is heard. The learned Counsel asserted that according to prison calen-dar, 8 months represent one year and that the practice is that this bail is granted where there are exceptional circum-stances to warrant such an exercise. That the length of ser-vice and ill health offered the opportunity for the exceptional circumstances doctrine to operate in favour of the applicant. He said that the applicant has put in medical report of the Prison Doctors to show that the applicant has Chronic Peptic Ulcer and that the Certificate of the Doctor to that effect is attached. The learned Counsel asserted further that the Court of Appeal has held that ill health constitutes an exceptional circumstance. He canvassed that the sentence is too severe and discriminatory. That there were three charged. The two others were given option of a fine but the applicant was not. He relied on section 382 of the Criminal Procedure Act which gave the Court the discretion to impose fine. The learned Counsel relied on the cases of the State v Kowo


Adah J


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(1980) 1 N.C.R. 21; Onjefu v C.O.P. (1980) 1 N.C.R. 160; Sadiq v D.P.P. (Oyo State) (1980) 2 N.C.R. 65; Adio and others v The State (1980) 2 N.C.R. 239 and Gani v The State (1990) 1 NWLR (Part 127) 486. The learned Counsel for the applicant therein summarised his contention as fol-lows:– 1. The ill health of the applicant which was not chal-

lenged is an exceptional circumstance. 2. That if the applicant is not granted bail he would

have served his term therefore rendering the success of his appeal nugatory.

3. That the sentence which is too severe is likely to be altered by Court of Appeal.

4. That the sentence was discriminatory because the Court did not give an option of a fine and did not take into consideration the period of detention.

The learned Counsel for the prosecution, Mr Udenko ob-jected to the application principally on the ground that the notice of appeal is defective because it was not signed by the applicant but by his Counsel. That the law only allows the Counsel to sign notice of appeal if the appellant is insane and if the appellant is a legal person. The learned Counsel for the prosecution contended that ill health per se does not consti-tute exceptional circumstances. That the nature of treatment must be looked at like in Gani’s case. He relied on the case of Aro v Tunwashe 2 W.A.C.A. 236, to say that bail pending appeal could only be granted where the appeal will be unduly delayed and regard had to the sentence and the length of time within which the appeal will be heard. That the matters will be considered in relation one to another.

Sir Ofulue in his reply on points of law asserted that the notice of appeal was signed by Counsel because it was filed under the Failed Banks Decree.

The application under consideration here is for post con-viction bail or bail pending appeal. It is not for bail pending trial. The policy and philosophy of this type of bail differ in all dimensions from the consideration of bail pending trial.


Adah J


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For the purpose of elucidation, I must point out that bail pending trial, flows primarily from the fundamental consti-tutional presumption of innocence whereby a person accused of an offence is presumed innocent until proved guilty under section 36(5) of the 1999 Constitution of the Federal Repub-lic of Nigeria. The moment that person’s guilt is established through the due process of law that presumption evaporates into the annals of history to unfold the person’s new status as a convict. Bail to a convict is never a matter of right. It is governed by some conditions which must be available to qualify a convict for bail. These conditions must on the au-thorities of decided cases be considered before the Court ex-ercise its discretion to grant the bail. In the case of Jammal v State (1996) 9 NWLR (Part 472) 352, the Court of Appeal held in ratio (2) that:–

“Before considering admitting a convicted person serving a term of imprisonment for bail pending the determination of his appeal, it is necessary that the following preliminary conditions are com-plied with:–

(a) that the applicant has in fact lodged an appeal to the Court of Appeal which is pending;

(b) that the applicant has complied with the conditions of ap-peal imposed, and these will show the seriousness of his application; and

(c) if the applicant was granted bail during the trial, that he has not attempted or tried to jump bail.”

The applicant in the instant case was tried and convicted by the Benin Zone of the Failed Banks Tribunal and sentenced to two years imprisonment. The Failed Banks Tribunal is extinct but the decisions are alive. They were kept alive by Tribunals (Certain Consequential Amendments, etc) Decree No. 62 of 1999 which provides in section 2(4) as follows:–

“Any order, remand, decision or judgment made by a Tribunal be-fore the commencement of this Decree is hereby preserved.”

This simply means that the conviction and sentence passed on the applicant by the defunct Tribunal are actively in force. The learned Counsel for the applicant asserted that he filed an appeal under the old Failed Banks Decree. The no-tice of appeal annexed to the affidavit in this application


Adah J


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reflects that fact. By section 5 of the Failed Banks (Recov-ery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 which set up the defunct Tribunal, a convict had a right of appeal to the Special Appeal Tribunal. In fact that law provides as follows:– “5(1) A person convicted or against whom a judgment is given

under this Decree may, within 21 days of the conviction or judgment, appeal to the Special Appeal Tribunal estab-lished under the Recovery of Public Property (Special Military Tribunal) Decree 1984, as amended in accor-dance with the provisions of that Decree.

(2) The decision of the Special Appeal Tribunal shall be final and, where there is no appeal, decision of the Tribunal shall be final.”

This provision is now deleted under Tribunals (Certain Con-sequential Amendments) Decree No. 62 of 1999 but it was the law governing the case of the applicant when the appeal was filed. I made a journey to visit this law because of the need to consider whether the notice of appeal which is the corner-stone of this application is defective or not. The point of defect pointed out by Mr Udenko learned prosecuting Counsel is the signature on the notices. He complained that it was the Counsel and not the appellant in person that signed the notice of appeal. Conventionally, this objection is correct. By virtue of Order 4 Rule 4(1) of the Court of Ap-peal Rules, the Notice of Appeal must be signed by the ap-pellant himself. The position is well captioned in the case of the State v Jammal (1996) 9 NWLR (Part 473) 384 where the Court of Appeal held in ratio 7 as follows:–

“The Court ought to take judicial notice of the fact that in law, a notice of appeal in a Criminal Appeal signed by Counsel and not the appellant himself is defective. By virtue of Order 4 Rule 4(1) of the Court of Appeal Rules, the Notice of Appeal must be signed by the appellant himself and not the Counsel.”

The forum in this instant case is different. The appeal at the time it was filed was not to the Court of Appeal where the Rule applied in Jammal’s case (supra) was the law. There is no such express law directing that criminal appeals to the Special Appeal Tribunal must be duly signed by the appellant in person. Under the Decree the Tribunals were


Adah J


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free to adopt convenient means of trial without being bur-dened by conventional rules of adjudication.

It is a notable fact that there was an unbridled laxity in the normal norms of trial during the hey days of the Tribunals. The objection of the prosecuting Counsel as to the signing of the notice of appeal by applicant’s Counsel cannot therefore stand. Even after the dissolution of the Tribunal network by the Tribunals (Certain Consequential Amendments, etc) De-cree No. 62 of 1999 and the right of Appeal now vested in the Court of Appeal by section 7(1) of Decree No. 62 of 1999 the processes hitherto filed at the Tribunal before the dissolution, were saved. Section 2(3) of Decree No. 62 of 1999 reads.

“A charge, claim or court process filed before a Tribunal estab-lished under any of the enactments specified in the schedule to this Decree shall be deemed to have been duly filed or served before the Federal High Court or High Court of a State, as the case may be and such charge, claim and Court process shall be deemed amended as to title, venue and such other matter as may be appro-priate to give effect to this subsection without further assurance than this Decree.”

To my mind a Notice of Appeal filed at the Failed Banks Tribunal is deemed to be duly filed and amended mutatis mutandis to suit the new dispensation. The Notice in the in-stant case cannot therefore be voided for the purpose of it not being signed by the applicant/appellant as this was not the requirement when it was filed. A more serious obstacle which I cannot but take notice of is the fact of jurisdiction of this Court to entertain this application in the first place.

The applicant was convicted by the Failed Banks Tribunal, Benin Zone. The case was validly concluded by the Tribu-nal. It was not among those inherited from the Tribunal by this Court.

It is therefore difficult to see how this Court can assume jurisdiction over it. The bail applied for is not the type an-ticipated by sections 118, 123 and 125 of the Criminal Pro-cedure Act and section 26 of the Failed Banks Decree. Bail anticipated under those sections of the law is Bail pending


Adah J


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trial and not Bail pending appeal. While Bail pending trial can be considered or granted by this Court, it is only the Court of Appeal that is rightly located to hear issues of Bail pending appeal made to it. This Court has no concurrent ju-risdiction with the Court of Appeal over this matter of Bail pending appeal. Under section 29(1) of the Court of Appeal Act Cap 75 Laws of the Federation of Nigeria, 1990, the Court of Appeal is directly empowered as of right to grant bail to an appellant in an appeal before it pending the de-termination of that appeal. In State v Jammal (supra) the Court of Appeal considering its jurisdiction to grant bail pending appeal held in ratio 2 as follows:–

“Under section 29(1) of the Court of Appeal Act, all that is neces-sary for the Court of Appeal to assume jurisdiction in an applica-tion for bail pending appeal in that there is a pending appeal be-fore it and such appeal need not be an appeal against conviction. It is not a precondition for the exercise of the jurisdiction of the Court of Appeal that the appellant should first make an application for bail to the Court below. In the instant case the respondent filed an appeal on which his motion for bail was predicated and had thereby fulfilled the condition that is required of him. (Mohammed v Olawunmi (1993) 4 NWLR (Part 287) 254 at 279 and Ajayi v State (1977) N.C.A.R. 1 referred to).”

The jurisdiction to grant bail pending appeal over an appeal that is pending is that of the Court of Appeal and not this Court. I hold in the circumstance that I have no jurisdiction to grant this application. The application is accordingly struck out.


Star Paints Industries Ltd and another v. Mr Olu Ogunlela 785

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Star Paints Industries Ltd and another v Mr Olu Ogunlela and others

COURT OF APPEAL, LAGOS DIVISION OGUNTADE, ADEREMI, NZEAKO JJCA Date of Judgment: 12 OCTOBER, 1999 Suit No.: CA/L/75/99

Banking – Cash versus bank guarantee – Whether synony-mous

Facts The interesting facts relevant to both applications are that, the second appellant and the third respondent were at all ma-terial times both directors and shareholders of the first appel-lant – Star Paints Industries. Following a dispute between the two directors as to the manner in which the third respon-dent managed the first appellant a meeting was held between the two directors and their solicitors with a view to solving the differences.

At the end of the meeting, each had the option to buy the other out. Accordingly, the third respondent opted to relin-quish his 50% shareholding in the first appellant, and was to be paid N17 Million for the shares. It was however agreed that auditors or accountants would be called to determine the extent of the financial liability of the third respondent’s ad-ministration of the first appellant. Such amount as was as-certained to be the result of the third respondent’s misman-agement was to be deducted from the N17 Million.

Meanwhile, the N17 million was paid over to the Embassy of Lebanon (fourth respondent) which in turn deposited the money with Citi-bank (second respondent) while the report of the auditor/accountant was being expected. Two account-ants, one of them the first respondent examined the accounts of the first appellant in succession, but their findings were conflicting to some extent. The result was that the N17 mil-lion which could have gone to the third respondent could not be paid to him since his putative liability, if any remained unascertained.



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In view of the foregoing, the appellants on 22 July, 1998 took out writ of summons wherein they sought among other reliefs, a declaration that the draft report and recommenda-tion on audit and investigation dated 5 June, 1998 by the first defendant (Messrs Muyiwa Bunmi Ogunlela and Co Char-tered Accountants) was ultra vires the Terms of Reference and mandate of the said first defendant, injunction restraining all the defendants and their agents from implementing the findings and or recommendation of the said Draft Report and Recommendation dated 5 June, 1998; and order for the im-mediate appointment of a firm of reputable chartered ac-countant to reconcile the conflicting investigative audit re-ports of Abbas Jimoh and Co and Muyiwa Bunmi Ogunlela and Co so as to issue with fairness and finality a totally inde-pendent and objective report thereon; as well as an order di-recting the second respondent to trace, identify and seques-trate in an interest yielding accounts the proceeds of the N17 million pending the determination of the suit. The appellant sought for an order of injunction restraining all the defen-dants from dealing with or disbursing the sum of N17 million to any person pending the determination of the suit.

The parties subsequently filed several applications before the lower court. The third respondent’s application challeng-ing the jurisdiction of the court succeeded and the suit was accordingly dismissed with costs. Aggrieved, the appellants appealed to the Court of Appeal and prayed for an order staying the execution of the judgment.

In effect that the Court of Appeal should order that the N17 million be retained by the second respondent pending the determination of the appeal, and that same should not be paid over to the third respondent.

On his part the third respondent submitted that the funds (N17 million) be released to him in exchange for a Bank Guarantee from Universal Trust Bank. Held – Per curiam “The argument of learned Counsel for the third defen-

dant/respondent was of course plausible. He argued that the



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plaintiff/appellants stood to lose nothing by the payment of the N17 million to the third defendant/respondent since there was to be provided a Bank Guarantee for the said sum of N17 million. That argument is alluring. But the question I ask is: If a Bank Guarantee for N17 million is the same as the cash of N17 million why is it necessary to substitute one for the other?”


Nigerian Kigo (Nigeria) Ltd v Holman Bros (Nigeria) (1980) 5–7 SC 60 Shodeinde v The Registered Trustees of the Ahmadiyya Movement in Islam (1980) 1–2 SC 163

Foreign Polini v Gray (1879) 12 Ch. D 438

Nigerian statute referred to in the judgment Diplomatic Immunities and Privileges Act Cap 99 Laws of the Federation of Nigeria, 1990

Nigerian rules of court referred to in the judgment Court of Appeal Rules, 1981 (as amended), Order 3 Rule 3(4)

Judgment OGUNTADE JCA: (Delivering the lead judgment) On 11 March, 1999, the plaintiffs/appellants/applicants filed an ap-plication wherein six prayers were made. We were able to deal peremptorily with the first three of the prayers on 17 June, 1999. The more contentious prayers subsisted and were argued on. I am in this ruling reacting to Prayers 4 and 5 of the prayers on the said motion filed on 11 March, 1999 which read:– 4. An order for stay of execution and/or otherwise for the sus-

pension of the operation or enforcement, howsoever, founded upon the order of dismissal of the suit made on


Oguntade JCA


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13 November, 1998 by the lower court pending the deter-mination of the appeal filed herein.

5. An order of injunction maintaining the status quo ante, immediately prior to the ruling given on 13 November, 1998 concerning the continued sequestration with the sec-ond defendant of the N17 million in dispute pending the determination of the appeal filed herein and/or an order for the continued lodging and sequestration of the N17 million in dispute with the second defendant Bank in an interest yielding account at prime marked rate pending the final de-termination of the appeal filed herein.”

The third respondent in the application filed on 11 March, 1999 on 30 April, 1999 brought another application praying for:– 1. An order directing the second defendant/respondent to re-

lease forthwith to the third defendant/respondent the sum of N17 million together with the accrued interest which is/was the subject of an ex parte order of the Federal High Court, Lagos, Nigeria made in Suit No. FHC/L/CS/794/98 Be-tween Star Paints and another v Mr Olu Ogunlela and 3 others on 23 July, 1998 and which order was on 13 No-vember, 1998 vacated.

CONSEQUENTLY 2. An order directing the third defendant/applicant to simultane-

ously, upon receipt of the said sum of N17 million deliver to the Chief Registrar of this Honourable Court a C.U.T.B. Bank guarantee in favour of the Chief Registrar of this Honourable Court in the sum of N17 million and in the terms of exhibit J attached to the affidavit in support of this application.

The brief facts relevant to both applications may be stated thus:– The second plaintiff/appellant and the third defen-dant/respondent were both directors and shareholders in the first plaintiff/appellant company. A dispute arose between them as to manner in which the third defendant/respondent managed the first plaintiff/appellant. The competence and integrity of the third defendant/respondent were in issue. The two of them and their solicitors held a meeting on 24 February, 1998 with a view to resolving the differences. At the end of it each had the option to buy the other out. The third defendant/respondent opted to relinquish his 50% shareholding in the first plaintiff/appellant. Such amount as


Oguntade JCA


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was ascertained to be the result of the third respondent’s mismanagement was to be deducted from the N17 million. The N17 million was paid over to the Embassy of Lebanon (ie fourth respondent) which in turn deposited the money with the second defendant/respondent whilst the report of the auditor/accountant was being expected. Two accountants one of them the first defendant/respondent examined the ac-counts of the first plaintiff/appellant in succession. Their findings however were conflicting to some extent. The first of them Abass Jimoh and Co was damning to the third de-fendant/respondent. The other by the first defen-dant/respondent would appear exculpatory to some extent. The position resulting was that the N17 million which could have gone to the third respondent could not be paid to him since his putative liability, if any, remained unascertained. It was in these circumstances that the two plaintiffs/appellants on 22 July, 1998 issued their writ of summons in Suit No. FHC/L/CS/794/98 seeking the following reliefs:– 1. “A declaration that the draft report and recommendation on

audit and investigation dated 5 June, 1998 by the first de-fendant (Messrs Muyiwa Bunmi Ogunlela and Co Char-tered Accountants) is ultra vires the Terms of Reference and mandate of the said first defendant.

2. A declaration that the draft report and recommendation on audit and investigation dated 5 June, 1998 by the first de-fendant (Messrs Muyiwa Bunmi Ogunlela and Co Char-tered Accountants) is ultra vires the Terms of Reference and mandate of the said first defendant.

3. A declaration that the draft report and recommendation on audit and investigations dated 5 June, 1998 by the first de-fendant is ultra vires the enabling Resolutions of the meet-ing and minutes thereof of Tuesday 24 February, 1998.

4. A declaration that on the face of the information facts and evidence presented and/or available to the said first defen-dant the said draft report and recommendation on audit and investigation dated 5 June, 1998 by the first defendant is not a correct, true or fair statement of the matters or affairs of the subject and focus of its Terms of Reference and man-date and cannot be used or relied upon howsoever.

5. An order directing the second defendant to trace, identify, locate and sequestrate in an interest yielding account, the


Oguntade JCA


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proceeds of the total sum of N17 million paid on 24 March, 1998 by the second plaintiff’s Bank Draft No. 54681 dated 20/3/98 for N8.5 million and Bank Draft 12140 dated 20/3/98 for N8.5 million both drawn on Zenith Interna-tional Bank Limited as evidenced by the fourth defendant’s receipt dated 23 March, 1998 pending the determination of this suit.

6. An order of injunction restraining all (4) defendants, their agents, privies, servants or howsoever from taking any steps or further steps interfering or dealing with and/or otherwise all steps concerning the disbursement of the sum of N17 million or any other lesser sum of any person, party, company or insti-tution whatsoever pending the determination of this suit.

7. An order of injunction Quia-Timet restraining all (4) defen-dants, their agents, privies, servants or howsoever from tak-ing steps or further steps howsoever with regard to the use of further use, reliance upon or dealing, howsoever with or implementation of the findings and/or recommendations contained in the said draft report and recommendation on audit and investigation dated 5 June, 1998 by the said first defendant pending the determination of this suit.

8. An order for the immediate appointment of a firm of reputa-ble chartered accountants to reconcile the conflicting inves-tigative audit reports of Abass Jimoh and Co and of Muyiwa Bunmi Ogunlela and Co so as to issue with fairness and fi-nality a totally independent and object report hereon.”

The parties subsequently filed several applications before the lower court. The application relevant to the matter now before me is the one filed by the third defendant on 21 Oc-tober, 1998 asking for:– “1. An order dismissing and/or striking out the suit or in the

alternative an order striking out the reliefs as contained in the plaintiffs statement of claim to wit: I, II, III, VII and IX so far as it relates to the fourth defendant.”

The grounds for bringing the application were set out thus:– “(a) That the Honourable Court has no jurisdiction to entertain

the said claims in so far as it relates to the fourth defendant by virtue of the Diplomatic Immunities and Privileges Act Cap 99 Laws of the Federation of Nigeria, 1990.

(b) That the agreement leading to payment of N17 million to the fourth defendant in this suit was realised at the Embassy of Lebanon outside the jurisdiction of this Court.


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(c) That the cheque for the payment of the said N17 million – ‘the res’ in this case was issued in favour of the Embassy of the jurisdiction of Lebanon. An asset which is outside the jurisdiction of this Honourable Court.

(d) That the condition precedent to the payment of the said N17 million was a discretion to be undertaken by His Excellency the Ambassador of Lebanon within his Diplomatic powers.

That in the premise, this Honourable (Court) lacks jurisdic-tion to determine this suit.”

The lower court on 13 November, 1998 made its ruling on the application by the third respondent challenging its juris-diction. It concluded the ruling with these words:–

“On the 23 July, 1998 this Court made interim orders of injunc-tion, at the time of making the order the court was unaware that it lacks jurisdiction in the matter, it has now come to knowledge of the court that it has no jurisdiction in the matter therefore the order of this Court made on the 23 July, 1998 is a nullity as it was made without jurisdiction, the said order is hereby set aside and dis-charged. On the whole this application succeeds, I hold that this Court lack(s) jurisdiction to entertain this action. I hereby order as follows:–

1. That the interim order of injunction issued by this Court on the 23 July, 1998 is hereby discharged forthwith.

2. That no writ or process instituted or any summons taken out against the Embassy of Lebanon or the Ambassador of Lebanon in Nigeria shall be accepted for filing in the Regis-try of this Court.

3. The action is accordingly dismissed, a cost of N20,000 is awarded against the first and second plaintiffs to the third defendant.”

The first and second plaintiffs before the lower court have appealed against the above ruling of the lower court and have brought before us prayers for stay of execution as ear-lier set out.

At the hearing of the application Mr E.E. Ogbodi learned Counsel for the fourth respondent took the point that the ap-plication for stay of execution by the plaintiffs/appellants was an abuse of the process of the court as Counsel had not previously applied for stay of execution before the lower court.


Oguntade JCA


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Mr S.T. Chia for the plaintiffs/appellants in reply directed our attention to page 374 of the record of proceedings where the lower court specifically ordered no process against the Embassy of Lebanon shall be accepted by the registry of the court below. Order 3 Rule 3(4) of the Court of Appeal Rules, 1981 provides:– 4. “Where under these Rules an application may be made ei-

ther to the court below or to the court it shall not be made in the first instance to the court except where there are spe-cial circumstances which make it impossible or impracti-cable to apply to the court below.”

It seems to me that since the lower court had by its order in the ruling appealed against barred the registry staff from ac-cepting other processes for filing in the matter, the plain-tiffs/appellants were thus enabled to approach this Court di-rectly as there were circumstances which made it “impossible or impracticable to apply to the court below” as provided un-der Order 3 Rule 3(4) of the Court of Appeal Rules, above.

Now to the merits of the application. The plaintiffs/ appellants are praying for an order staying the execution of the judgment. But the truth is that the lower court never made any order against them in respect of which any execution is in prospect. In other words, no executory order was made by the lower court. The court had merely dismissed the claim. Approached from that angle, one gets the impression that the prayers of the plaintiffs/appellants are inappropriate.

However, it has always been recognised that a court of trial and indeed the appellate court has the jurisdiction which is inherent to ensure that the res in dispute is pre-served so that the judgment that may be given by the appel-late court is not rendered nugatory. (See Kigo (Nigeria) Ltd v Holman Bros (Nigeria) Ltd (1980) 5–7 SC. 60.) This ju-risdiction exists even where the court of trial had dismissed the case of the plaintiff.

In Shodeinde and others v The Registered Trustees of the Ahmadiyya Movement in Islam, (1980) 1/2 SC. 163 at pages 174–175 the Supreme Court in considering the basis of the


Oguntade JCA


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jurisdiction referred to the views of Jessel, M.R. in Polini v Gray (1879) 12 Ch.D. 438 at page 443:–

“The question before us is this:– An action is brought to determine the rights of claimants to a fund. The plaintiffs fail in the court of first instance and in the court of second instance, but are about, bona fide, to prosecute an appeal to the court of ultimate resort. The plaintiffs allege that that appeal will be nugatory if the fund is paid out to the defendants, and that if the plaintiffs should ulti-mately succeed in the House of Lords, that success will be useless to them unless an interim order is made for preserving the fund . . . assuming that contention to be correct in fact, the question is, whether this Court has jurisdiction to prevent such a consequence. It appears to me on principle that the court ought to possess that jurisdiction because the principle which underlies all orders for the preservation of property pending litigation is this . . . that the ulti-mately successful party is to reap the fruits of that litigation, and not obtain merely a barren success. That principle, as it appears to me, applies as much to the court of first instance and to the Court of Appeal before the second trial as to the court of last instance be-fore the hearing of the final appeal . . .”

It seems to me that it matters not how the prayer is framed whether it is one for stay of execution, or stay of proceed-ings or injunction, etc. The important thing is that arguments be directed to the court along the true situation on the ground so that the court may be placed to appreciate what is to be done in the interest of justice.

In the instant case, the plaintiffs/appellants are in effect saying that we should order that the N17 million be retained by the defendant/respondent (ie the Citi-Bank) pending the determination of the appeal and that the same be not paid over to the third defendant/respondent. The third defen-dant/respondent on the other hand wants us to order the re-lease of the funds to him in exchange for a Bank guarantee from U.T.B.

I have reflected very anxiously about the positions of the two parties concerned here. The position of the third defen-dant/respondent is unenviable and difficult. He had relin-quished his shares in the first plaintiff/appellant company in the hope that he would be paid the value of N17 million for the shares. As the situation is, he is not in possession of the


Oguntade JCA


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shares nor the money value for it. The plaintiffs/appellants on the other hand have made the point that if we allow the third defendant/respondent to collect the money, we would have determined one leg of the substantive claims ie leg 7 of the claims which asks for an injunction restraining all the defendants particularly the second and fourth from releasing or parting with the N17 million or any lesser sum in its pos-session.

It seems to me that I ought not to make an order which may in its effect confront the lower court with a fait accom-pli in the event I hold in the appeal that the lower court ought not to have dismissed the plaintiffs/appellant’s claims. It is correct that the appeal before us is only to decide whether the lower court was right or not to have declined jurisdiction in the matter. But inferentially the entitlement to the N17 million is also a res because if I allowed the N17 million to be paid out to the third defendant/respondent/ applicant I would have determined the seventh of the sub-stantive claims.

The argument of the learned Counsel for the third defen-dant/respondent was of course plausible. He argued that the plaintiffs/appellants stood to lose nothing by the payment of the N17 million to the third defendant/respondent since there was to be provided a bank guarantee for the said sum of N17 million. That argument is alluring. But the question I ask is if a bank guarantee for N17 million is the same as the cash of N17 million why is it necessary to substitute one for the other? Further, it seems to me that it is not wise at this stage to make any order which in its effect may amount to a decree of specific performance of the agreement between the parties as to acceptance by the third defen-dant/respondent of N17 million in exchange for the 50% shares in the first plaintiff/appellant company. This is the more so when a fundamental aspect of the amount due to the third defendant/respondent – the ascertainment of the amount to be deducted from the N17 million which was to be the result of the work of audit and inspection of financial records of the first plaintiff/appellant company is mired in so much controversy and uncertainty.


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In the final result, it seems right and equitable in my view to hold the parties to the same position they were at the commencement of the litigation which is that the second de-fendant/respondent continues to keep the N17 million pend-ing the determination of the appeal. The motion by the plain-tiffs/appellants succeeds. The motion by the third defen-dant/respondent fails and is dismissed.

When these motions by the parties were being argued, we suggested to the parties the necessity to proceed expedi-tiously with the hearing of the appeal in lieu of this applica-tion. Counsel did not seem to have seen the wisdom in our suggestion. That offer is still open and we are willing to hear the appeal speedily if Counsel show inclination for an abridgment of their periods of filling briefs. ADEREMI JCA: I have before now had the privilege of reading in advance the ruling just delivered by my learned brother Oguntade, JCA. I agree with his reasoning and con-clusions.

By way of emphasis only I wish to say that until substan-tive claims in a suit are heard on their merits and pro-nounced upon nothing must be seen to be done that suggests a pre-emptive determination of same in an application in which a point of law as to the legality of the claims is not raised. The application before us is an invitation to do that. The justice of the whole matter, will in my view, find ex-pression in an expeditious hearing of the appeal. NZEAKO JCA: I am in complete agreement with the reason-ing and conclusions reached in the ruling just delivered by my learned brother Oguntade, JCA.

I also adopt the orders made therein as mine. Application allowed.



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Ademola Ekeolere v Union Bank of (Nigeria) Plc HIGH COURT, LAGOS STATE FAFIADE J Date of Judgment: 26 OCTOBER, 1999 Suit No.: LD/730/94

Banking – Account – Account in credit – When Bank may close – Duty of Bank before closing Banking – Account – Closing of – Principles governing Banking – Account – Oral instruction to close – Whether customer can give – Relevant considerations Banking – Banker and customer relationship – How deter-mined Banking – Demand of money from bank – Whether to be made before issue of writ Banking – Deposit account – Implication of Banking – Duties of bank to customers Banking – Saving Account – Passbook – Phrase “this docu-ment is valuable and personal to you . . .” on passbook – Whether prevents a third party from holding the passbook – Relevant considerations Facts The plaintiff by his amended statement of claim claimed as follows:– “(i) A Declaration that the defendant is in breach of its fiduci-

ary duties between a bank and its customers – the plaintiff in this case.

(ii) An Order directing the defendant to credit forthwith Savings Account of the plaintiff no. 13: 069 kept and operated at the defendant’s Oyingbo Branch with the sum of N18,746.11k being the last known balance in the account as 27 June, 1988 up to 10 January, 1995 and from thereon at the rate of 21% per annum from 27 June, 1988 up to 10 January, 1995 and from thereon at the rate of 21% per annum until judgment and also the sum of N10,000 plus interest at the same rate from 28 April, 1992 up to 10 January, 1995 and thereafter at the rate of 21% per annum until judgment.


Ademola Ekeolere v. Union Bank of (Nigeria) Plc 797

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(iii) Special Damages Particulars

Cost of flight tickets on two trips from London to Lagos in 1992 and in 1994 – £924 at the rate of £462 per trip and fur-ther sum of £924 as cost of subsequent trips that were made towards the prosecution of this matter due to the negligence of the defendant.

(iv) General damages in the sum of N500,000 for total embar-rassment, humiliation and deprivation to operate his Sav-ings Account since 1992.

(v) Cost assessed at N10,000.”

In proof of his claim, he testified that he opened a Savings Account with the defendant in 1978, and while he was abroad, he sent a friend with his passbook to deposit a sum of N10,000 into that account, which the friend did. The de-fendant however impounded the passbook and gave that friend a letter to that effect.

When this was communicated to the plaintiff he wrote the defendant demanding the cause of such action and he was asked to send his right finger print through his bank in Lon-don.

After a protracted time and the issue was not resolved to the satisfaction of the plaintiff, he had to travel back to Nigeria to see the defendant who told him that his account was being investigated for fraud, which of course had nothing to do with him. The plaintiff claimed that he was put through an embar-rassing and harrowing experience by the defendants, who eventually told him that they had closed his savings account and the money there transferred to a special savings account in his name. This was done without his consent. Hence he had brought this action claiming as in his writ.

The defendants in their defence admitted the impounding of the passbook because they were investigating a fraud commit-ted on the account by their own staff and that since account, had been computerised there had been no necessity for pass-book, and that the account was closed at plaintiff’s request.



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Held – 1. When an account is in credit, it may be closed for the

following reasons:– (i) dormancy; (ii) drawing out the whole amount; (iii) transfer of the balance at the customer’s request to

another branch or bank; or (iv) unsatisfactory nature of an account. 2. In practice, relationship of banker and customer can

properly be determined by:– (a) mutual agreement; (b) notice given by the customer or banker; (c) death of customer; (d) mental disorder of the customer; (e) bankruptcy or winding up of either party. 3. A customer can give an oral instruction to have his ac-

count closed at once; although he would not be able to take out whatever remains as credit therein until a proper settlement of obligation on both sides is carried out.

4. When a banker decides to have the account of a cus-tomer closed, he must give the customer reasonable no-tice in case there are outstanding cheques to be cleared or some business the customer intends to conclude through the bank account. The customer must therefore be given time by the banker to make such arrangements as are necessary to protect his credit and credibility.

5. In the instant case the defendant at no time communi-cated its intention to close plaintiff’s account to plaintiff nor was there any evidence that plaintiff instructed the defendant to close the account. Hence the closing of the saving account and placing plaintiff’s money in a de-posit account was without plaintiff’s authority and is not in accordance with banking practice.

6. Bankers owe their customers duties:– (i) to receive money, cheques and other instruments;



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(ii) to pay cheques and other withdrawal authorities properly drawn by the customer during banking hours at the branch where the account is kept or elsewhere as agreed;

(iii) to maintain secrecy concerning the customer’s ac-count and other affairs;

(iv) to give reasonable notice to a customer before clos-ing his account, especially a credit account;

(v) to pay agreed interest on deposits and to ensure that the customer’s money is safe;

(vi) to avoid wrongful dishonour of his customer’s cheques;

(vii) to render statement of account to the customer pe-riodically or upon request;

(viii) to exercise proper care and skill in carrying out any business he had agreed to transact for his customer.

7. The advantage that a customer gains by opening a de-posit account is that the banker pays interest on the sum paid into such account. The existence of a deposit ac-count per se involves the payment of interest.

8. Where a debt or liquidated demand is due and payable at the date of the issue of the writ, no previous demand for payment is necessary since the service of the writ itself constitutes such demand.

9. Per curiam “As to (a) I am unable to read the meaning imputed by

Counsel to the notice ‘This document is valuable and per-sonal to you. You should therefore keep it safe all the time’. I do not see where it prevented a third party from holding the passbook moreso when the evidence of defence witness is that Mr Ajose came to lodge a payment in the account, and second defence witness admitted, people apart from ac-count owners do come to pay deposits on behalf of account owners. I do not see the relevance of paragraphs 33–318 and 319 of Chitty on Contract pages 345–346. I have no evidence that Mr Ajose came to the bank with plaintiff’s passbook to withdraw any money or deal with the passbook in an adverse manner.



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On (b) that is change of address, I am unable to accept Counsel’s submission that the passbook was retained by de-fendant because plaintiff failed to inform defendant about his change of address exhibit A belies this, exhibit A said the passbook is being held by defendant as some investiga-tions are being carried out on the account. What is more, defendant subsequently wrote plaintiff at his new address and did not complain in any of their letters to plaintiff about change of address. I found both reasons an after thought. defendant further told the court it informed plain-tiff, defendant computerised its operation of savings ac-count during investigation of fraud in the account and plaintiff was notified when plaintiff visited the bank. There was therefore no need for use of passbook to him. This is unbelievable. Defence witness went through the (sic) of how to open a computerised savings account. The defen-dant’s witness told the court she informed plaintiff that ac-counts had been computerised. defendant did not think plaintiff’s account should be computerised when plaintiff was in the bank and return his passbook. Like I said above, it cannot be true and is not true that plaintiff’s passbook was not returned to him for the reasons afforded, but for the reason that defendant was investigating an internal fraud which fraud defendant told plaintiff did not concern him. Yet defendant as a result of plaintiff’s letter exhibit K wrote exhibit G, exhibit K is dated 3 August, 1992 while exhibit G is dated 14 April, 1993. Exhibit G emanated from defen-dant after plaintiff’s letter dated 17 June, 1992, plaintiff’s letter dated 16 July, 1992, a reminder from the solicitor dated 16 December, 1992 plaintiff’s letter dated 3 August, 1992. defendant claimed to have written exhibit G dated 14 April, 1993 as per instruction of plaintiff in exhibit K re-questing that his account be closed.”

Finding for the plaintiff.


Nigerian

Agage v Malami (1992) 9 NWLR (Part 264) 242

Stephen Industries Limited v Bank of Credit and Commerce Limited (1999) 11 NWLR (Part 625) 29



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Books referred to in the judgment Adekanye Femi: Elements of Banking in Nigeria (3ed) page 245, paragraphs 14–19 Chitty on Contract, pages 345–346

Counsel For the plaintiff: I.M. Elueze For the defendant: Mr Ogundana

Judgment FAFIADE J: The plaintiff by his amended statement of claim claims:– (i) A Declaration that the defendant is in breach of its fiduciary

duties between a Bank and its customers – the plaintiff in this case.

(ii) An Order directing the defendant to credit forthwith Savings Account of the plaintiff no. 13: 069 kept and operated at the defendant’s Oyingbo Branch with the sum of N18,746.11k being the last known balance in the account as at 27 June, 1988 up to 10 January, 1995 and from thereon at the rate of 21% per annum from 27 June, 1988 up to 10 January, 1995 and from thereon at the rate of 21% per annum until judg-ment and also the sum of N10,000 plus interest at the same rate from 28 April, 1992 up to 10 January, 1995 and thereaf-ter at the rate of 21% per annum until judgment.

(iii) Special Damages Particulars

Cost of flight tickets on two trips from London to Lagos in 1992 and in 1994 – £924 at the rate of £462 per trip and fur-ther sum of £924 as cost of subsequent trips that were made towards the prosecution of this matter due to the negligence of the defendant.

(iv) General damages in the sum of N500,000 for total embar-rassment, humiliation and deprivation to operate his Sav-ings Account since 1992.

(v) Cost assessed at N10,000. In proof of these claims are a 16 paragraph amended state-ment of claim and oral evidence adduced by plaintiff. defen-dant filed a 14 paragraph amended statement of defence and called two witnesses.


Fafiade J


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The plaintiff in his oral evidence told the Court he opened a Savings Account with defendant in 1978. In 1992 he sent a friend with his passbook to deposit N10,000 in the Savings Account. The friend whose name is Ajose returned without his passbook. There was a report from Ajose that defendant seized the passbook after payment and gave him a letter to that effect from defendant. The defendant wrote another letter demanding his right finger print through his bank in London. He did (sic) defendant wrote another letter complaining that the finger print was not clear enough. The defendant in that letter enquired as to the nature of his work, and his em-ployer’s name, defendant said in that letter his account was being investigated for fraudulent practices. On receiving de-fendant’s third letter, he consulted with his employers and decided to come to Lagos in order to exonerate himself in view of the nature of his job. He works as Deputy Manager in Ward dealing with Psychiatric cases (mental offenders) in Hackney Hospital, London. On arriving in Nigeria he went to defendant Bank and requested to know what was happen-ing to his account. He spoke with one Mrs Adewunmi who requested for his finger print. Having given his finger print, Mrs Adewunmi told him the issue that someone went into his account had nothing to do with him as some members of staff were involved in the fraudulent act and the members of staff have been transferred from the branch. Mrs Ade-wunmi sent her to another Manager who interrogated him as to whether he sent anyone to collect money from his account. He said no as no one can take money from his account without his passbook and such withdrawal must be recorded in the passbook. His photograph and finger print were taken. He was asked to sit outside while investigation continued. Two hours later he was invited for another inter-rogation asking the same set of questions again. He got infuriated and humiliated. The matter was not settled that day. The Manager tried to intimidate him and warned him not to pursue the matter legally. He consulted a solicitor who wrote the defendant two letters to which no reply was given. Defendant eventually wrote his lawyer two letters in which defendant said they were still investigating. Even when this


Fafiade J


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action was filed investigation had not been completed. He got a letter which stated that £20,000 had been paid into a special savings account in his name. He gave no instruction for the account to be opened for him, or his account to be closed. He expected an apology from defendant on the alle-gation of fraudulent practices levelled against him by de-fendant. He would have accepted the apology. He also ex-pected defendant to ask if he wanted to continue operation of the account. He had travelled four times into Nigeria in respect of his account. Each flight cost him £462. He has many things to protect by this action:– (1) his job as a forensic psychiatrist. (2) his name which is more than spent (sic) on flying

home. He therefore wants the court to give an order that his name be cleared; order his money plus inter-est which must have accrued on it; cost of his flight tickets which is £462 in four places; N5m for dam-ages done to his integrity. Witness tendered letters exhibits A–G and 4 flight tickets exhibits H–H3.

Cross-examined plaintiff admitted he gave the passbook to Mr Ajose. He did not know the entries in the passbook. The defendant did not write (sic) him when defendant found his passbook with Mr Ajose. The defendants wrote exhibits A, B and D demanding for finger prints. The defendants did not invite him to Nigeria, but the invitation is implied. He still did not know the result of defendant’s investigation. He was not consulted before exhibit G was written. He wrote a letter to his lawyer objecting to the deposit account suggested in exhibit G as it is different from savings account. He could only say when he last operated account before Ajose paid in N10,000 if he sees the passbook. He would not know if any conditions are attached to the passbook. He was in Nigeria when he opened the account. He did not inform defendant when he travelled abroad. Re-examined, plaintiff said Ajose was in lawful possession of his passbook. He objected to exhibit G when he came to court. First defence witness a staff of defendant knew from records that plaintiff is a saving account customer of defendant bank. The plaintiff’s


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original passbook is in custody of the management of the bank and it can be produced. She was however unable to produce the passbook, photocopy was therefore admitted. Witness said it was necessary to withhold plaintiff’s pass-book because of the fraud perpetrated in the account. She also told the court that the passbook was found in the hand of a third party Mr Ajose. The passbook on page 2 con-tained a recording that plaintiff should keep the passbook himself and not give it to a third party. After defendant de-cided to hold the passbook, defendant wrote plaintiff to say fraud in the account is being investigated. The defendant requested for plaintiff’s finger print, defendant did not invite plaintiff to come to Nigeria. The finding of their investiga-tion was conveyed to plaintiff in exhibit G. By rules and regulations of the Central Bank of Nigeria, interest rate can be varied. Exhibit J gives the rules and regulations about in-terest. Exhibit J regulation refers. The sum of N20,138.43 was put in a short term yielding interest account as the bank had stopped using passbook as saving accounts have been computerised. The plaintiff has not suffered any loss of in-terest by putting his money in short term interest yielding account. Plaintiff paid N100 into his account on 28 Novem-ber, 1988 and N10,000 in April, 1992. The account was not operated for four years. N20,138.43 was standing in favour of plaintiff when this action was brought, interest was N9,159 plus N10,000 paid by Ajose. The defendant owes plaintiff the amounts stated above. Defendant is not liable to plaintiff for his flight tickets. The defendant is not liable for general damages.

Cross-examined, witness said she was not in the branch when this incident occurred she therefore would not know the physical harassment plaintiff suffered. She admitted plaintiff’s passbook was not returned to him. Accounts had been computerised, passbooks are therefore no more in use. plaintiff was not informed because plaintiff was not around, and it was not conveyed to him in exhibit D because his ac-count was being investigated. She admitted the fraudulent withdrawal from the account was not by plaintiff but this was not communicated to him. She admitted defendant


Fafiade J


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should have communicated their findings to plaintiff. The plaintiff did not authorise the short term deposit account opened for him and did not give instruction to close his sav-ings account. The amount in the account in 1988 was N17,554.70k roughly 6 years later in 1994 it was N20,138.43 as interest rate was 13% per annum. She was in banking industry between 1993 and 1996 and she was aware of deregulation in interest rate. She was also aware that in-terest rate went up to 40%. In order to get the correct thumb print, defendant required plaintiff to get the print supervised by his overseas bankers. She admitted finger prints were re-quested for twice not thrice. She admitted defendant said in exhibit G that investigation had not been completed. Al-though plaintiff was not expected to fold his arms, defendant expected him to exercise patience until investigation is com-pleted. Witness agreed plaintiff had not been able to operate his account because it has been closed.

The second defence witness told the court she was embar-rassed when she saw plaintiff’s passbook on 28 April, 1992. One Ajose came to pay N10,000 into the account. Fraud committed by some of the staff was being investigated at that time. She wrote the letters exhibits A and B to plaintiff. The defendant requested for plaintiff’s finger impression he was not asked to report at the bank. She met plaintiff on 3 August, 1992 and she explained that what happened did not concern plaintiff. She and the Manager pleaded with plain-tiff to be patient while necessary steps are being taken. plaintiff did not complain about humiliation in his letter ex-hibit K. She and the Manager wrote other letters to plaintiff and they apologised to plaintiff for any inconvenience plain-tiff might have suffered. They wrote exhibit G because plaintiff request for his money in exhibit K. Plaintiff did not reply exhibit G. Witness admitted plaintiff’s account must be credited with any money fraudulently withdrawn from the account since he had no hand in the fraud. Interest rate on short term deposit is higher than that of savings deposit. plaintiff suffered no damages. No withdrawal request by plaintiff was turned down and there was no attempt to pay by plaintiff turn down by defendant. Interest on the account


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was worked up to 1995 amounting to N29,157. Interest on N10,000 was set aside. Plaintiff is not entitled to any other claim apart from interest on the account. Cross-examined, witness admitted defendant realised plaintiff was not in-volved in any fraudulent act before plaintiff came to them. The purpose of requesting for his thumbprint is to be doubly sure. Exhibits B and C were written before plaintiff came to the bank. Plaintiff thumbprint in the bank in August, 1992. The word dispute in exhibit J did not concern plaintiff. Plaintiff’s money was put in suspense account because the bank had gone computerised. Plaintiff wrote a letter telling the bank he needed his money. By that letter, plaintiff was closing his account, hence the payment into a suspense ac-count. She presumed plaintiff in that letter was instructing defendant to close his account. She did not know how long plaintiff had to wait that day as she left him with the Man-ager to attend to other customers. After collecting the pass-book and money from Ajose, Ajose did not have to involve law enforcement agent before he was given the letter to take to plaintiff. Ajose collected the letter the third day. From the facts reviewed, both plaintiff and defendant agreed:– 1. That plaintiff opened in 1978 a Savings Account

with defendant Branch at Oyingbo in 1978. 2. That plaintiff was issued a passbook. 3. That the account was last operated in 1988 until

April, 1992 when plaintiff through one Mr Ajose sent N10,000 to be paid into his account. He gave Ajose his passbook.

4. It is not in dispute that the defendant through its members of staff seized plaintiff’s passbook after accepting the deposit.

5. The defendant confirmed retaining the passbook by its letter dated 30 April, 1992 – exhibit A and prom-ised to forward the passbook duly updated as soon as they are through with it. Defendant in that letter said the passbook is being (sic) because some inves-tigation is being carried out on the account.


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6. The defendant admitted fraudulent withdrawal was made from the account and the fraud was not com-mitted by plaintiff.

7. The defendant admitted plaintiff’s account was closed and an amount of money from the account was paid into a short term interest yielding deposit account.

8. The defendant failed to return to plaintiff his pass-book. Counsel for plaintiff expatiated on issues for determination:–

1. Was plaintiff’s account closed by defendant in accordance with the rules and practice of bank-ing in Nigeria.

2. Does the defendant owe its customers any duty regarding the operation of the customers ac-count. If the above two questions are answered in the affirmative, would plaintiff be entitled to damages for the arbitrariness of defendant in closing plaintiff’s account?

3. Has plaintiff made out a case against defendant regarding his allegation of humiliation and in-timidation?

4. The above issues, if taken together and founded upon would that entitle plaintiff to claim special damages in respect of costs incurred in remedy-ing the situation.

Counsel for defence on the other hand chose to deal with plaintiff’s claims as itemised. I intend to go through the per-tinent issues in submission by defence Counsel for it. Coun-sel made a weather of the terms and regulations governing the said account, that is terms stated in the passbook espe-cially:– (a) that plaintiff failed to notify defendant of his change

of address; (b) that the passbook was found in possession of a third

party, that is Mr Ajose.


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As to (a) I am unable to read the meaning imputed by Counsel to the notice “This document is valuable and personal to you. You should therefore keep it safe all the time”. I do not see where it prevented a third party from holding the passbook moreso when the evidence of defence witness is that Mr Ajose came to lodge a payment in the account, and second defence witness admitted, people apart from account owners do come to pay deposits on behalf of account owners. I do not see the relevance of paragraphs 33–318 and 319 of Chitty on Contract pages 345–346. I have no evidence that Mr Ajose came to the bank with plaintiff’s passbook to withdraw any money or deal with the passbook in an adverse manner.

On (b) that is change of address, I am unable to accept Counsel’s submission that the passbook was retained by de-fendant because plaintiff failed to inform defendant about his change of address, exhibit A belies this. Exhibit A said the passbook is being held by defendant as some investiga-tions are being carried out on the account. What is more, de-fendant subsequently wrote plaintiff at his new address and did not complain in any of their letters to plaintiff about change of address. I found both reasons an after-thought. The defendant further told the court it informed plaintiff, defendant computerised its operation of savings account during investigation of fraud in the account and plaintiff was notified when plaintiff visited the bank. There was therefore no need for use of passbook to him. This is unbe-lievable. Defence witness went through the (sic) of how to open a computerised savings account. The defendant’s wit-ness told the court she informed plaintiff that accounts had been computerised. The defendant did not think plaintiff’s account should be computerised when plaintiff was in the bank and return his passbook. Like I said above, it cannot be true and is not true that plaintiff’s passbook was not re-turned to him for the reasons afforded, but for the reason that defendant was investigating an internal fraud which fraud defendant told plaintiff did not concern him. Yet de-fendant as a result of plaintiff’s letter exhibit K wrote ex-hibit G, exhibit K is dated 3 August, 1992 while exhibit G is dated 14 April, 1993. Exhibit G emanated from defendant


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after plaintiff’s letter dated 17 June, 1992, plaintiff’s letter dated 16 July, 1992, a reminder from the solicitor dated 16 December, 1992 plaintiff’s letter dated 3 August, 1992. The defendant claimed to have written exhibit G dated 14 April, 1993 as per instruction of plaintiff in exhibit K requesting that his account be closed. I now quote the relevant portion of plaintiff’s letter exhibit K on which defendant’s assump-tion was based.

The Manager, Union Bank of Nigeria, Oyingbo Branch, Ebute-Metta, Lagos.

Re: My Saving Account No. 1306915 This is to inform you about an incidence that occurred on the 28 April, 1992 in which I sent somebody to pay N10,000 into my account and to my knowledge my passbook withheld. I.........................came to Nigeria and met the Manager who told me that my account has been closed. This is to say that this is not to my knowledge and that at no time did I close my account. How-ever, I will like the bank to do the necessary thing to update my account as I need my money ............................. The plaintiff by this letter had quarrelled and contested the closure of his account. That letter was dated 3 August, 1992. Yet defen-dant witness told the court exhibit G was written because defen-dant had closed his account when he said he needed his money. The plaintiff told the court he at no time instructed that the account be closed. He was emphatic about this in exhibit K and he did not authorise the deposit account opened. This brings me to the first issue canvassed by plaintiff’s Counsel. Was plaintiff’s Savings Account closed by defendant in accordance with the rules and practice of Banking in Nigeria? I refer to the Elements of Banking in Nigeria (3ed) by Femi Adekanye page 245 paragraph 14-9 on Procedure for Closing an account. It says: When an account is in credit it may be closed for the following reasons:–

(i) Dormancy; (ii) drawing out the whole amount; (iii) transfer of the balance at the customer’s request to another

branch or bank; or (iv) unsatisfactory nature of an account.


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I have no evidence that the account was dormant I also have no evidence that defendant contacted plaintiff and suggested that the account be closed as it does not appear to be needed any more. It is quite clear that as at 30 April, 1992 when ex-hibit A was written that there was an account which was be-ing investigated. None of the other three conditions existed when exhibit G was written on 14 April, 1993. In Stephen Industries Limited and another v Bank of Credit and Com-merce Limited and another (1999) 11 NWLR (Part 625) 29 at 30 ratio 1 holds that in practice relationship of banker and customer can properly be determined by:– (a) mutual agreement; (b) notice given by the customer or banker; (c) death of customer; (d) mental disorder of the customer; (e) bankruptcy or winding up of either party. A customer can give an oral instruction to have his account closed at once; although he would not be able to take out whatever remains as credit therein until a proper settlement of obligation on both sides is carried out. Ratio 4 held that when a banker decides to have the account of a customer closed, he must give the customer reasonable notice in case there are outstanding cheques to be cleared or some busi-ness the customer intends to conclude through the bank ac-count. The customer must therefore be given time by the banker to make such arrangements as are necessary to pro-tect his credit and credibility.

It is clear from the facts of this case that defendant at no time communicated its intention to close plaintiff’s account to plaintiff. Furthermore, there is no evidence that plaintiff gave defendant instruction to close the account. I do not ac-cept defence witness evidence that the plaintiff at any time closed his account. The defendant’s act of closing the sav-ings account and placing plaintiff’s money in a deposit ac-count, I find was without plaintiff’s authority and is not in accordance with banking practice. Bankers of course owe their customers duties:– (i) to receive money, cheques and other instruments;


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(ii) to pay cheques and other withdrawal authorities properly drawn by the customer during banking hours at the branch where the account is kept or elsewhere as agreed;

(iii) to maintain secrecy concerning the customer’s ac-count and other affairs;

(iv) to give reasonable notice to a customer before clos-ing his account, especially a credit account;

(v) to pay agreed interest on deposits and to ensure that the customer’s money is safe;

(vi) to avoid wrongful dishonour of his customer’s cheques;

(vii) to render statement of account to the customer peri-odically or upon request;

(viii) to exercise proper care and skill in carrying out any business he had agreed to transact for his customer.

What is in issue in this matter is the closing of plaintiff’s ac-count. The defendant’s allegation that it was plaintiff who closed his account has been found not to be true above. It is evident that defendant on its own volition decided to place the money in another account after holding plaintiff in sus-pense for 13 months. Exhibit G which subsequently in-formed plaintiff of the closure of his account failed to dis-close to plaintiff why his savings account was closed. The fraud which was still investigated as at 14 April, 1993 when exhibit G was written we were told in court was committed by staff of defendant and not by plaintiff. If defendant owes plaintiff the duty to give plaintiff reasonable notice before closing his account, I find breached that intention to close the account. I find the account was wrongly closed. Fur-thermore, plaintiff canvassed the issue of negligence. On defendant’s part there is no doubt that defendant lacked the vigilance which his duty of care on plaintiff’s account re-quires. Defendant was not aware of any fraud in the account until Mr Ajose came to lodge the N10,000 and if it did, in spite of the fact that there was no evidence of any with-drawal from the plaintiff’s book, defendant’s immediate


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reaction was to pounce on plaintiff. The evidence speaks for itself as it was found that the fraud was an internal one.

In Agage v Malami (1992) 9 NWLR (Part 264) 242 at 255 Ratio, the Court of Appeal held that the advantage that a cus-tomer gains by opening a deposit account is that the banker pays interest on the sum paid into such account. The exis-tence of a deposit account per se involves the payment of in-terest. It is defence witness evidence that plaintiff’s money was paid into a deposit account which is yielding interest. The amount alleged paid was N20,138.43k. There was no evidence as to how they arrived at this amount. A photocopy of the passbook was tendered which showed a balance of N17,554 as at 28 November, 1988. First and foremost, de-fendant admitted plaintiff is entitled to interest on his total money as at 28 April, 1992 when the last deposit was made. It is the evidence of defence witness that the money was paid into an interest yielding account. The last entry in exhibit J photocopy of the passbook is N17,554.70k. The plaintiff however is claiming the last known balance to be N18,746.11k as at 27 June, 1988. defendant in the letter ex-hibit G said plaintiff’s money was N20,128.43, that was in April, 1993. The second defence witness said after working the interest up to 1995 plaintiff’s money amounted to N29,157. Interest then was 13% per annum. She later said the interest on N10,000 paid was set aside. It is quite clear from exhibit J and evidence of both witnesses that the witnesses are not seized of the real amount due to plaintiff. Defendant having admitted that plaintiff is entitled to interest, I find plaintiff is entitled to interest on his account from 22 Novem-ber, 1988 when the last interest was entered in exhibit J until the money is restored into plaintiff’s saving account which I have found was wrongly closed by defendant. Interest pay-able shall be at Central Bank of Nigeria rate from 1 January, 1994 when interest was deregulated which was then 21% per annum. Interest from 28 November, 1988 shall be at 13% per annum until 28 April, 1992 when Mr Ajose paid N10,000 into the account. Interest on the amount in the account with interest already calculated plus the N10,000 shall be at 25% p.a. from 28 April, 1992 until 31 December, 1993. Judgment is hereby entered accordingly.


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The plaintiff claims as special damages costs of four flight tickets for his trips to Nigeria on enquiries about his account and in prosecuting this action. The plaintiff tendered stumps of his flight ticket. There is evidence from defence witness that plaintiff was in the bank on 3 August, 1992. The plain-tiff’s Counsel on 9 June, 1998 told the court plaintiff was in Nigeria in January, 1998 when he believed the trial was to commence and defence Counsel saw plaintiff. The plaintiff was in court on 26 November, 1998 and he gave evidence. There is no doubt that these flights were necessitated by failure of defendant to do his duty on defendant’s account. First is the issue of the fraud discovered on the account which fraud was said to have been perpetrated by members of staff of defendants. Next is the continuous retention of plaintiff’s passbook even after he had travelled all the way from London to make enquiries on the account. Thirdly, de-fence witness told the court she retained the passbook be-cause she had told plaintiff that accounts had been comput-erised, yet in spite of signatures, finger prints and photo-graph of plaintiff taken during his visit to the bank, defen-dant did not computerise this account, rather they closed it. I shall deal with the issue of humiliation, indignity plaintiff alleged he suffered at the bank when he called there. The plaintiff’s statement of claim was amended in line with evi-dence adduced by plaintiff in this regard. Defence Counsel made extensive submission on the admissibility of this evi-dence. He submitted that since the amendment to claim cre-ated a new cause of action, the writ of summons should be amended. Can the evidence on humiliation be a new cause of action? Can this allegation of humiliation be said to be independent of the breach committed by defendant?

Can it be said to have arisen naturally from the breach? I hasten to answer that the allegation is the result of defen-dant’s breach which caused plaintiff to travel all the way to Nigeria from London. A situation where defendant:– (1) seized plaintiff’s passbook; (2) requested for plaintiff’s finger prints twice and on

the third occasion required plaintiff to produce a


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finger print under the supervision of his bank. That plaintiff would travel to Nigeria should have been envisaged and anticipated and when plaintiff eventu-ally surfaced in defendant’s bank on 3 August, 1992 over three months after the seisure, plaintiff’s reac-tion should have been anticipated moreso when fraud was being investigated. It is necessary to note that even in April, 1993 when the defendant wrote exhibit G. They were yet to conclude investigation and no report of the investigation was even made to plaintiff to date. None was produced in court, plaintiff’s pass-book was not produced in court. I cannot see defence Counsel objecting to the pleadings to which defen-dant reacted and joined issues, and defendant witness gave evidence. The plaintiff’s reaction to defendant’s action by coming to Nigeria on 3 August, 1992 I find arose naturally from defendant’s action. This action in court of course was borne out of defendant’s re-fusal to allow plaintiff to operate his account. The plaintiff’s claim for the damages for flight tickets and the allegation of humiliation I find are causes of ac-tion arising from defendants breach of contract for which defendant should be liable in damages.

The issue of demand of course was put to rest by the deci-sion in Agaga v Malami cited above. It was held in Ratio 6 page 245 that where a debt or liquidated demand is due and payable at the date of the issue of the writ no previous de-mand for payment is necessary since the service of the writ itself constitutes such demand.

General damages is such a loss which flows naturally from the defendant’s account. I have found above the plaintiff’s claim for general damages flows naturally from defendant’s account. defendant is therefore liable to pay plaintiff dam-ages which is hereby assessed at N150,000. The judgment of this Court is therefore as follows:– 1. Having found that defendant closed plaintiff’s account

without his consent and proper notice to plaintiff, defendant is hereby ordered to credit defendant’s Saving Account


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No. 13.069 in its computerised status with the sum of N17,554.70k in exhibit J with interest as calculated earlier in this judgment; or in the alternative pay plaintiff the total calculated amount with:–

(a) N150,000 general damages awarded above. (b) N5,000 costs.



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United Bank for Africa Plc v Daniel Holdings Ltd

COURT OF APPEAL, LAGOS DIVISION IGE, GALADIMA, SANUSI JJCA Date of Judgment: 24 NOVEMBER, 1999 Suit No.: CA/L/315/97

Banking – Deposit of money into bank – On whom lies the onus – Whether onus of proof is static

Banking – Deposit of money into bank account – Receipt of – How proved – Whether the stamping and initials on the pay-in-slips constitutes evidence of receipt

Banking – Money had and received – Action against a bank – Whether negligence of a bank is an essential element of liability

Facts The plaintiff/respondent was a customer of the defen-dant/appellant bank. It made some deposits into its UBA Plc, Lagos Branch Account No. 201/2563. Upon receipt of the Statement of Account sent by the appellant bank, it dis-covered a total shortfall of N93,846.50 over a period of about 2 years. The shortfalls were discovered by comparing the paying-in-slips and the statement of account.

The respondent therefore brought an action at the Lower Court for the said sun of N93,846.50 “with interest at the prevailing market rate”. During the course of trial, the trial Judge decided that it would take the respondent a long time to prove each of the shortfalls which were about 135 items as listed in the Statement of Claim. It was agreed by both Counsel with the leave of court that only some items taken at the intervals of 20 should be proved. The respondent then went ahead to prove only 8 items out of the 135 items listed in the statement of claim.

At the end of the trial, the learned trial Judge entered judg-ment in favour of the respondent in the sum of N93,846.50 with interest at 21% per annum from 1 January, 1991 till


United Bank for Africa Plc v. Daniel Holdings Ltd 817

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date of judgment and at 7% per annum from date of judg-ment until liquidation of the whole amount.

The appellant appealed to the Court of Appeal. It was con-tended, inter alia, that the respondent had not proved that its servant paid the sum indicated in the counterfoil pay-in-slips to the cashier of the defendant bank during the ordinary course of banking business notwithstanding the official stamp on the slips. It was further submitted that the appellant had shown by credible evidence that a different sum was ac-tually received from that acknowledged on the counterfoil.

Held –

1. In an action for money had and received, the negligence of the defendant is not a necessary element of liability. In the instant case, the question of negligence was nei-ther an issue nor was it pleaded by either party in its pleadings. Consequently, it was of no relevance to the suit.

2. For the issue of how much was paid into the bank to be resolved, the plaintiff/respondent must prove by credible evidence that they made the alleged payments into the bank and they were receipted for by the bank. In case of any shortfall arising from the difference between the counterfoil and the amount actually received by the bank the onus was on the bank to prove what it actually re-ceived.

In the present case, the respondent having shown by credible evidence that it had actually paid the sum to its account with the appellant, had shifted the burden of proving that amount or a lesser amount to the appellant. This the appellant had failed to do.

3. Where an issue before the court is whether or not the stamp and initials on a bank’s payment counterfoil con-stitute evidence of receipts of the sum of money paid into a bank account, the account holder has the onus to prove by credible evidence that the payments were ac-knowledged by the bank. And where there is any short



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fall arising from the difference between the counterfoil and the amount actually received by the bank, the onus is on the bank to prove what it actually received. In the instant case, the respondent having shown by credible evidence that it had actually paid some of the sums claimed into its account with the appellant, shifted that burden of proving that the amount actually paid by the respondent was less than the amount claimed by the re-spondent, which burden the appellant failed to discharge having regard to the evidence of its witness in respect of the stamp on the respondent’s payment counterfoils ten-dered in evidence.

Appeal allowed in part.


Nigerian Aeroflot Soviet Airlines v UBA (1986) 3 NWLR (Part 27) 188 Bamgboye v University of Ilorin (1991) 8 NWLR (Part 207) 1 Ijebu-Ode Local Govt. v Adedeji Balogun and Co Ltd (1991) 1 NWLR (Part 166) 136 Imana v Robinson (1979) 2 and 4 SC 1 Olukade v Alade (1976) 1 All NLR (Part 1) 67 Oshinjinrin v Elias (1970) 1 All NLR 153

Foreign Mckenzie v British Linen Co (1880–81) 6 App. Cas. 82 Perestrello Companhia Limitada v United Paint Co Ltd (1969) 1 W.L.R. 570

Nigerian statute referred to in the judgment Court of Appeal Act Cap 75 Laws of the Federation of Ni-geria, 1990, section 16



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Counsel For the appellant: Segun Demuren For the respondent: Kemi Pinheiro, Esq. (with him A. Ka-moru)

Judgment IGE JCA: (Delivered the lead judgment) This is an appeal by the defendant/appellant against the judgment of the La-gos State High Court in Suit No. LD/1514/91 delivered on 17 December, 1993.

The plaintiff/respondent’s claim in the lower court was for a sum of N93,846.50 being the total sum of money paid into defendant/appellant’s Bank between 1 December, 1987 to 1 July, 1989. This total sum of money arose from shortfalls in the difference between the teller slips and the statement of account. The respondent also claimed in the writ of sum-mons interest on the said sum at the rate of 21% from 1 January, 1991 to the date of judgment and thereafter at the rate of 7% until the whole sum is liquidated. At the trial the plaintiff/respondent called one witness and tendered several documents including the relevant teller slips and statement of account re-account no. 201/2563 of the Lagos Branch of UBA Plc.

The learned trial Judge in conclusion entered judgment in favour of the respondent in the sum of N93,846.50 with in-terest at 21% per annum from 1 January, 1991 until date of Judgment and thereafter at 7% per annum until the whole amount is liquidated.

The appellant is dissatisfied with this judgment and has appealed to this Court by filing six grounds of appeal and formulating four issues for determination. The issues read thus:– “1. Whether the trial court was right in holding that the plaintiff

company paid to the defendant the money as evidenced by the counterfoil pay-in-slips (tellers) when the amounts con-tained therein are different from the figures contained in the original pay-in-slips and the monthly statement of account.


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2. Whether negligence is an essential element in an action for money had and received.

3. Whether the requirement to prove each of the particulars of special damages can be waived by either the court or any of the parties in the suit.

4. Whether the trial judge having ruled that the statement of claim supersedes the writ of summons can still have re-course to the writ for a relief not contained in the statement of claim.”

The respondent on his own part formulated issues thus:– “a. Whether the learned trial Judge was right in holding that

the sums of money were in fact paid in and received by the appellant?

b. Whether a defendant who at trial had consented to a par-ticular procedure can be heard on appeal to complain about the said procedure?

c. Whether the defence of contributory negligence was pleaded or issues joined on same (if at all) at the lower court?”

With respect to the first issue, it is submitted on behalf of the appellant that the main issue was whether the plaintiff had proved that its servant paid the sum indicated in the counterfoil pay-in-slips to the defendant Bank that is to a cashier during the ordinary course of banking transaction, the official stamp on the slips notwithstanding Counsel for the appellant further submitted that the appellant had shown by credible evidence that a different sum was actually re-ceived from that acknowledged on the counterfoils.

The appellant has tried to distinguish the case of Aeroflot Soviet Airlines v UBA (1986) NWLR (Part 27) 188 from this case by submitting that the appellant’s case is not whether a payment was made but that a different sum was actually re-ceived from that acknowledged on the counterfoils.

In answer to this submission the respondent submitted that the respondent’s claim at the lower court fell within the con-text of the decision in the case of Aeroflot v UBA (1986) NWLR (Part 27) 188, and that the plaintiff had discharged the burden placed on him vis-à-vis its claim for money had and received.


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From the pleadings before the lower court the issue was whether or not the stamping and initials on the paying-in-slips constituted evidence of receipts of the sums of money paid.

It is my view that for this issue to be resolved, the plain-tiff/respondent must prove by credible evidence that they made the alleged payments into the bank and they were re-ceipted for by the bank. In case of any shortfall arising from the difference between the counterfoil and the amount actu-ally received by the bank the onus is on the bank to prove what it actually received. The appellant in this case has tried to distinguish the case of Aeroflot Soviet Airlines v United Bank for Africa (1986) 3 NWLR (Part 27) 188 from this case. I am afraid I do not agree with him that there is any difference in the principle relied upon by the Supreme Court with that relied upon by the learned trial Judge.

In Aeroflot’s case (supra) the appellants who were plain-tiffs in the lower court were customers of the respondent bank and had an account at the Central Lagos Branch. Be-tween 5 May, 1978 and 22 May, 1978, the appellants paid into their account a sum of N9,750. These deposits were duly recorded and the respondents’ letters and the tellers were duly stamped with the respondents’ cashier no. 5 stamp and also initialled. When the appellants received a statement of their account they discovered that this sum of N9,750 was not credited to their account. They wrote several letters to the bank informing them of the omission. The bank paid no heed to the complaint of the appellant hence the appellant brought an action claiming, inter alia, for (1) Damages for conversion in the said sum of N9,750 (2) alternatively, pay-ment of the said sum of N9,750 as money had and received by the defendants/respondents to the use of the appellants. The learned trial Judge in that case considered the evidence and gave judgment for the appellants against the respondent bank. The respondents then appealed to the Court of Appeal which allowed the appeal and dismissed the appellants’ claims. But the Supreme Court by a majority decision


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allowed the appeal and restored the decision of the High Court of trial.

From the facts of the present case the issues involved are one and the same with the case of Aeroflot Soviet Airlines’ (supra). The respondents made several payments of money into their account with the appellant’s bank UBA Plc Lagos branch account no. 201/2563. Statements of account sent to respondent by the bank revealed a total shortfall of N93,846.50 over a period of about two years. The respon-dent having shown by credible evidence that it had actually paid the sum to its account with the appellant, has shifted the burden of proving that amount or a lesser amount to the appellant. This the appellant has failed to do.

In their statement of defence the appellant denied that any of its staff ever stamped or initialled the plaintiff’s teller in acknowledgment of the receipt of the said sum of N93,846.50 and also that the stamp allegedly used was its official stamp used in the ordinary course of business. The evidence of the appellant’s witness in the lower court was that the stamps on the exhibits look like UBA stamp. The learned trial Judge for that reason coupled with other find-ings of fact that he had the opportunity of watching the de-meanour of the respondent’s witness in the box and there-fore believed that witness, was right in applying the princi-ples laid down in the similar case of Aeroflot v UBA (1986) 3 NWLR (Part 27) 188 following the English case of McKenzie v British Linen (1880–81) 6 App. Cas. 82. The respondent need not go further to show that it was in fact an official of the bank that actually initialled the tellers. Issue 1 is therefore resolved in favour of the respondent.

With regard to Issue 2 on the question of whether or not negligence was an essential element in an action for money had and received, the Supreme Court in the same case of Aeroflot (supra) has held, inter alia, that in an action for money had and received, the negligence of the defendant is not a necessary element of the liability. In this case the ques-tion of negligence was neither in issue nor was it pleaded by either party in their pleadings. I therefore rule that Issue 2


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although answered in favour of the appellant is of no rele-vance in this case.

Now to Issue 3 which is whether the requirement of prov-ing each of the particulars of special damages can be waived by either the court or any of the parties to the suit.

During the course of the trial it was agreed by both Coun-sel with the leave of court that only some items taken at the intervals of 20 should be proved. The plaintiff/respondent went ahead to prove each of the 8 items – as it would take a very long trial period to require the plaintiff to prove each of the 135 items as contained in the statement of claim.

It has been argued on behalf of the appellant that even though the appellant did not object at the trial all the listed items are in the nature of special damages which require strict proof, Counsel has submitted that the need for strict proof can neither be waived by the court nor by the parties to the suit. Counsel cited the following cases in support of his argument (see Amadi and 5 others v Engineer Effiong A. Essien (1994) 7 NWLR (Part 354) 91 and International Messengers (Nigeria) Ltd v P.U. Oge (1996) 3 NWLR (Part 437) 422). The respondent’s Counsel has contended that where parties in a civil case had agreed to adopt a particular procedure on any issue neither of them can be heard thereaf-ter to say that the procedure was improper or seek to take advantage thereafter.

To buttress his argument respondent’s Counsel cited the following cases:– Akhiwu v The Principal Lotteries Officer Mid-Western State and another (1972) 1 All NLR (Part 1) 229 at 232; Ilouno v Chiekwe (1991) 2 NWLR (1991) 2 NWLR (Part 173) 316 at 324–325; Ojo v Gharoro (1999) 8 NWLR (Part 615) 374 at 386; and Olukade v Alade (1976) 1 All NLR (Part 1) 67. Counsel referred to a quotation at page 67 of the report of Olukade v Alade (supra) which reads thus:–

“Where evidence was admitted at the trial court without objection, or by consent of the parties or was used by the opposite party, it would be within the competence of the trial court to act on it and


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the Court of Appeal will not entertain any complaint on the ad-missibility of such evidence.”

There is no doubt whatsoever that the 135 items of shortfalls indicated on plaintiff/respondent’s statement of claim are items of special damages. It is settled law that a claim for special damages requires strict proof unlike a claim for gen-eral damages. Special damages do not flow in ordinary course. They must be claimed specially and proved strictly. (See the case of Ijebu-Ode Local Government v Adedeji Ba-logun and Co Ltd (1991) 1 NWLR (Part 166) 136 at 158.)

The strict proof required of special damages means that the damages must be established by credible evidence of such a character as would suggest that the claimant is indeed entitled to an award under that head, otherwise the general law of evidence as to proof by preponderance or weight usual in civil cases operates. (See the case of Oshinjinrin v Elias (1970) 1 All NLR 153.) In this case the 135 items of special damages as enumerated in paragraph 7 of the state-ment of claim have crystallised in terms of each and value before trial.

I agree with the view of the appellant that each item must be proved specifically as required by law. Has this been done in this case? The learned trial Judge has held the view that it would take a very long trial period to require the plaintiff to prove each of the 135 items as contained in the statement of claim. This view held by the learned trial Judge I am afraid is contrary to the requirement of the law. Where the law is clear as to the specific procedure to be followed in the proof of a case, the court or parties cannot cut short or guillotine the laid down principles by designing their own special procedure in order to reduce the trial period. Justice should not be sacrificed at the altar of speed. The correct course would have been for plaintiff who is making a claim for special damages to prove by evidence showing the par-ticularity of each item of special damage which was exactly known or accurately measured before the trial.

It is my view that neither the parties nor the learned trial Judge can waive this requirement of the law by consenting


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to a shorter procedure of random sampling as has been done in this case. This case must be distinguished from Olukade v Alade (1976) 1 All NLR (Part 1) page 67 where evidence was admitted at the trial court without objection or by con-sent of the parties – and the court held that it is within the competence of the trial court to act on it and the Court of Appeal will not entertain any complaint on the admissibility of such evidence.

The issue involved in the present case is not a question of admissibility of evidence but question of the court adopting a wrong procedure in establishing strict proof. Although the term “strict proof” is required here, it does not mean unusual proof. I am taking the description of Lord Donovan in the case of Perestrello Companhia Limitada v United Paint Co (1969) 1 W.L.R. 570 at 579 as very relevant to this case I quote:–

“A plaintiff who has the advantage of being able to base his claim upon a precise calculation must give the defendant access to the facts which make such calculation possible.”

Aniagolu, JSC as he then was has also referred to this view in the case of Imana v Robinson (1979) 3–4 SC 1 at 23. In that case the plaintiff/respondent in paragraph 12 of his statement of claim set out the particulars of his special dam-ages and later gave evidence in support of those items by tendering receipts in respect thereof. Several receipts and cheques were tendered. The court held that the respondent had satisfied the requirements of the terms of “Strict Proof”.

It is my view that the nature of proof in a given case must be dictated by the peculiar circumstances of the available evidence. In this case the plaintiff/respondent pleaded 135 items of special damages stating clearly the various special amounts involved in the shortfalls. He proceeded further to give evidence in support of the various amounts by tender-ing seven payment tellers ie exhibits 1–7 showing payments made into appellant bank. These payments were made into plaintiff’s Account No. 20112563. The shortfalls were com-piled from the statement of account produced by the


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appellant bank for the relevant periods of shortages – see exhibits 18–24. Normally the statements of account should reflect the amount entered into the tellers but this has not happened in this case hence the accumulation of shortfalls as per paragraph 7 of the statement of claim.

The learned tria1 Judge knew there was sufficient credible evidence to cover most of the items of special damages but he circumvented the laid down procedure and adopted a short circuit system which portrays a line of least resistance ending in a quick questionable summary. Learned trial Judge should have gone the whole hog with the correct laid down procedure and arrive at a just conclusion. Failure to do this should however not vitiate the proceedings in this case in view of the overwhelming credible evidence in fa-vour of the respondent. Moreover, there is no miscarriage of justice erupting from this wrong procedure.

Upon a careful perusal of each item of shortfall supported by the amounts portrayed in the statements of account is-sued by the appellant bank the following items in paragraph 7 of the statement of claim have been strictly proved as re-quired by the law. I quote Items 1–9, 11–14, 15–24, 60–72, 75–102, 103–127 and 131–135. When the amounts involved in these items are totalled up they amounted to a grand total of N68,541.50.

There is no evidence of “payments into the bank” to sup-port all other items hence the judgment of the lower court will be varied to read:–

“Judgment is given in favour of the plaintiff for the sum of N68,541.50 being the monies had and received by the defendants to the plaintiff’s use as per particulars mentioned in the following items under paragraph 7 of the statement of claim items 1–9, 11–24, 60–72, 75–127, 131–135. This sum is based on what is proved in the statement of claim which of course supersedes the writ of summons . . .”

The last issue as formulated by the appellant is whether the trial Judge having ruled that the statement of claim super-sedes the writ of summons can still have recourse to the writ for a relief not contained in the statement. It is settled law


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that a statement of claim supersedes the writ of summons. (See the case of Bamgboye v University of Ilorin (1991) 8 NWLR (Part 207) 1.)

In this case the plaintiff/respondent’s claim as endorsed on the writ reads as follows:– “1. The total sum of N94,000 as money had and received by the

defendants to the use of the plaintiff vis-à-vis account no. 201/2563 at its Lagos East Branch.

2. Interest on the said sum at the rate of 21% from 1 January, 1999 to the date of judgment and thereafter at the rate of 7% until the whole amount is liquidated”.

Later on when the statement of claim was filed the plain-tiff/respondent as per paragraph 11 claims as follows:– “11. Whereupon the plaintiff claims the total sum of N93,846.50

being the monies had and received by the defendant to the plaintiff’s use as per particulars mentioned in paragraph 7 hereof with interest at the prevailing market rate.”

When the learned trial Judge decided at the end of the trial to grant the plaintiff’s claims he stated thus:–

“In the circumstances therefore the claim of the plaintiff succeeds and judgment is given in their favour for the sum of N93,846.50k being the monies had and received by the defendants to the plain-tiffs use as per the particulars mentioned in paragraph 7 of the statement of claim. This sum is based on the statement of claim which of course supersedes the writ of summons. The plaintiffs also claim interest on the said N93,846.50k at 21% per annum from 1 January, 1991 until today and at 7% per annum from today until the whole amount is liquidated. Cost is assessed at N2,000.”

When one looks carefully at paragraph 11 of the plain-tiff/respondent’s statement of claim it is very clear that plaintiff never asked for interest at 21% per annum from 1 January, 1991 until today and at 7% per annum from today until the whole amount is liquidated. What they wanted as per statement of claim which has superseded the writ of summons was interest at the prevailing market rate. Rather than grant the plaintiffs what they asked for the learned trial Judge decided to grant the interest as claimed on the writ of summons. This is very wrong. There is even no evidence on


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record as to what the prevailing market rate is hence this Court cannot make any award which the lower court omit-ted to make in its judgment.

On a final analysis this appeal succeeds in part and fails partially. The judgment of the lower court is varied as fol-lows by virtue of section 16 of Court of Appeal Act:–

“Judgment is given in favour of the plaintiff for the sum of N68,541.50 being the monies had and received by the defendants to the plaintiff’s use as per particulars stated in the following items under paragraph 6 of the statement of claim ie Items 1–9, 11–24, 60–72, 74–127 and 131–135. This sum is based on what is proved in the statement of claim which of course supersedes the writ of summons.”

GALADIMA JCA: I have had the privilege of reading in draft lead judgment of my learned brother Ige, JCA just de-livered. I am in entire agreement with her reasoning and conclusions. I am also of the view that this appeal only suc-ceeds in part and fails partially. I highly commend the effort of my learned brother who carefully perused each item of shortfall supported by the amounts portrayed in the state-ments of account issued by the appellant Bank. This has been necessitated by the “short circuit” or “short-cut” pro-cedure adopted by the learned trial Judge in arriving at hasty summary. When justice is sacrificed for speed the end result is usually miscarriage of justice. This, the court must avoid at all cost.

I agree that, in the circumstance of this appeal each party should bear his own costs. SANUSI JCA: I was privileged to have perused before now the judgment just delivered by my learned brother, Ige, JCA. She has painstakingly and exhaustively dealt with the issues formulated by the parties in this appeal. I am in entire agreement with the reasons and conclusion reached in the said judgment. I only wish to say a word or two on the pro-cedure adopted by the learned trial Judge. In the judgment appealed against, the learned trial judge said thus:–

“It was also contended by the defendant Counsel that the particu-lars as itemised in paragraph 7 of the statement of claim were in the nature of special damages and each item must be proved


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specifically. This view of the defendant’s Counsel I am unable to agree to because it was agreed to by both Counsel and with leave of court that only some items taken at intervals of 20 should be proved. The plaintiffs have therefore gone ahead to prove each of the eight items. It would take a very long in at period to require the plaintiff to prove each of the 135 items as contained in the statement of claims.” (Italics mine.)

I am afraid the “shortcut” procedure adopted by the trial judge though consented to by the parties’ Counsel is a very wrong one. The items in question touch on special damages which, very much unlike general damages, must be proved strictly (see Odumosu v A.C.B. (1976) 11 SC 55).

As an adage says “what is worth doing is worth doing very well”. The procedure adopted by the trial court especially where it relates to proof of special damages by a claimant is alien to law. Reasons such as cumbersomeness or time con-sumption or consent by parties should not influence a court to deviate from the well known laid down procedure. With this little contribution, I entirely agree with the reasons given in the lead judgment and shall also partly allow the appeal and endorse the judgment as varied by my learned brother, Ige, JCA. I also decline to award any cost to either of the parties and instead, order that each party should bear its own cost. Appeal allowed in part.



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Bendel Feed and Flour Mills Ltd v Nigeria Intercontinental Merchant Bank Ltd

COURT OF APPEAL, LAGOS DIVISION OGUNTADE, GALADIMA, SANUSI JJCA Date of Judgment: 25 NOVEMBER, 1999 Suit No.: CA/L/30/95

Banking – Interest rate – Failure to sufficiently plead that plaintiff is entitled to an interest rate agreed by both parties – Plaintiff cannot obtain judgment on it Facts The respondent, a Merchant Banker, sometime in August, 1991 granted a loan facility of N5 million to one of its cus-tomers called Pastinor Investment Company Limited for the purchase of Nigerian wheat to be supplied to the appellant. The loan was to be repaid from the proceeds of sale of wheat by the appellant after taking delivery of the wheat. On the 30 August, 1991, the appellant wrote to the respon-dent Bank confirming to make payment to the respondent in respect of deliveries made to the appellant. The respondent contended that it granted the said loan to Pastinor Invest-ment Co Limited and also caused the wheat to be delivered to the appellant through warehousing agents called SGS In-spection Service (Nigeria) Limited.

An executed Domiciliation Form and Notice of Delivery of the wheat were exhibited as exhibit C and D respectively in support of the summons. The respondent further contended that it demanded from the appellant payment for the loan fa-cility but that the appellant declined to honour its understand-ing to pay directly to the respondent in spite of demands.

The respondent therefore in Suit No. LD/3163/93 by a writ of summons for summary judgment accompanied by a statement of claim pursuant to Order 10 Rules 1 and 2 of the High Court of Lagos (Civil Procedures) Rules, 1972 claim-ing the sum of N5 Million, being sum arising from delivery of the wheat and interest at the rate of 75% per annum from 20 October, 1991 until final liquidation. The appellants in their affidavits before the Lower Court denied that any


Bendel Feed and Flour Mills Ltd v. Nig Intercontinental Merchant 831

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money was released to Pastinor Investment Company Lim-ited in respect of their letter of 30 August, 1991. They also contended that S.G.S. Inspection Services did not supply any grain in respect of the said letter of 30 August, 1991 to them. They averred that previous supplies made for and on behalf of the plaintiff were promptly paid for. They also contended that the application of the respondent was an abuse of Court process on the basis that the respondents had filed a similar suit at about the same time against Pastinor.

On the 11 March, 1994, Thomas, J of the Lagos High Court gave judgment in favour of the plaintiff/respondent against the defendant/appellant in the sum of N5 million. They were also granted interest on the said sum of 75% per annum from 20 October, 1991 till 31 December, 1993, 21% per annum up to date of judgment and 6% per annum until judgment debt is liquidated.

Being dissatisfied, the defendant/appellant appealed to the Court of Appeal. The Court of Appeal considered the provi-sions of Order 10 of the Lagos State (Civil Procedure) Rules in resolving the matter which provides as follows:–

“Where the defendant appears to a writ of summons specifically indorsed with or accompanied by a statement of claim under Order 3 Rules 4, the plaintiff may on affidavit made by himself or by any other person who can swear positively to the facts verifying the cause of action and the amount claimed (if any liquidated sum is claimed) and stating that in his belief there is no defence to the ac-tion except as to the amount of damages claimed, if any apply to a Judge in Chambers for liberty to enter judgment for such remedy or relief as upon the statement of claim, the plaintiff may be enti-tled to. The Judge thereupon, unless the defendant shall satisfy him that he has a good defence to the action on the merits or shall disclose such facts as may be deemed sufficient to entitle him to defend the action generally, may make an order empowering the plaintiff to enter such judgment as may be just, having regard to the nature of the remedy or relief claimed.”

Held –

Failure to sufficiently plead that the plaintiff is entitled to an interest rate agreed by both parties will definitely result in failure to obtain judgment on it.



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In the instant case, the learned trial Judge was wrong in granting the respondent interest at a rate which has no basis and for which the main agreement does not provide. Appeal allowed.


Nigerian Ajao v Alao (1986) 5 NWLR (Part 45) 802 Awofeso v Oyenuga (1996) 7 NWLR (Part 460) 360 Barclays Bank v Abubakar (1977) 10 SC 13 Labiyi v Anretiola (1992) 8 NWLR (Part 258) 139 Macaulay v NAL Merchant Bank Ltd (1990) 4 NWLR (Part 144) 283 Nishizawa v Jethwani (1984) 12 SC 234 Tukur v Govt. of Taraba State (1997) 6 NWLR (Part 510) 549

Foreign Jacobs v Booths Distillery Co (1901) 85 L.T. 262 Ray v Newton (1913) KB 249

Nigerian rules of court referred to in the judgment High Court of Lagos State (Civil Procedures) Rules, 1972, Order 10 Rules 1–2

Counsel For the appellant: Prof. A.B. Kasunmu, S.A.N. (with him D.A. Awosika, Esq. and O.T. Kasunmu (Miss) For the respondent: Abiodun Akinyemi, Esq.

Judgment GALADIMA JCA: (Delivering the lead judgment) In Suit No. LD/3163/93, the plaintiff/ respondent, in their writ of summons for summary judgment accompanied by a state-ment of claim, pursuant to Order 10 Rules 1 and 2 of the


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High Court of Lagos (Civil Procedure) Rules 1972, claimed against the defendant/appellant as follows:– “(a) N5 Million (Five Million Naira) being sum due to the plain-

tiff from the defendant arising from delivery of consign-ment of wheat to the defendant and based upon the defen-dant’s written undertaking dated the 30 August, 1991 which said sum the defendant has failed to pay in spite of repeated demands.

(b) Interest on the said sum of N5 Million at the rate of 75% per annum from 20 October, 1991 until final payment.”

On the 11 March, 1994, Thomas, J of the Lagos High Court gave judgment in favour of the plaintiff/respondent against the defendant/appellant in the sum of N5 Million. They were also granted interest on the said sum at 75% per, annum from 20 October, 1991 till 31 December, 1993, 21% per an-num up to date of judgment and 6% per annum until judg-ment debt is liquidated.

Being dissatisfied, the defendant/appellant filed this Notice of Appeal which contains seven grounds of Appeal and which without the particulars stated as follows:– (1) The learned trial Judge erred in law when he held that the

defendant’s company’s counter affidavit discloses no triable issues and thereby deprived the defendant of the chance to be let in to defend the suit.

(2) The learned trial Judge erred in law when he awarded 75% interest per annum from 20 October, 1991 till 3 December, 1993; 21% per annum up to date of judgment, ie 11 March, 1994 and thereafter 6% per annum till the whole debt is paid.

(3) The trial court has no jurisdiction to entertain the suit. (4) The judgment of the court is against the weight of evidence

before the court. (5) The filing of the Suit No. LD/3136/93 at the High Court

No. 2 Lagos as well as Suit No. K/636/93 at the Kano High Court by the plaintiff in the same subject matter is an abuse of the court process.

(6) The learned trial Judge erred in law in entering judgment in favour of the plaintiff as per writ of summons to wit, “I am satisfied that no triable issue is raised in the counter affida-vit and to further and better counter affidavit to entitle the defendant/company to defend either unconditionally or sub-ject to any terms. The plaintiff/Bank succeeded in their


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application. Judgment is entered empowering them to enter judgment in the sum of N5 million against the defen-dant/Company arising from delivery of consignment of wheat to them as per the writ”.

(7) The learned trial Judge erred in law when in awarding in-terest in favour of plaintiff held as follows:–

“On the question of interest, the plaintiff/bank in the writ had claimed 75% per annum from 20 October, 1991 till fi-nal payment of debt. At the hearing of the Summons, learned Counsel for the plaintiff/bank applied that the in-terest be reduced to 21% per annum after 31 December, 1993 in view of the Federal Government regulation peg-ging the rate of interest with effect from 1 January, 1994. On the other hand, the learned Counsel did not address on the reduction of rate of interest but submitted that the plaintiff/Bank were not entitled to any interest. He did not direct me to any authority for so arguing. The plaintiff Bank are licensed Merchant Bank as pleaded in the state-ment of claim. By universal custom such institution is enti-tled to claim interest on their transaction other than by ex-press agreement. (See Barclays Bank of Nigeria v Abubakar (1977) NSCC Vol. II page 415; (1977) 10 SC. 13.)

The plaintiff/bank are awarded interest on the N5 mil-lion claim at 75% per annum from 20 October, 1991 till 31 December, 1993, 21% per annum up to date hereof and thereafter at 6% per annum till the whole judgment debt is paid.”

The appellants formulated three issues for determination as follows:– “(1) Whether the High Court was right in holding that the appel-

lant has no arguable defence to the claim and in entering judgment for the respondent accordingly.

(2) Whether having regard to the Affidavit evidence before the court, the High Court was right in awarding interest against the appellant as per the writ of summons.

(3) Whether it is an abuse of the judicial system for the re-spondent to institute two separate actions against the appellant and the principal party to the contract in respect of the same sum and subject matter.”

The respondent also formulated three issues for determina-tion as follows:– “(1) Was the learned trial Judge right in granting summary

Judgment in favour of the respondent under Order 10


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Rules 1 and 2 of the High Court of Lagos State (Civil Pro-cedure) Rules, 1972.

(2) Was the learned trial Judge right to have awarded interest at the rate he did against the appellant.

(3) Does this suit constitute an abuse of court process in view of Suit No. IL/636/93 between the respondent and Pastinor Investment Co Ltd (not party to this suit) instituted by the respondent at the Kano High Court?”

Close perusal of the issues elicited by the parties appears to me that they are similar. This makes their consideration and determination quite convenient. However, before I consider the issues by the parties, I would quickly dispose of the issue of jurisdiction in Ground 3 of the appellant’s Amended No-tice of Appeal. It is that the trial court has no jurisdiction to entertain the suit. It was raised in a motion. The learned trial judge in a considered ruling held that from the evidence placed before him the appellant functions from No. 16 Kofo Abayomi Road, Victoria Island, Lagos and accordingly as-sumed jurisdiction and proceeded to trial. It is settled that where a ground of appeal is not covered by any issue formu-lated in a party’s brief of argument that ground must be taken as abandoned. (See Bankole v Pelu (1991) 8 NWLR (Part 211) 523; Labiyi v Anretiola (1992) 8 NWLR (Part 258) 139 and Tukur v Government of Taraba State (1997) 6 NWLR (Part 510) 549 at 569.) Ground 3 is not covered by any of the issues formulated by the appellant. Ordinarily it should have been taken abandoned. But in view of the fun-damental nature of the issue of jurisdiction, though not cov-ered by an issue in the appellant’s brief I am of the opinion that I cannot gloss over it, as it can be raised even in this Court or Supreme Court for the first time even suo motu. (See Bronik Motors Ltd v Wema Bank Ltd (1983) 1 SCNLR 296; Ajao v Alao (1986) 5 NWLR (Part 45) 802.) I cannot close my eyes to the fact of the existence of their ground of appeal which I have carefully considered and I come to the same inevitable conclusion as the learned trial Judge did that he has jurisdiction to entertain the respondent’s suit. It is pertinent at this stage to set out relevant background facts which gave rise to this appeal. The respondent, a merchant


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banker, sometime in August, 1991 granted a loan facility of N5 million to one of its customers called Pastinor Investment Company Limited for the purchase of Nigerian wheat to be supplied to the appellant. The loan was to be paid from the proceeds of sale of wheat by the appellant after taking deliv-ery of the wheat. On the 30 August, 1991, the appellant wrote to the respondent Bank confirming to make payment to the respondent in respect of deliveries made to the appellant. The respondent contended that it granted the said loan to Pastinor Investment Co Ltd and also caused the wheat to be delivered to the appellant through the warehousing agents called SGS Inspection Services (Nigeria) Ltd. An executed Domiciliation Form and Notice of Delivery of the wheat were exhibited as exhibits C and D respectively in support of the summons. The respondent further contended that it demanded from the appellant payment for the loan facility but that the appellant declined to honour its undertaking to pay directly to the re-spondent inspite of demands in consequence of which the re-spondent instituted this action against the appellant in terms of their claim as stated earlier.

In respect of the three issues formulated for determination in this Appeal by each party, I have decided to take them in sequence as elicited, because they are similar. In Issue 1, the question which is set by both parties is whether the Learned Trial Judge was right in granting summary judgment in fa-vour of the respondent under Order 10 Rules 1 and 2 of the High Court of Lagos State (Civil Procedure) Rules, 1972 when it held that the appellant has no arguable defence to the claim.

The provision of Order 10 Rule 1(a) of the High Court of Lagos State (Civil Procedure) Rules, 1972 is as follows:–

“Where the defendant appears to a writ of summons specially en-dorsed with or accompanied by a statement of claim under Order 3 Rule 4, the plaintiff may on affidavit made by himself or by any other person who can swear positively to the facts verifying the cause of action and the amount claimed (if any liquidated sum is claimed) and stating that in his belief there is no defence to the ac-tion except as to the amount of damages claimed, if any, apply to a judge in Chambers for liberty to enter judgment for such remedy


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or relief as upon the statement of claim the plaintiff may be enti-tled to. The Judge thereupon, unless the defendant shall satisfy him that he has a good defence to the action on the merit or shall disclose such facts as may be deemed sufficient to entitle him to defend the action generally, may make an order empowering the plaintiff to enter such judgment as may be just, having regard to the nature of the remedy or relief claimed.”

At this stage I shall take the pain to reproduce the plaintiff’s affidavit verifying cause of action and that of the defendant showing cause why they should be let in to defend the ac-tion. The purpose is for the better understanding of issues raised by the parties in their respective brief. The affidavit verifying cause of action reads thus:–

“I, Effiong Antai, Male, Christian, Nigerian, Solicitor of 12, Berk-ley Street Onikan, Lagos do hereby make Oath and states as fol-lows:–

1. That I am a legal officer in the employment of the plain-tiff/applicant and I have the consent and authority of the plaintiff/applicant to depose to this affidavit.

2. That I am familiar with the facts of this case. 3. That the writ of summons and statement of claim in their

suit were filed on 19 October, 1993. 4. That the defendant has entered appearance through the law

firm of A.B. Thomas and Co. 5. That sometime in August, 1991, the plaintiff granted a loan

facility of N5 million to Pastinor Investment Limited to fi-nance the purchase of Nigeria wheat to be supplied to the defendant which facility was to be repaid from the proceeds of the sale of the wheat. Copy of the said letter of offer dated 25 August, 1991 is attached and marked exhibit A.

6. That the defendant undertook to the plaintiff that if the plaintiff permitted the delivery of the said wheat by Pastinor Investment Company Limited to the defendant, the defen-dant shall pay directly to the plaintiff the entire proceeds of the wheat in liquidation of the facility granted by the plain-tiff to the said Pastinor Investment Company. Attached and marked exhibit B and C are copies of the defendant’s letter of Domiciliation/Undertaking dated August, 1991 and Domiciliation form executed by the defendant in favour of the plaintiff.

7. That the plaintiff thereafter instructed SGS Inspection Ser-vices Nigeria Limited to deliver the consignment of wheat

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