Nigerian Banking Law Reports [1994

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NIGERIAN BANKING LAW REPORTS [1994 – 1996]

VOLUME 6 (PART II)

To be cited as: [1994 – 1996] 6 N.B.L.R. (PART II)

Nigeria Deposit Insurance Corporation

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© 2009 Nigeria Deposit Insurance Corporation, published by LexisNexis (Pty) Ltd under licence ISSN 1595-1030 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including electronic, mechanical, photocopying and recording, without the written permission of the copyright holder, application for which should be addressed to the publisher. Such written permission must also be obtained before any part of this publication is stored in a retrieval system of any nature. Whilst every effort has been made to ensure that the information published in this work is accu- rate, the editors, publishers and printers take no responsibility for any loss or damage suffered by any person as a result of the reliance upon the information contained therein.

Printed and bound by Interpak Books Pietermaritzburg 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 N.D.I.C. 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 N.D.I.C. 9. Moses Ter-llumun Adaguusu Member Legal Practitioner Corporate Affairs Commission 10. Dan Ike Agwu Secretary Legal Practitioner N.D.I.C.

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

1. HON. JUSTICE IDRIS LEGBO KUTIGI (Chief Justice of Nigeria) 2. HON. JUSTICE SYLVESTER UMARU ONU, CON 3. HON. JUSTICE ALOYSIUS IYORGYER KATSINA ALU, CON 4. HON. JUSTICE NIKI TOBI, CON 5. HON. JUSTICE DAHIRU MUSDAPHER, CON 6. HON. JUSTICE GEORGE ADESOLA OGUN- TADE, CON 7. HON. JUSTICE SUNDAY AKINOLA AKIN- TAN, CON 8. HON. JUSTICE ALOMA MARIAM MUK- HTAR, CON 9. HON. JUSTICE MAHMUD MOHAMMED, CON 10. HON. JUSTICE WALTER SAMUEL NKANU ONNOGHEN, CON 11. HON. JUSTICE IKECHI FRANCIS OGBUAGU, CON 12. HON. JUSTICE FRANCIS FEDODE TABAI, CON 13. HON. JUSTICE IBRAHIM TANKO MUHAM- MAD, CON 14. HON. JUSTICE PIUS OLAYIWOLA ADEREMI, CON 15. HON. JUSTICE CHRISTOPHER MITCHELL CHUKWUMA-ENEH, CON

iv 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 MU- HAMMAD, (OFR) 5. HON. JUSTICE RAPHAEL OLUFEMI ROW- LAND, (OFR) 6. HON. JUSTICE MUHAMMAD S. MUNTAKA COOMASIE 7. HON. JUSTICE DALHATU ADAMU, (OFR) 8. HON. JUSTICE BABA ALKALI BA’ABA 9. HON. JUSTICE SAKA ADEYEMI IBIYEYE 10. HON. JUSTICE ZAINAB ADAMU BUL- KACHUWA 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 v 25. HON. JUSTICE NWALE SYLVESTER NGWUTA 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 RHODE 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 OMO- LEYE 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. SAU- LAWA 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 vi 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

vii 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

viii 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 commenced and a formal and institutional channel of saving mobilization was introduced into the economy with the establishment 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 colonial 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 institutions. Consequently most of the early indigenous banks collapsed 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, especially 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 development of the system. These were some of the reasons behind 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

ix [1994 – 1996] 6 N.B.L.R. (PART II)

Nigerian Banking Law Reports by the CBN and other relevant authorities to promote the growth and development of the Nigerian financial system. 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 emergence of the securities markets and instruments (primary and secondary) and by promoting the establishment of development banks. Following the adoption of the SAP in 1986, and the subsequent deregulation of the financial system, the banking system witnessed radical changes. Apart from the introduction of measures and instruments to deregulate the financial services industry, the techniques and the range of products offered by the industry, changed significantly. The major ob- jective of the deregulation was to enhance economic efficiency 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 address the safety of depositor’s funds, enable the banking sector play an active developmental role in the economy and transform Nigerian banks into competitive players in the Af- rican and Global financial system.

x [1994 – 1996] 6 N.B.L.R. (PART II)

The Nigerian Banking System

2. The Nigeria Deposit Insurance Corporation One of the key measures introduced during the era of deregulation of the banking sector was the establishment of the Nigeria Deposit Insurance Corporation (N.D.I.C.), with the promulgation of Decree No. 22 of 1988 now Cap 301 Laws of the Federation 1990, (as amended). The NDIC was established to insure all the deposit liabilities of licenced banks, promote banking stability and a sound financial system. Al- though 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 protection 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 referred 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 system as well as reducing the system’s vulnerability to de- structive runs, panic-induced shocks by reinforcing depositors’ confidence in the nation’s financial system. The mission of the Corporation is to protect depositors through effective supervision of insured institutions, provision of financial and technical assistance to eligible insured institutions, prompt payment of guaranteed sums and the orderly resolution of failed financial institutions.

xi [1994 – 1996] 6 N.B.L.R. (PART II)

Nigerian Banking Law Reports

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 insured deposits while liquidation dividends making up 100% of total uninsured deposits have been declared and paid to depositors of ten (10) banks in Liquidation. In September 1997, the Corporation commenced publication of the Failed Banks Tribunals Law Reports (FBTLR) which contained only reported decisions of the Tribunal established 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 restructured 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 (NBLR). Nigeria Deposit Insurance Corporation November, 2005

xii 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 preeminence in economic 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 publication 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 (F.B.T.L.R.) 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 decided 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 NBLR is a compendium of case law on Nigerian banking from 1933 to date. The first batch of the compendium contains cases decided between 1933-2002 which I understand would continue to 2004. Thereafter, the reports would be published regularly. This initiative will prove

xiii [1994 – 1996] 6 N.B.L.R. (PART II)

Nigerian Banking Law Reports invaluable to users who would not have to wade through different law reports when conducting research on Nigerian banking case law. The publication of the NBLR is one reliable means of dis- seminating 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 NBLR in order 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 become 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 Report, which is a worthy and befitting legacy for posterity, especially the world of learning, to all and sundry.

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

xiv PREFACE TO THE NIGERIAN BANKING LAW REPORTS The decision of the Nigeria Deposit Insurance Corporation to publish the Nigerian Banking Law Report 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 recovering the debts owed to failed banks and prosecuting directors, 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 initiative, 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 permanent record the lessons from the new wave of bank failures/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. xv [1994 – 1996] 6 N.B.L.R. (PART II)

Nigerian Banking Law Reports

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 data base 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 NBLR very comprehensive. In addition, there is an index for the compendium up to 2002, which would soon be updated to 2004 and thereafter, it would be published on 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 NBLR. They left no stone unturned in bringing the Corporation’s dream of making this worthy contribution to legal knowledge and re- xvi [1994 – 1996] 6 N.B.L.R. (PART II)

Preface to The Nigerian Banking Law Reports search a reality. Their commitment in ensuring the completion of the project is highly commendable. Management will on its part do everything possible to ensure that publication of the Nigerian Banking Law Reports (NBLR) is sustained.

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

xvii

TABLE OF CONTENTS

Index of Table of Cases Reported...... xxi Index of Subject Matter...... xxiii Index of Nigerian Cases referred to ...... xxxv Index of Foreign Cases referred to...... xlvii Index of Nigerian Statutes referred to...... li Index of Foreign Statutes referred to...... lvii Index of Nigerian Rules of Court referred to ...... lix Index of Books referred to ...... lxi

xix

TABLE OF CASES REPORTED Page 1. Bi Zee Bee Hotels Ltd v. Allied Bank Nig. Ltd ..... 436 2. C.B.N. v. Great Merchant Bank Ltd...... 488 3. C.B.N. v. Ivory Merchant Bank Ltd...... 251 4. E.D. Tsokwa and Sons Ltd v. U.B.N. Ltd ...... 661 5. F.R.N. v. Abubakar...... 172 6. F.R.N. v. Eze (No. 1) ...... 334 7. F.R.N. v. Eze (No. 2) ...... 465 8. F.R.N. v. Odebode ...... 1 9. F.R.N. v. Odogwu (No. 2) ...... 265 10. F.R.N. v. Ugwandu ...... 531 11. Folbod Investments Ltd v. N.D.I.C...... 502 12. Governor C.B.N. v. Alpha Merchant Bank Plc .... 348 13. Kareem v. U.B.N. Ltd ...... 281 14. Kurt Adolph GMBH v. CBN...... 164 15. Macebuh v. N.D.I.C...... 510 16. N.B.N. v. T.A.S.A. Ltd...... 237 17. N.D.I.C. v. Afro Continental Nig. Ltd (No. 1)...... 308 18. N.D.I.C. v. Afro Continental Nig. Ltd (No. 2)...... 498 19. N.D.I.C. v. Enebros Motors Ltd ...... 598 20. N.D.I.C. v. Frank and Frank Const. Co Ltd...... 649 21. N.D.I.C. v. Kapital Securities Ltd (No. 1)...... 606 22. N.D.I.C. v. Nigeria Hardwood Co Ltd ...... 301 23. N.D.I.C. v. Crossland Finance and Inv. Ltd ...... 583 24. N.D.I.C. v. Taraku Mills Ltd ...... 523 25. Savannah Bank Nig. Ltd v. Salami...... 445 26. U.B.N. v. Scpok Nig. Ltd ...... 354 27. U.B.N. Ltd v. Osezuah ...... 401 28. Wema Bank Ltd v. BBC Brown Boveri Nig. Ltd .. 215

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INDEX OF SUBJECT MATTER

BANKING Account – Opening of a new Account by Bank and payment of cheque into Account – Duty of care of Bank – Extent of – When Bank can be said to be negligent – Proof of Wema Bank Ltd v. BBC Brown Boveri Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 215 Action against Federal Government, Central Bank or officers – Reliance on section 49(1) Banks and Other Fi- nancial Institutions Decree No. 25 of 1991 as defence – Onus to prove “Good faith” therein – Who on – Sec- tion 147 Evidence Act Cap 112 Laws of the Federa- tion of Nigeria, 1990 Kurt Adolph GMBH v. CBN [1994 – 1996] 6 N.B.L.R. (PART II) 164 Bank – Revocation of licence of – Winding-up of – Power of Central Bank to present petition – Section 38(4) Banks and Other Financial Institutions Decree No. 25 of 1991 Governor C.B.N. v. Alpha Merchant Bank Plc [1994 – 1996] 6 N.B.L.R. (PART II) 348 Bank Draft – A Banker’s draft drawn between two Branches of the same Bank – Whether qualifies as Bill of Exchange – Bank draft – Meaning of; Distinc- tion between Bank Draft and Cheque – Bills of Ex- change – Meaning of Dishonoured Bill of Exchange – Measure of damages thereto; Interest – Principle guiding award thereto – Holder of – Bank draft – Meaning of – Section 2(1) Bill of Exchange Act Cap 35 Laws of the Federation of Nigeria 1990 U.B.N. v. Scpok Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 354 Banker/Customer Relationship – Disputes arising from transaction between – Whether Federal High Court has jurisdiction to entertain Bi Zee Bee Hotels Ltd v. Allied Bank Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 436 xxiii [1994 – 1996] 6 N.B.L.R. (PART II)

Nigerian Banking Law Reports

BANKING – continued Banker and Customer Relationship – Indebtedness of Customer to a failed bank – Judgment for bank and debtor given time to pay judgment debt but defaulting – Right of Judgment Creditor to sell properties pledged as security – When Judgment Creditor can commence criminal prosecution against debtor under sections 13(2), 19(4) Failed Banks Decree No.18 of 1994 (as amended) N.D.I.C. v. Enebros Motors Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 598 Banker and Customer Relationship – Scope and extent – Obligation of banker to honour cheques drawn by customer – Relevant considerations Savannah Bank Nig. Ltd v. Salami [1994 – 1996] 6 N.B.L.R. (PART II) 445 Banking licence – Minister granting licence before incorporation – Whether a nullity – Party complaining that due process was not followed – Duty of person asserting F.R.N. v. Odebode [1994 – 1996] 6 N.B.L.R. (PART II) 1 Brokerages – Payment of Brokerages by Bank – How done F.R.N. v. Abubakar [1994 – 1996] 6 N.B.L.R. (PART II) 172 Central Bank of Nigeria – Application under section 36(a)Banks and Other Financial Institution Decree No. 25 of 1991 to purchase Bank for nominal fee of N1 earlier granted by Court without opposition by Counsel appearing for Bank – Shareholders of Bank seeking to set aside earlier order on grounds that they were not heard before earlier order given – Share- holders further alleging that counsel did not oppose the earlier order because he was appointed by Interim Management Board constituted by Central Bank – Whether earlier order will be set aside – Relevant considerations C.B.N. v. Ivory Merchant Bank Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 251 xxiv [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Subject Matter

BANKING – continued Central Bank of Nigeria – Application under section 36(a) Banks and Other Financial Institution Decree No. 25 of 1991 to purchase Bank for nominal fee of N1 – Need to give bank sought to be purchased opportunity to be represented before order is made, section 37(1) Banks and Other Financial Institution De- cree No. 25 of 1991 C.B.N. v. Ivory Merchant Bank Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 251 Central Bank of Nigeria – Purporting to acquire or purchase a bank for nominal fees – Steps Central Bank to take – Sections 32–38 Banks and Other Financial In- stitutions Decree No. 25 of 1991 C.B.N. v. Great Merchant Bank Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 488 Confirmed letters of credit – Meaning of – U.B.N. Ltd v. Osezuah [1994 – 1996] 6 N.B.L.R. (PART II) 401 Confirmed letters of credit – Nature of – U.B.N. Ltd v. Osezuah [1994 – 1996] 6 N.B.L.R. (PART II) 401 Directors of Company – Not to be joined in action against defunct bank at the Failed Banks Tribunal – Whether liable for debt owed to a Failed Bank automatically – Failed Banks Decree No. 18 of 1994 (as amended) N.D.I.C. v. Afro Continental Nig. Ltd (No. 1) [1994 – 1996] 6 N.B.L.R. (PART II) 308 Failed Banks Tribunal – Accomplices seeking Bail – Whether required to deposit half of amount involved in the offence – Section 26(2)(a) Failed Banks Decree No. 18 of 1994 (as amended) – Application for Bail – Accused willing to surrender assets as condition for Bail – Whether satisfies section 26(2)(a) Failed Banks Decree No. 18 of 1994 (as amended) – Bail – Inappli- cability of 1979 Constitutional provision thereto – Conditions for Bail – Agreement for repayment with

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BANKING – continued the bank – Whether qualifies as condition for bail under section 26 Failed Banks Decree No. 18 of 1994 (as amended) – Distinction whether offence charged punishable with option of fine or not – When relevant – Section 26(1), (2) Failed Banks Decree No. 18 of 1994 (as amended – Power of Tribunal to grant Bail – Scope, section 26(1), (2) Failed Banks Decree No. 18 of 1994 (as amended) F.R.N. v. Eze (No. 1) [1994 – 1996] 6 N.B.L.R. (PART II) 334 Failed Banks Tribunal – Proper way to deny indebtedness to a bank – Failure to deny specific allegation of indebtedness – Effect N.D.I.C. v. Nigeria Hardwood Co Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 301 Guarantee – Whether a credit facility within section 18(1)(b) Banks and Other Financial Institution Decree No. 25 of 1991 F.R.N. v. Odebode [1994 – 1996] 6 N.B.L.R. (PART II) 1 Interest – Failed Bank – Whether can continue to charge interest after its closure or declaration as a Failed Bank N.D.I.C. v. Kapital Securities Ltd (No. 1) [1994 – 1996] 6 N.B.L.R. (PART II) 606 Irrevocable letters of credit – Amendment or cancellation thereto – When can be done U.B.N. Ltd v. Osezuah [1994 – 1996] 6 N.B.L.R. (PART II) 401 Irrevocable letters of credit – Nature of U.B.N. Ltd v. Osezuah [1994 – 1996] 6 N.B.L.R. (PART II) 401 Loan – Borrower alleging repayment – Lender disputing – Onus of proof on borrower F.R.N. v. Odebode [1994 – 1996] 6 N.B.L.R. (PART II) 1 Loan – Disclosure of interest in loan by Director – When and how made F.R.N. v. Odebode [1994 – 1996] 6 N.B.L.R. (PART II) 1 xxvi [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Subject Matter

BANKING – continued Negligence – Liability of banker to non-customer – Prin- ciples governing Kareem v. U.B.N. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 281 Negligence – Negligent act of employee of banker – Ef- fect on the employers N.B.N. v. T.A.S.A. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 237 Offences – Charge of fraudulently granting credit facility without adequate security – Section 18(1) Banks and Other Financial Institutions Decree No. 25 of 1991 F.R.N. v. Ugwandu [1994 – 1996] 6 N.B.L.R. (PART II) 531 Offences – Section 19(3)(a) Banks and Other Financial Institution Decree No. 25 of 1991 – Reasonable steps required of an accused F.R.N. v. Odebode [1994 – 1996] 6 N.B.L.R. (PART II) 1 Offences – Stealing – Bank Customer given “Cheque purchase facility” contrary to rules and regularities of bank – Customer utilising the funds – Whether fact that is accepted banking practice can make it legal F.R.N. v. Ugwandu [1994 – 1996] 6 N.B.L.R. (PART II) 531 Offences – Under section 19(3)(a) Banks and Other Fi- nancial Institution Decree No. 25 of 1991 – Managing Director of a bank – Where a Director of a company not a subsidiary of the bank – Whether the fact of appointment by bank absolves him of criminal liability F.R.N. v. Odebode [1994 – 1996] 6 N.B.L.R. (PART II) 1 Section 49 Banks and Other Financial Institutions Decree No. 25 of 1991 Purport of – Whether ousts the Juris- diction of Court Kurt Adolph GMBH v. CBN [1994 – 1996] 6 N.B.L.R. (PART II) 164

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BANKING – continued The business or operation of a bank – Offences relating thereto under any enactment, Failed Banks Tribunal – Jurisdiction – Whether the Tribunal could try offences – Whether the Tribunal has the sole and exclusive jurisdiction to try offences relating to the business or operation of a bank under any other enactment apart from Banks and Other Financial Institutions Decree (BOFID) and the Nigeria Deposit Insurance Corpora- tion (NDIC) Decree – Whether the Tribunal could try offences committed before the commencement of the Failed Banks Tribunal? F.R.N. v. Eze (No. 2) [1994 – 1996] 6 N.B.L.R. (PART II) 465 Vicarious liability of banker – How determined – Wrong- ful act of bank employee – When binding on the bank N.B.N. v. T.A.S.A. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 237

BILLS OF EXCHANGE Requirement of presentation of bill of exchange – When may be dispensed with E.D. Tsokwa and Sons Ltd v. U.B.N. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 661 Section 48 Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 – Whether applicable where cheque was never presented E.D. Tsokwa and Sons Ltd v. U.B.N. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 661

CENTRAL BANK Purporting to acquire or purchase a bank for nominal fees – Steps to take – Sections 32–38 Banks and Other Fi- nancial Institutions Decree No. 25 of 1991 C.B.N. v. Great Merchant Bank Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 488 xxviii [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Subject Matter

COMPANIES Lifting the veil of Incorporation under Failed Banks De- cree No. 18 of 1994 (as amended) – When to do so – Resignation of Directors – Duty to comply with section 292(1), (4) and (5) Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990 – On whom lies – Whether on the resigning Director or the Company N.D.I.C. v. Afro Continental Nig. Ltd (No. 1) [1994 – 1996] 6 N.B.L.R. (PART II) 308

CRIMINAL LAW AND PROCEDURE Stealing – Money meant for payment of Brokerages found in employee’s private account – Effect – Sec- tion 383(2)(f ) Criminal Code – Duty of Trial Tribunal to return verdict of guilty or not guilty – Failure to do so – Rules 8 and 9 Schedule 2 Failed Banks Decree No. 18 of 1994 (as amended) – Section 20(5) of De- cree – When Trial Tribunal can have recourse to – Sentence – Trial Judge deeming it necessary not to impose sentence by virtue of section 20(5) of the De- cree – Necessity to indicate expressly or by necessary implication in Judgment that it is equitable so to do – Institution of Criminal proceedings under Failed Banks Decree No. 18 of 1994 (as amended) – Of- fences charged relate to state offences – Competence of Attorney General of the Federation or any authorised person to institute proceedings – Source of – Sec- tions 24(2), 28 Failed Banks Decree No. 18 of 1994 (as amended) F.R.N. v. Abubakar [1994 – 1996] 6 N.B.L.R. (PART II) 172

DAMAGES Award of damages by trial Court – When an Appellate Court can interfere thereto U.B.N. v. Scpok Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 354

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DISHONOURED CHEQUES OFFENCES Ingredients of offences under the Act – When Court will convict F.R.N. v. Ugwandu [1994 – 1996] 6 N.B.L.R. (PART II) 531

FAILED BANKS TRIBUNAL Application for recovery of debt – Contents thereof section 11(1) and (2) Failed Banks Decree No. 18 of 1994 (as amended) – Application for recovery of debt – Pleading security pledged – Rationale – Stating the name and address of the shareholders, directors etc. of debtor company – Whether useful – Section 15(5) Failed Banks Decree No.18 of 1994 (as amended) – Joinder of Shareholders, Directors, Proprietors, or Partners of an indebted Company in an application for recovery of debts before the Failed Banks Tribunal – Whether contemplated by section 11(1) and (2) Failed Banks Decree No. 18 of 1994 (as amended) N.D.I.C. v. Crossland Finance and Inv. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 583 Entry of appearance in civil matters, Paragraph 7, Sched- ule 1, Failed Banks Decree No. 18 of 1994 (as amended) – Address for service and name of occupier – Duty of respondent to insert – Respondent giving address for service and name of occupier – Occupier served with processes meant for respondent – Occu- pier not forwarding documents to respondent – Whether service thereby vitiated N.D.I.C. v. Taraku Mills Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 523 Evidence – Admissibility of – Relevancy the guiding factor F.R.N. v. Ugwandu [1994 – 1996] 6 N.B.L.R. (PART II) 531

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FAILED BANKS TRIBUNAL – continued Failed Banks Tribunal – Sentence – Application to back date commencement date of sentence – Application made after sentence passed – Propriety of – No full or substantial recovery of amount involved in offence at the time sentence imposed – Full recovery made thereafter – Whether revisiting of sentence possible – Section 20(5) Failed Banks Decree No. 18 of 1994 (as amended) – Powers of the Tribunal under section 20(5) Failed Banks Decree No. 18 of 1994 (as amended) – When can be invoked – Relevance of detention period – Failure of Tribunal to consider detention period before pronouncing – Remedy open to Applicant – Powers of under section 20(5) Failed Banks Decree No. 18 of 1994 (as amended) – When can be invoked F.R.N. v. Odogwu (No. 2) [1994 – 1996] 6 N.B.L.R. (PART II) 265 Interest on Judgment debt – Principles applicable N.D.I.C. v. Kapital Securities Ltd (No. 1) [1994 – 1996] 6 N.B.L.R. (PART II) 606 Judgment – Application to set aside Judgment in default on ground that parties contemplated settlement at the time Judgment given – Whether valid ground for setting aside judgment N.D.I.C. v. Taraku Mills Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 523 Judgment – Default judgment – Application to set aside on ground of non-service of hearing notice – Hearing notice served on occupier of address for service given by respondent – Occupier not forwarding documents to respondent – Whether judgment will be set aside, Paragraph 7, Schedule 1, Failed Banks Decree No. 18 of 1994 (as amended) N.D.I.C. v. Taraku Mills Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 523

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FAILED BANKS TRIBUNAL – continued Jurisdiction of in criminal matters – Bank not adjudged a failed bank – Whether Tribunal can entertain – Sec- tion 3(1)(a) Failed Banks Decree No. 18 of 1994 (as amended) F.R.N. v. Abubakar [1994 – 1996] 6 N.B.L.R. (PART II) 172 No provision for enlargement of time to appeal under the section 5(1) Failed Banks (Recovery of Debts) and Financial Malpractices Decree No. 18 of 1994 (as amended) N.D.I.C. v. Afro Continental Nig. Ltd (No. 2) [1994 – 1996] 6 N.B.L.R. (PART II) 498 Power of Failed Banks Tribunal to lift veil of incorporation in order to discover the directors behind the corporate veil Macebuh v. N.D.I.C. [1994 – 1996] 6 N.B.L.R. (PART II) 510 Recovery of bank loan – Whether a judgment debt awarded a banker by the High Court is recoverable by the Tribunal under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 – Whether the plea of res judicata could be raised by the judgment debtor in relation to the amount and interest claimed by the judgment creditor before the Tribunal N.D.I.C. v. Frank and Frank Const. Co Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 649 Right of appeal under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) Folbod Investments Ltd v. N.D.I.C. [1994 – 1996] 6 N.B.L.R. (PART II) 502 Service of process therein – Service on occupier at address for service given – Party complaining of non- receipt of process – Whether proper – Attitude of Tri- bunal – Paragraph 23(2) Schedule 1, Failed Banks Decree No. 18 of 1994 (as amended) N.D.I.C. v. Ta- raku Mills Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 523 xxxii [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Subject Matter

FAILED BANKS TRIBUNAL – continued Subsisting judgment of High Court – Failed Banks Tribu- nal – Duty of Tribunal to approve subsisting judgment of High Court Macebuh v. N.D.I.C. [1994 – 1996] 6 N.B.L.R. (PART II) 510 Trial of accused in absentia – When permissible – Section 27 Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No.18 of 1994 (as amended) F.R.N. v. Ugwandu [1994 – 1996] 6 N.B.L.R. (PART II) 531 Who can bring action on behalf of a Failed Bank N.D.I.C. v. Kapital Securities Ltd (No. 1) [1994 – 1996] 6 N.B.L.R. (PART II) 606

INTERPRETATION OF STATUTES Section 26(1), (2) Failed Banks Decree No. 18 of 1994 (as amended) – How interpreted – Scope of F.R.N. v. Eze (No. 1) [1994 – 1996] 6 N.B.L.R. (PART II) 334

JUDGMENTS AND ORDERS Modification of – Review of – Setting aside of – Princi- ples governing C.B.N. v. Ivory Merchant Bank Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 251

JURISDICTION Jurisdiction of the Federal High Court over disputes arising from transaction between Customer and the Bank – Whether exists – Section 230(1)(d) Constitution of the Federal Republic of Nigeria, 1979 Bi Zee Bee Ho- tels Ltd v. Allied Bank Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 436

NATURAL JUSTICE Audi alteram partem – Principles applicable C.B.N. v. Ivory Merchant Bank Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 251

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TORT Negligence – Meaning of – When action for negligence will lie Wema Bank Ltd v. BBC Brown Boveri Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART II) 215

WORDS AND PHRASES “Debt” in section 29 Failed Banks Decree No. 18 of 1994 (as amended) – Meaning – Judgment debt – Whether comes within Macebuh v. N.D.I.C. [1994 – 1996] 6 N.B.L.R. (PART II) 510 “Subject to subsection 2 of this section”, “Notwithstand- ing subsection (1) of this section”, “Deposits half the amount in the Tribunal as security for Bail” under section 26(1), (2) Failed Banks Decree No. 18 of 1994 (as amended) – Judicial interpretation of F.R.N. v. Eze (No. 1) 6 N.B.L.R. (PART II) 334

xxxiv INDEX OF NIGERIAN CASES REFERRED TO A A.C.B. v. A.G. Northern Nigeria (1967) N.M.L.R. 231 661 A.C.B. Ltd v. Apugo (1995) 6 N.W.L.R. (Part 399) 65 237 A.G. Kaduna State v. Hassan (1985) 2 N.W.L.R. (Part 8) 483 354 A.G. of Anambra State v. A.G. of the Federa- tion (1993) 6 N.W.L.R. (Part 302) 692 at 714 334 A.G. of Federation v. Sode (1990) 1 N.W.L.R. (Part 128) 500; (1990) 3 S.C.N.J. 14 164, 465, 583 A.G. of Lagos State v. Dosunmu (1989) 6 S.C.N.J. (Part 2) 153 164 Abiola v. FRN (1995) 3 N.W.L.R. (Part 382) 203 465 Abubakri v. Smith (1973) 1 All N.L.R. (N.S.) 634 1 Abusomwan v. Mercantile Bank Ltd (No.2) (1987) 3 N.W.L.R. (Part 60) 196 215 Adebowale v. Mil. Gov. of Ogun State (1995) 4 N.W.L.R (Part 392) 733 583 Adefulu v. Oyesile (1989) 5 N.W.L.R. (Part 122) 377 354 Adegoke v. Adibi (1992) 5 N.W.L.R. (Part 242) 410 661 Adeluyi v. Abidade 4 W.A.C.A. 169 354 Adeniji v. Adeniji (1972) 1 All N.L.R. (Part 1) 298 354 Adenuga v. LTC (1950) 13 W.A.C.A. 125 661 Aderemi v. Adedire (1966) N.M.L.R. 398 661 Adereti v. A.G. Western State (1965) All N.L.R. 266 172, 531 Adesanya v. President of the Republic of Ni- geria (1981) 5 S.C. 112 354

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Adesina v. Inspector General of Police 1956 1 F.S.C. 55 at 56 265 Adetipe v. Amodu (1969) N.M.L.R. 62 354 Adeyemo v. Arokopo (1988) 2 N.W.L.R. (Part 79) 703 281 Adimora v. Ajufo (1988) 3 N.W.L.R. (Part 80) 1 237 Aeroflot v. UBA (1986) 3 N.W.L.R. (Part 27) 188 354 Agbonmagbe Bank v. C.F.A.O. (1966) 1 All N.L.R. 140 281 Agunbiade v. Okunoga and Co. (1961) 1 A.N.L.R. 110 251 Aina v. The Trustees Nigerian Railway Cor- poration Pension Fund (1970) 1 All N.L.R 281 164 Ajao v. Alao (1986) 5 N.W.L.R. (Part 45) 802 354 Akinfolarin v. Akinnola (1994) 3 N.W.L.R. (Part 335) 659 354 Akinfosile v. Ijose (1960) S.C.N.L.R. 447 661 Akpapuna v. Nzeka (1983) 2 S.C.N.L.R. 1 308 Akwule v. Queen (1963) 1 All N.L.R. 193; (1963) N.S.C.C. Vol. 157; (1963) N.R.N.L.R. 105 1, 172 Alese v. Aladetuyi (1995) 6 N.W.L.R (Part 403) 527 583 Animashaun v. Osuma (1972) 1 All N.L.R. (Part 1) 368 354 Anya v. Iyayi (1993) 7 N.W.L.R. (Part 305) 290 at 16 164 Anyanwu v. Mbara (1992) 5 N.W.L.R. (Part 242) 386 661 Ariori v. Elemo (1983) 1 S.C.N.L.R. 1; (1983) S.C. 13 at 48–49 354, 510 Asomougha v. Mandillas Ent. Ltd (1985) 3 N.W.L.R. (Part 12) 325 172 Atano v. The State (1988) 2 N.W.L.R. (Part 75) 201 531 Awote v. Owodunni (No. 2)(1987) 2 N.W.L.R. (Part 57) 366 281 xxxvi [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

Ayoka v. Bello (1992) 1 N.W.L.R. (Part 218) 380 334 B Badejo v. Federal Min. of Education and others (1990) 3 N.W.L.R. (Part 143) 254 354 Bakare v. Apena (1986) 4 N.W.L.R. (Part 33) 1 281 Balogun v. Amubikanhum (1985) 3 N.W.L.R. (Part 11) 27 at 37 308, 354 Balogun v. National Bank of Nigeria (1978) 3 S.C. 155 Balonwu v. Isokariari (1994) 7 N.W.L.R. (Part 358) 587 354 Bature v. The State (1994) 1 N.W.L.R. (Part 320) 267 465 Bello v. A.G. Oyo State (1986) 5 N.W.L.R (Part 45) 828 583 Brown v. Citizens Life Assurance Co. (1902) 2 W.S.W.R. 212 237 Buraimoh v. Bamgbose (1989) 3 N.W.L.R. (Part 109) 352 401 C Carlen (Nig) Ltd v. Unijos (1994) 1 N.W.L.R. (Part 323) 631 354 Clark v. State (1986) 4 N.W.L.R. (Part 35) 381 531 Coker v. Olukoga (1994) 2 N.W.L.R. (Part 329) 648 354 Comm. for Local Govt. v. Ezemuokwe (1991) 3 N.W.L.R. (Part 181) 615 334 Commissioner of Lands, Mid-Western State v. Chief Francis Edo Osagie Vol. 8 (1973) N.S.C.C. 432 265 D Daboh v. The State (1977) N.S.C.C. Vol. II 309 at 322 172 Din v. African Newspapers Ltd (1990) 5 N.S.C.L.J. 209 at 217 301 Doherty v. Doherty (1964) N.M.L.R. 144 251 xxxvii [1994 – 1996] 6 N.B.L.R. (PART II)

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E Ebba v. Ogodo (1984) 1 S.C.N.L.R. 372 354 Ebueku v. Amola (1988) 2 N.W.L.R. (Part 75) 128 237 Egbongbonome v. State (1993) 3 N.W.L.R. (Part 306) 383 531 Egbunike v.ACB (1995) 2 N.W.L.R. (Part 375) 34 661 Ehimare v. Emhonyon (1985) 1 N.W.L.R. (Part 2) 177 661 Ekpo v. Calabar L.G.A (1993) 3 N.W.L.R. (Part 281) 324 465, 583 Ekwunife v. Wayne (W.A.) Ltd (1989) 5 N.W.L.R. (Part 122) 422 606, 649 Elendu v. Ekwoaba (1995) 3 N.W.L.R. (Part 386) 704 354 Emegokwe v. Okadigbo (1973) 4 S.C. 113 308 Enekebe v. Enekebe (1964) 1 All N.L.R. 103 172 Enitan v. The State (1986) 3 N.W.L.R. (Part 30) 604 531 Erim v. The State (1994) 5 N.W.L.R. (Part 346) 522 531 Esenwosu v. Ngonadi (1992) 3 N.W.L.R. (Part 228) 154 at 173 308 Ezomo v. Oyakhire (1985) 2 S.C. 260 at 274 510 F F.R.N. v. Abubakar (1997) 1 F.B.T.L.R. 129 334 Faro v. I.G.P. (1964) 1 All N.L.R. 6 1 Federal Housing Authority v. Sommer (1986) 1 N.W.L.R. (Part 17) 533 308 Federal Republic of Nigeria v. Abubakar (1997) 1 FBTLR 129 465 Financial Merchant Bank Ltd v. N.D.I.C. (1995) 6 N.W.L.R. (Part 400) 226 at 241 348 Foko v. Foko (1968) N.M.L.R. 441 at 444 164 G G. Gappa Ltd v. Shonubi (1994) 3 N.W.L.R. (Part 337) 215 at 224 354 xxxviii [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

George v. Dominion Flour Mills Ltd (1963) 1 ANLR 71 at 77 308 George v. UBA Ltd (1972) 8– 9 S.C. 264 354 Governor Anambra State v. Anah (1995) 8 N.W.L.R. (Part 412) 213 465 Gufwat v. State (1994) 2 N.W.L.R. (Part 327) 435 531 H Habib (Nig.) Bank Ltd v. Koya (1992) 7 N.W.L.R. (Part 251) 43 237 I Idahose v. Oronsaye (1959) S.C.N.L.R. 407 661 Idehen v. Idehen (1991) 6 N.W.L.R. (Part 198) 382 at 416 308 Ifezue v. Mbadugha (1984) 1 S.C.N.L.R. 427 354 Ijebu Ode Local Govt. v. Adedeji Balogun and Co. Ltd (1991) 1 N.W.L.R. (Part 166) 136 354 Ike v. Ugboaja (1993) 6 N.W.L.R. (Part 301) 539 661 Ikem v. The State (1985) 1 N.W.L.R. (Part 2) 378 531 Ikpeazu v. African Continental Bank Ltd (1965) NMLR 374 354 Imo Concorde Hotel Ltd v. Anya (1992) 4 N.W.L.R. (Part 234) 210 at 220 215 Imonikhe v. A.G. Bendel State (1992) 6 N.W.L.R. (Part 248) 396 281 Inoma Biriye v. Omoni (1989) 5 N.W.L.R. (Part 119) 60 164 Integrated Rubber Products Ltd v. Oviawe (1992) 5 N.W.L.R. (Part 243) 572 1 Itansehinwa v. Ikueduyi (1991) 3 N.W.L.R. (Part 179) 278 at 288 308 J James v. Mid-Motors Nigeria Co. Ltd (1978) 11– 12 S.C. 31 354

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K Kalio v. Kalio (1975) 2 S.C. 15 401 Kenrow Nigeria Ltd v. Moss (1987) 4 N.W.L.R. (Part 65) 362 1 Kodilinye v. Odu (1935) 2 WACA 336 401 Koiki v. First Bank Nigeria Plc (1994) 8 N.W.L.R. (Part 365) 665 265 Kotoye v. C.B.N. (1989) 1 N.W.L.R. (Part 98) 419 251 Kudoro v. Alaka (1956) 1 F.S.C. 82 172 L Labiyi v. Anretiola (1992) 8 N.W.L.R. (Part 258) 139 334 Ladoke v. Olabayo (1992) 8 N.W.L.R (Part 261) 614 583 Laguro v. Toku (1992) 2 N.W.L.R. (Part 223) 278 308 Lekwot v. Judicial Tribunal (1993) 2 N.W.L.R. (Part 276) 410 465 Lewis and Peat NRI Ltd v. Akhimien (1976) 7 S.C. 157 354 M Madike v. I.G.P. (1992) 3 N.W.L.R. (Part 227) 70 465 Majekodunmi v. The State (1952) 14 W.A.C.A. 64 531 Mattaradona v. Ahu (1995) 8 N.W.L.R. (Part 412) 225 465 Mayaki v. Lagos City Council Caretaker Committee (1977) 7 S.C. 81 354 Metal Construction (W.A) Ltd v. Migliore (1990) 1 N.W.L.R. (Part 126) 299 436 Metalloplastica (Nig.) Ltd v. N.D.I.C. (1997) 1 F.B.T.L.R. 171 510 Modupe v. State (1988) 2 N.W.L.R. (Part 87) 130 401 Mogaji v. Odofin (1978) 4 S.C. 91 401 xl [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

Morah v. Okwuayanga (1990) 1 N.W.L.R. (Part 125) 225 281 Mutual Aids Society Ltd v. Akerele (1965) 1 All N.L.R. 336 237 N Nwakudu v. C.O.P. (1978) 2 L.R.N. 108 531 N.B.N. Ltd v. Guthire (Nig) Ltd (1993) 3 N.W.L.R. (Part 284) 643 510 N.N.S.C. v. Alhaji Hamajoda Sabana Ltd (1988) 2 N.W.L.R (Part 74) 23 at 58 583 Nasr v. Berini (1968) 1 All N.L.R. 274 661 National Investment and Properties Co. Ltd v. Bank of West Africa Ltd (1962) 2 S.C.N.L.R. 324 401 Nigerian Bottling Co. Ltd v. Ngonadi (1985) 1 N.W.L.R. (Part 4) 739 215 Nigerian Maritime Services Ltd v. Afolabi (1978) 2 S.C. 79 661 Nigerian Ports Authority v. Construzoni Gen- eralie Farsura Cogefar SPA (1974) 12 S.C. 81 661 NIPC v. The Thompson Organisation Ltd (1969) N.M.L.R. 99 354 Njovens v. The State (1973) All N.L.R. (Part 1) 481 531 Nkwocha v. Gov. of Anambra State (1984) 1 S.C.N.L.R. 634 354 Nsirim v. Nsirim (1990) 3 N.W.L.R. (Part 138) 285 237 Nwabuoku v. Ottih (1961) 2 S.C.N.L.R. 232 237 Nwadike v. Ibekwe (1987) 4 N.W.L.R. (Part 67) 718 436 Nwankwo v. The State (1990) 2 N.W.L.R. (Part 134) 627 531 Nwede v. The State (1985) 3 N.W.L.R. (Part 13) 444 531 Nwokoro v. Nwosu (1994) 4 N.W.L.R. (Part 337) 172 354

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Nwosu v. State (1986) 4 N.W.L.R. (Part 35) 348 531 Nzeribe v. Dave Engineering Co. Ltd (1994) 8 N.W.L.R. (Part 361) 124 354 O Obakpolor v. State (1991) 1 N.W.L.R. (Part 165) 113 465 Obatoyinbo v. Oshatoba (1996) 5 N.W.L.R. (Part 450) 531 436 Obere v. Board of Management Eko Baptist Hospital (1978) 6–7 S.C. 15 354 Obi v. Owolabi (1990) 5 N.W.L.R. (Part 153) 702 237 Obi v. Ozor (1991) 9 N.W.L.R. (Part 213) 94 at 109 308 Obikoya and Sons v. Gov. Lagos State (1987) 1 N.W.L.R (Part 50) 385 583 Odiwe v. Obor (1974) 1 All N.L.R. 436 164 Odudu v. Atoyebi (1987) 2 N.W.L.R. (Pt 58) 660 401 Odumosu v. A.C.B. Ltd (1976) 11 S.C. 55 354 Ogba v. The State (1990) 3 N.W.L.R. (Part 139) 505 531 Ogbechie v. Onochie (1986) 2 N.W.L.R. (Part 23) 484 436 Ogbomor v. State (1985) 1 N.W.L.R. (Part 2) 223 1 Ogbuehi v. The Gov. of Imo State (1995) 9 N.W.L.R. (Part 417) 53 354 Ojo-Osagie v. Adonri (1994) 6 N.W.L.R. (Part 349) 131 354 Okafor v. Attorney General of Anambra State (1991) 6 N.W.L.R. (Part 200) 659 251, 465 Okagbue v. Romaine (1982) All N.L.R. 111 at 121 308 Okeowo v. Migliore (1979) 11 S.C. 138 281 Okoroafor v. Misc. Offences Tribunal (1995) 4 N.W.L.R. (Part 387) 59 465 xlii [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

Okosi v. The State (1989) 1 N.W.L.R. (Part 100) 642 531 Okpala v. Ibeme (1989) 2 N.W.L.R. (Part 102) 208 401 Okuarume v. Obabokor (1965) 1 All N.L.R. 360 661 Okubule v. Oyagbola (1990) 4 N.W.L.R. (Part 147) 723 661 Okupe v. Ifemembi (1974) 3 S.C. 97 237 Olagunju v. Raji (1986) 5 N.W.L.R. (Part 42) 408 445 Olu of Warri v. Kperegbeyi (1994) 4 N.W.L.R. (Part 339) 416 354 Omoboriowo v. Ajasin (1984) 1 S.C.N.L.R. 108 308 Omonfoman v. Okoeguale (1986) 5 N.W.L.R. (Part 40) 179 401 Onagoruwa v. The State (1993) 7 N.W.L.R. (Part 303) 79 531 Onifade v. Olayiwola (1990) 7 N.W.L.R. (Part 161) 130 281 Onwuka v. Taymani (1965) N.C.L.R. 203 at 216 1 Onyeanusi v. Misc offences Tribunal (1995) 8 N.W.L.R. (Part 415) 628 465, 583 Oredoyin v. Arowolo (1989) 4 N.W.L.R. (Part 114) 172 354 Orizu v. Anyaeghunam (1978) 5 S.C. 21 308 Osafile v. Odi (1994) 2 N.W.L.R. (Part 325) 125 354 Osakwe v. Governor of Imo State (1991) 5 N.W.L.R. (Part 191) 318 at 339 308 Oseni v. Dawodu (1994) 4 N.W.L.R. (Part 339) 390 354 Oshinjinrin v. Elias (1970) 1 All N.L.R. 153 354 Overseas Construction Ltd v. Creek Enter- prises Ltd (1988) 3 N.W.L.R. (Part 13) 467 at 414 308

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Oyediran v. The Republic (1966) 4 N.S.C.C. 252 at 255; (1967) NMLR 122 at 125 265 Oyewunmi v. Ogunesan (1990) 3 N.W.L.R. (Part 137) 182 1 Q Queen v. Owoh (1962) All N.L.R. 653 (N.S. (Part 2) 1 R R v. Lawrence (1933) 11 N.L.R. Page 6 at 8 265 Re-Adetona (1994) 3 N.W.L.R. (Part 333) 481 354 Resident, Ibadan Province v. Lagunju (1954) 14 WACA 549 at 554 172 Rivway Lines Ltd v. R.M.U. (1993) 7 N.W.L.R. (Part 308) 692 308 S Salami v. Savannah Bank Nig. Ltd (1990) 1 N.W.L.R. (Part 130) 106 354 Sea Trucks (Nig) Ltd v. Pyne (1995) 6 N.W.L.R (Part 400) 166 583 Sele v. The State (1993) S.C.N.J. 15 465 Shazali v. State (1988) 5 N.L.W.R. (Part 93) 79 531 Shell Petroleum Dev. Co. (Nig.) Ltd v. Tieba VII (1996) 4 N.W.L.R. (Part 445) 657 354 Skenconsult (Nig) Ltd v. Ukey (1980) 1 S.C. 6 510 Sobogun v. Sanni (1974) 1 All N.L.R. (Part 2) 311) 36 510 Sodipo v. Lemminkainen OY (1985) 2 N.W.L.R. (Part 8) 547 308 Solanke v. Ajibola (1969) N.M.L.R. 253 172, 354 State v. Gwonto (1983) 1 S.C.N.L.R. 142 354 State v. Onagoruwa (1992) 2 N.W.L.R. (Part 221) 33 354, 465 T Tafida v. Abubakar (1992) 3 N.W.L.R. (Part 230) 511 465, 583 xliv [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

The State v. Aje (1989) 1 L.R.N. 281 531 The State v. Williams (1978) N.S.C.C. Vol. 38 at P. 45 172 Thomas v. Olufosoye (1986) 1 N.W.L.R. (Part 18) 669 354 Thomas v. Police (1949) 12 W.A.C.A. 490 172 Tikatore Press Ltd v. Umar (1968) 2 All N.L.R 107 583 Tometi v. Ajaguna (1975) N.M.L.R. 122 354 Total Nig. Ltd v. Nwako (1978) 5 S.C. 1 308 Trenco (Nig) Ltd v. African Real Estate and Investment Company Ltd (1978) 4 S.C. 9 510 Tukur v. Govt. of Gongola State (1989) 5 N.W.L.R. (Part 117) 517 at 542 308 U United Bank for Africa Ltd v. Auhoru (1990) 6 N.W.L.R. (Part 156) 254 215 U.B.N. Ltd v. Odusote Bookstores (1995) 9 N.W.L.R (Part 421) 558 583 U.D.C. v. Ladipo (1971) 1 N.M.L.R. 81 at 85 308 Ugwu v. Aba (1961) All. N.L.R. 438 251 Uka v. Irolo (1996) 4 N.W.L.R. (Part 44) 218 354 Union Bank Nigeria Ltd v. Nwoye (1990) 2 N.W.L.R. (Part 130) 69 354 W Ward v. Tresco Stores Ltd (1976) 1 All N.L.R. 219 215 Williams v. Daily Times of Nigeria Ltd (1990) 1 N.W.L.R. (Part 124) 1 354 Williams v. Voluntary Funds Society (1982) 1–2 S.C. 145 172 Wuraola v. Northern Assurance Co. (1967) N.M.L.R 31 164 Y Yalaju-Amaye v. A.R.E.C. Ltd (1990) 4 N.W.L.R. (Part 145) 422 354 Yoye v. Olubode (1974) 10 S.C. 209 649 xlv

INDEX OF FOREIGN CASES REFERRED TO A Anns v. Morian London Borough Council (1978) A.C. 728 215

B Banque Populaire de Bienne v. Cave (1895) 1 Com Case 67 354 Blackburn v. Attorney-General (1971) 1 W.L.R. 1037 354 Blyth v. Birmingham Water Works Co. (1856) 11 Ex. 781, 25 L.J. Ex. 212, W.R. 204 Bourhill v. Young (1943) A.C. 92 at 107

C Capital and Counties Bank v. Gordon (1903) A.C. 240 354 Commonwealth Shipping Representative v. P and O Branch Services (1823) A.C. 191 354 Connally v. General Construction Co. (1926) 269 U.S. 385 at 391 465 Couriets Case (1978) A.C. 425 354

D Deyong v. Shenburn (1946) 1 A.E.R. 226 215 Dean v. Hiester (1942) All E.R. 34 1 Donoghue v. Stevenson (1932) A.C. 562 215 Dunlop Pneumatic Tyre Co. Ltd v. Selfridge and co. Ltd (1915) A.C. 847 354

E Ealing v. London Borough Council (1972) A.C. 342 at 363 1 Evans v. Bartlam 1973 A.C. 473 172

F Falcon v. Famous Players (1926) 2 K.B. 474 1

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G General and Finance Facilities Ltd v. Cooks Cars (Ramford) Ltd (1963) 1 W.L.R. 644 401 Gordon v. London City and Midland Bank Ltd (1903) A.C. 240 281 Govt. of Kelantan v. Duff Development Co. Ltd (1923) A.C. 395 445 H Hadley v. Baxendale (1843 – 60) All E.R. Rep. 461 215, 401 Hart v. Lanci and Yorks Rail Co. (1869) 21 L.T. 261 I In Re English Bank of River Plate (1893) 2 Ch.D 438 354 J Jordan v. De George (1951) 342 U.S. 223 465 K Kay v. Goodwin 130 E.R. 1403 1 M McGowan v. Dyer (1873) L.R. 8 QB 141 237 Macfoy v. UAC (1961) W.L.R. 1405; (1961) 3 All.E.R. 1169 251, 531 Manchester and Milford Railway Co. Exparte Cambrian Rly. Co. (1880) 14 Ch. D P 645 510 Marzetti v. Williams (1830) IB. and Ad. 415 445 Morris v. Kanseen (1946) A.C. 459 1 O Osenton v. Johnson (1942) A.C. 130 at Page 138 172 P Pavia and Co. S.P.A. v. Thurmann Neilsen (1952) 2 Q.B. 84 at 88 401 Pearson v. Broadbent (1870) 36 J.P. 485 1 xlviii [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Foreign Cases referred to

Phillips v. Innes (1837) 4 C1 and F234 at 241 1 Pickering v. Illfracombe Railing L.R. 3 C.P. 235 at 250 1 R R v. Crockett (1992) 21 Cr. App. R. 164 265 R v. Drusdale (1978) 1 N.S.W.L.R. 704 1 R v. Mucahy (1868) 3 H.L. 306 531 Re: Vandervell’s Trust (No. 2) v. Vandervell Trustees Ltd (1974) 3 All E.R. 205 661 Read v. Brown (1889) 22 q.B.D. 128 661 Rosenthal v. Alderson and Sons (1946) 1 K.B. 374 401 Rothschild v. Royal Mail Steam Packet Co. (1851) 18 L.T. 334 S Skinner v. Carter (1948) 1 Ch.D. 387 1 Strongman (1945) LD v. Sincock (1955) 2 Q.B. 525 445 T Tucker v. Bennet 38 Ch.D. 1 445 U Underwood Ltd v. Bank of Liverpool and Martins (1924) 1 K.B. 775 281 W Webster v. Higgin (1948) 2 All E.R. 127 445 Weller v. Foot and Mouth Disease Research Institute (1965) 3 All E.R. 560 215 Williams v. United States (1951) 341 U.S. 97 465 Winters v. New York 333 U.S. 507 465

xlix

INDEX OF NIGERIAN STATUTES REFERRED TO

Banking Act Cap 28 Laws of the Federation of Nigeria, 1990 s 1...... [1994 – 1996] 6 N.B.L.R. (PART II) 1 s 2...... [1994 – 1996] 6 N.B.L.R. (PART II) 1 Banks and Other Financial Institutions Decree No. 25 of 1991 s 2...... [1994 – 1996] 6 N.B.L.R. (PART II) 164, 1 s 18(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 531 s 18(1)(a)...... [1994 – 1996] 6 N.B.L.R. (PART II) 1 s 18(1)(b) ...... [1994 – 1996] 6 N.B.L.R. (PART II) 1 s 19(3)(a) ...... [1994 – 1996] 6 N.B.L.R. (PART II) 1 s 20(2)(a)(ii) .....[1994 – 1996] 6 N.B.L.R. (PART II) 1 s 32...... [1994 – 1996] 6 N.B.L.R. (PART II) 488 s 33...... [1994 – 1996] 6 N.B.L.R. (PART II) 488 s 38...... [1994 – 1996] 6 N.B.L.R. (PART II) 348 s 46(a)...... [1994 – 1996] 6 N.B.L.R. (PART II) 1 s 49...... [1994 – 1996] 6 N.B.L.R. (PART II) 164 Bill of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 s 2(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 354 s 3(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 354 s 5(2)...... [1994 – 1996] 6 N.B.L.R. (PART II) 354 s 46...... [1994 – 1996] 6 N.B.L.R. (PART II) 661 s 48...... [1994 – 1996] 6 N.B.L.R. (PART II) 661 Companies and Allied Matters Cap 59 Laws of the Fed- eration of Nigeria, 1990 s 290...... [1994 – 1996] 6 N.B.L.R. (PART II) 308 s 292(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 308 s 292(4)...... [1994 – 1996] 6 N.B.L.R. (PART II) 308 s 292(5)...... [1994 – 1996] 6 N.B.L.R. (PART II) 308

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Constitution of the Federal Republic of Nigeria, 1979 s 160(1)(a) ... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 190(1)(a) ... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 230(1)(a) ... [1994 – 1996] 6 N.B.L.R. (PART II) 436 s 230(1)(b) ... [1994 – 1996] 6 N.B.L.R. (PART II) 436 s 230(1)(d) ... [1994 – 1996] 6 N.B.L.R. (PART II) 436 s 274(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 172

Constitution (Suspension and Modification) Decree No. 107 of 1993 [1994 – 1996] 6 N.B.L.R. (PART II) 436

Court of Appeal Act Cap 75 Laws of the Federation of Nigeria, 1990 s 16...... [1994 – 1996] 6 N.B.L.R. (PART II) 281

Criminal Code Act Cap 77 Laws of the Federation of Ni- geria, 1990 s 309(7)...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 382 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 383(2)(f )... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 390(9)...... [1994 – 1996] 6 N.B.L.R. (PART II) 531 s 435(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 435(2)(b) ... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 435(2)(c)... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 438...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 516...... [1994 – 1996] 6 N.B.L.R. (PART II) 172

Criminal Procedure Act Cap 80 Laws of the Federation of Nigeria, 1990 s 167...... [1994 – 1996] 6 N.B.L.R. (PART II) 465

Dishonoured Cheques Offences Act Cap 102 Laws of the Federation of Nigeria, 1990 s 1...... [1994 – 1996] 6 N.B.L.R. (PART II) 531

lii [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Nigerian Statutes referred to

Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990 s 19...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 20(3)(a) ..... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 21...... [1994 – 1996] 6 N.B.L.R. (PART II) s 132...... [1994 – 1996] 6 N.B.L.R. (PART II) 445 s 135....[1994 – 1996] 6 N.B.L.R. (PART II) 401, 661 s 136...... [1994 – 1996] 6 N.B.L.R. (PART II) 401 s 140...... [1994 – 1996] 6 N.B.L.R. (PART II) 661 s 147...... [1994 – 1996] 6 N.B.L.R. (PART II) 164 s 149(c)...... [1994 – 1996] 6 N.B.L.R. (PART II) 401 s 149(d)...... [1994 – 1996] 6 N.B.L.R. (PART II) 661 s 150(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 1

Failed Banks (Recovery of Debts) and Financial Mal- practices in Banks Decree No. 18 of 1994 (as amended) s 3(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 334 s 3(1)(a) ...... [1994 – 1996] 6 N.B.L.R. (PART II) 172, 649 s 3(1)(b) ...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 3(1)(c) ...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 3(1)(d) ...... [1994 – 1996] 6 N.B.L.R. (PART II) 172, 465 s 3(3)(b)(ii) .. [1994 – 1996] 6 N.B.L.R. (PART II) 510 s 3(2)....[1994 – 1996] 6 N.B.L.R. (PART II) 265, 334 s 4(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 502 s 5(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 172, 502, 498 s 9...... [1994 – 1996] 6 N.B.L.R. (PART II) 649 s 11...... [1994 – 1996] 6 N.B.L.R. (PART II) 649 s 11(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 301, 583 s 11(2)...... [1994 – 1996] 6 N.B.L.R. (PART II) 308 s 11(2)(a) ..... [1994 – 1996] 6 N.B.L.R. (PART II) 583

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Failed Banks (Recovery of Debts) and Financial Mal- practices in Banks Decree No. 18 of 1994 (as amended) – continued s 11(2)(b) ..... [1994 – 1996] 6 N.B.L.R. (PART II) 583 s 11(2)(c) ..... [1994 – 1996] 6 N.B.L.R. (PART II) 583 s 11(2)(d) ..... [1994 – 1996] 6 N.B.L.R. (PART II) 583 s 11(2)(e) ..... [1994 – 1996] 6 N.B.L.R. (PART II) 583 s 13(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 583 s 13(2)..[1994 – 1996] 6 N.B.L.R. (PART II) 583, 598 s 15(5)...... [1994 – 1996] 6 N.B.L.R. (PART II) 583 s 15(7)..[1994 – 1996] 6 N.B.L.R. (PART II) 308, 583 s 16(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 583 s 16(2)...... [1994 – 1996] 6 N.B.L.R. (PART II) 583 s 17...... [1994 – 1996] 6 N.B.L.R. (PART II) 649 s 18...... [1994 – 1996] 6 N.B.L.R. (PART II) 649 s 19(4)...... [1994 – 1996] 6 N.B.L.R. (PART II) 598 s 20(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 20(1)(d) ..... [1994 – 1996] 6 N.B.L.R. (PART II) 598 s 20(2)...... [1994 – 1996] 6 N.B.L.R. (PART II) 265 s 20(3)...... [1994 – 1996] 6 N.B.L.R. (PART II) 265 s 20(5)..[1994 – 1996] 6 N.B.L.R. (PART II) 172, 265 s 24...... [1994 – 1996] 6 N.B.L.R. (PART II) 598 s 24(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 24(2)...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 25...... [1994 – 1996] 6 N.B.L.R. (PART II) 598 s 26(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 334 s 26(2)...... [1994 – 1996] 6 N.B.L.R. (PART II) 334 s 27...... [1994 – 1996] 6 N.B.L.R. (PART II) 531 s 28...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 29. [1994 – 1996] 6 N.B.L.R. (PART II) 1, 510, 649

Interpretation Act Cap 192 Laws of the Federation of Nigeria, 1990 s 6...... [1994 – 1996] 6 N.B.L.R. (PART II) 1 liv [1994 – 1996] 6 N.B.L.R. (PART II)

Index of Nigerian Statutes referred to

Limitation Law Cap 69 Laws of Bendel State, 1959 s 4(4) ...... [1994 – 1996] 6 N.B.L.R. (PART II) 649

Recovery of Public Property (Special Military Tribunal) Act Cap 389 Laws of the Federation of Nigeria, 1990 s 20(a)...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 s 20(d)...... [1994 – 1996] 6 N.B.L.R. (PART II) 172

Supreme Court Act Cap 424 Laws of the Federation of Nigeria, 1990 s 22...... [1994 – 1996] 6 N.B.L.R. (PART II) 281

INDEX OF FOREIGN STATUTE REFERRED TO

Bills of Exchange Act, 1882 s 57...... [1994 – 1996] 6 N.B.L.R. (PART II) 354

lvii

INDEX OF NIGERIAN RULES OF COURT REFERRED TO

Court of Appeal Rules, 1981 (as amended) Cap. 62 Laws of the Federation of Nigeria, 1990 Order 1 Rule 21(1)...... [1994 – 1996] 6 N.B.L.R. (PART II) 281

Failed Banks (Recovery of Debts) and Financial Mal- practices in Banks Decree No. 18 of 1994 (as amended) Schedule 1 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 498 Schedule 1 Rule 13 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 583 Schedule 2 Rule 8 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 Schedule 2 Rule 9 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 172 Schedule 22(1) ...... [1994 – 1996] 6 N.B.L.R. (PART II) 498 Paragraph 7(1) Schedule 1 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 523 Paragraph 23(2) Schedule 1 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 523

Federal High Court (Court Procedure) Rules Cap. 134 Laws of the Federation of Nigeria, 1990 Order IV Rule 3 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 583 Order IV Rule 5 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 583 Order X Rule 5(2) ...... [1994 – 1996] 6 N.B.L.R. (PART II) 583 Order 31 Rule 9 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 301

lix High Court Rules of Eastern Nigeria, 1963 (Applicable in Rivers State in 1986) Order 33 Rule 5 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 354 Order 33 Rule 6 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 354 Order 33 Rule 9 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 354 Order 33 Rule 10 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 354 Order 33 Rule 11 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 354

lx INDEX OF BOOKS REFERRED TO

Archbold (43ed) paragraph 5 ..[1994 – 1996] 6 N.B.L.R. (PART II) 265 Bingham’s Motor Claims (7ed) page 4 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 215 Black’s Law Dictionary (5ed) generally ...... [1994 – 1996] 6 N.B.L.R. (PART II) 583 Black’s Law Dictionary (6ed) Centennial Edition, 1891 – 1991 page 145 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 354 Byles on Bills of Exchange (23ed) Cap. 28 page 347 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 354 Clerk & Lindsell on Torts (14ed) – Paragraphs 859, 991–994 and 1007 .....[1994 – 1996] 6 N.B.L.R. (PART II) 215, 237 Criminal Law and Procedure by Aguda (10ed) page 224, Paragraph 584 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 265 Dictionary of Law by P.H. Collin generally ...... [1994 – 1996] 6 N.B.L.R. (PART II) 583 Halsbury’s Laws of England, Volume 2, Article 374 page 202 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 354 Halsbury’s Laws of England, Volume 4 (4ed) paragraph 502 ...... [1994 – 1996] 6 N.B.L.R. (PART II)354 Littleton S. 667 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 401

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Mcgregor on Damages (13ed) Paragraphs 205 P.145, 795 P. 543 and 804 pages 549–550 ...... [1994 – 1996] 6 N.B.L.R. (PART II)54 Paget’s Law of Banking (8ed) page 643 ...... [1994 – 1996] 6 N.B.L.R. (PART II) 401

lxii [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE)

Federal Republic of Nigeria v. Michael Oladisun Odebode 1 a Federal Republic of Nigeria v. Michael Oladisun Odebode b FAILED BANKS TRIBUNAL, ENUGU ZONE NZEAKO J Date of Judgment: 29 MARCH 1996 Suit No.: FBT/EZ/O1C/95 c Banking – Banking licence – Minister granting licence before incorporation – Whether a nullity – Party complaining that due process was not followed – Duty of person asserting d Banking – Guarantee – Whether a credit facility within section 18(1)(b) Banks and Other Financial Institutions Decree No. 25 of 1991 e Banking – Loan – Borrower alleging repayment – Lender disputing – Onus of proof on borrower Banking – Loan – Disclosure of interest in loan by director – When and how made f Banking – Offences – Section 19(3)(a) Banks and Other Fi- nancial Institutions Decree No. 25 of 1991 – Reasonable steps required of an accused g Banking – Offences – Under section 19(3)(a) Banks and Other Financial Institutions Decree No. 25 of 1991 – Man- aging director of a bank – Where a director of a company not a subsidiary of the bank – Whether the fact of appoint- h ment by bank absolves him of criminal liability

Facts The accused, being managing director of Group Merchant i Bank Limited and while being the managing director granted various loans and advances to corporate entities in which he had substantial interests and in fact was a director in all the corporate entities, without disclosing his interest in j the said loans and advances to the bank. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE)

2 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

He was charged before the Tribunal on a 15-count charge a detailing various sums of money so advanced to various corporate entities. The accused contended inter alia that there was a defect in the charge and that the charge was not b framed in such a way as to give the accused the full particulars of the offences committed; and also that the accused could not be convicted as there was no licence properly granted to the bank as there was no corporate legal entity before the grant of a banking licence. c Held – 1. That the defect in the charge was not substantial as to mislead the accused, or at variance with the evidence d adduced before the Tribunal. 2. The bank director by virtue of section 190 of the Com- panies Act, 1968 or section 277 of the Companies and Allied Matters Act, 1990 and section 18(1)(a) or 18(3) e of the Banks and Other Financial Institutions Decree (BOFID) had to disclose his interest in any loan or advance to the board of directors and to the company in general meeting. f 3. The Minister only needs to look at the Memorandum and Articles of Association of the proposed bank seeking a banking licence and not the Certificate of Incorporation under sections 1 and 2 of the Banking Act. g 4. A person is said to have an interest in a thing when he has rights, advantages, duties, liabilities, losses or the like connected with it, whether present or future, ascertained or potential, provided that the connection, and in the case of potential rights, the possibility, is not too re- h mote. 5. The interest of a director and shareholder in financial or other benefits accruing to his company is personal in the first instance and not remote. i 6. The important elements necessary and which is to be proved for an offence under section 18(1)(b) of BOFID are that loans were granted to each of the five companies in the instant case, in the sum involved, that the grant of j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE)

Federal Republic of Nigeria v. Michael Oladisun Odebode 3 a the loans was unauthorised and the loans were unsecured and the accused, in granting these loans as he did, contravened the law. b 7. Since the accused person duly entered into the contract of employment with the bank and had duly benefitted from the bank, he could not rely on a self induced illegality (to wit his appointment was null and void because c at the time he was appointed managing director he was already a director in some other companies) to escape liability for the wrongs which he had committed. 8. Section 46 of BOFID by its language places on any per- d son being a director or manager of a bank the responsibility to take all reasonable steps to secure compliance by the bank with the requirements of the Decree and to take all reasonable steps to secure the correctness of any e statement submitted under the provision of the Decree. 9. There is nothing in the words of section 46 to import joint contravention of all directors or managers. The accused as a director of the bank and its managing director f at all times material to this charge could be convicted alone. This, however, was without prejudice to the rights of the complainant to proceed against any other director or manager that was deemed to have contravened these g or other provisions of the law. 10. The reasonable steps required of the accused under section 19(3)(a) of BOFID are to show the measure of good faith and responsibility expected of a person in the posi- h tion of the accused by disclosing his directorship and interest in the companies he had shares in or owned. 11. The Failed Banks Decree No. 18 of 1994 in section 29 defines the word “loan” to include “an advance, a guar- i antee and any other credit facility”. Therefore, a guarantee is a credit facility and is included in section 18(1) of BOFID. 12. One basic principle of the law of evidence is that he who j asserts must prove. When any loan is granted and there [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE)

4 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

is a dispute as to repayment, the onus is on the borrower a to prove it. 13. By the provisions of section 150(1) of the Evidence Act, when any judicial or official Act is done in a manner b substantially regular, it is required that formal requisites for its validity are complied with and a party who complains that due process has not been followed as the defence in this case did, has the onus to prove it, not by c tendering or relying on the end result, but by evidence to show failure to follow due process. In the instant case, the onus is on the accused to prove the irregularity in the grant of a banking licence to the Group Merchant Bank. d Accused convicted on all counts.

Cases referred to in the judgment Nigerian e Abubakri v. Smith (1973) 1 All N.L.R. (N.S.) 634 Akwule v. Queen (1963) N.S.C.C. Volume 157; (1963) N.R.N.L.R. 105 Faro v. I.G.P. (1964) 1 All N.L.R. 6 f Integrated Rubber Products Ltd v. Oviawe (1992) 5 N.W.L.R. (Part 243) 572 Kenrow Nigeria Ltd v. Moss (1987) 4 N.W.L.R. (Part 65) 362 g Ogbomor v. State (1985) 1 N.W.L.R. (Part 2) 223 Onwuka v. Taymani (1965) N.C.L. 203 at 216 Oyewunmi v. Ogunesan (1990) 3 N.W.L.R. (Part 137) 182 Queen v. Owoh (1962) All N.L.R. 653 (N.S. (Part 2) h Foreign Dean v Hiesler (1942) 2 All E.R. 340 Ealing London Borough Council v. Race Relations Board i (1972) A.C. 342 at 363 Falcon v. Famous Players (1926) 2 K.B. 474 Hinton Demolition Property (Pty) Ltd v. Lower (1971) S.A.S.R. 512 j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE)

Federal Republic of Nigeria v. Michael Oladisun Odebode 5 a Kay v. Goodman 130 E.R. 1403 McDougall v. Gardiner Ch.D. 13 Morris v. Kanssen (1946) A.C. 459 b Pearson v. Broadbent (1870) 36 J.P. 485 Phillips v. Innes (1837) 4 C.1 and F.234 at 241 Pickering v. Illfracombe Railing L.R. 3 C.P. 235 at 250 R v. Drysdale (1978) 1 N.S.W.L.R. 704 c Skinner v. Carter (1948) 1 Ch.D. 387 Thames Mersey Marine Insurance Company v. Hamilton (1887) 12 A.C. 484 d Wilkinson v. Barkin Corporation (1948) K.B. 721 Nigerian statutes referred to in the judgment Banking Act, Cap 28 Laws of the Federation of Nigeria, e 1990, sections 1 and 2 Banks and Other Financial Institutions Decree No. 25 of 1991, sections 2, 18(1)(a), (b); 19(3)(a); 20(2)(a)(ii); 46(a) Evidence Act, Cap 112 Laws of the Federation of Nigeria, f 1990, section 150(1) Failed Banks (Recovery of Debts) and Financial Malprac- tices in Banks Decree No. 18 of 1994 (as amended), section 29 Interpretation Act, Cap 192 Laws of the Federation of Nige- g ria, 1990, section 6 Counsel For the prosecution: Ngige h For the accused: Williams, S.A.N.

Judgement NZEAKO J: The accused, Michael Oladisun Odebode of i 39A Park View Estate Ikoyi, Lagos, was first arraigned before this Tribunal on a 13-count charge, by virtue of section 3 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994. Out of these, j 12 counts charged him with infringing various sections of [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 6 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the Banks and Other Financial Institutions Decree (BOFID), a No. 25 of 1991, and one count with section 12(1)(b) of the Banking Act, Cap 28 Laws of the Federation of Nigeria, 1990. b When the charges were read to the accused, he pleaded NOT GUILTY to each of the 14 counts. Before trial commenced, the Tribunal first heard arguments on a summons for bail, filed on behalf of the accused person. Bail was granted c to the accused in a considered Ruling of the Tribunal, delivered on 8th January, 1996 and by order of the tribunal made on 12th January, 1996 which set out terms for bail pursuant to section 26(2) of the Failed Banks . . . Decree. d Accompanying the charge was a summary of evidence sought to be led by the prosecution, the list of witnesses for the prosecution and their addresses. Before trial commenced on 8th January, 1996, the learned e prosecutor, Emeka Ngige, Esq. applied to amend the charge by substituting a new one. The application, which was not opposed by the defence counsel, Chief F.R.A Williams, S.A.N., was granted. f The substituted count contained 15 counts. On 17th January, 1996 the prosecution once again withdrew the charge and substituted another charge of 15 counts. This was after trial had gone some way. As the defence had g informed the Tribunal after the accused’s plea was taken that they did not intend to recall any witness, hearing continued. At the conclusion of the hearing, learned counsel for the prosecution in his written submission to the Tribunal, gave h notice of his intention to again amend the charges to take care of some typographical errors and omissions. On 28th February, 1996, during final oral address to the Tribunal, an application so to amend was made. The defence not opposing, it was granted. i Again the previous 15-count charge was substituted with another. Fresh plea having been taken, and as no party wished to recall any witness, Counsel for the parties proceeded with their final submission. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 7 a Reproduced hereunder are the 15 counts upon which the accused person finally stood trial:– “COUNT 1: That you MR MICHAEL OLADISUN ODEBODE b of 39A Park View Estate, Ikoyi, Lagos between the 27th August, 1992 and 11th May, 1993 at Lagos while being the managing director of Group Mer- chant Bank Limited were interested in various advances, loan and credit facilities totalling c N14,990,376.06 (excluding interest) granted by the bank to Red Star Express Nigeria Limited a company in which you have an interest as a director and failed to declare the nature of your interest to the bank and you thereby committed an offence d contrary to section 18(1)(a) of Banks and Other Fi- nancial Institutions Decree No. 25, 1991 and punishable under section 18(2) of the said Decree and triable by this Tribunal. e COUNT 2: That you MR MICHAEL OLADISUN ODEBODE of 39A Park View Estate, Ikoyi, Lagos between the 27th August, 1992 and 11th May, 1993 at Lagos while being the managing director of Group Mer- chant Bank Limited granted unsecured advances f and credit facilities totalling N14,990,376.06 (excluding interest) to Red Star Express Nigeria Lim- ited in contravention of the bank’s rules and regulations governing same and you thereby committed an offence contrary to section 18(1)(b) of Banks g and Other Financial Institutions Decree No. 25, 1991 and punishable under section 18(2) of the Decree and triable by this Tribunal. COUNT 3: That you MR MICHAEL OLADISUN ODEBODE h of 39A Park View Estate, Ikoyi, Lagos between the 27th August, 1992 and 11th May, 1993 at Lagos while being a director of Group Merchant Bank Limited and having personal interest in overdraft facilities amounting to N14,990,376.06 (excluding i interest) granted by the bank to Red Star Express Nigeria Limited, did not, as soon as was practicable disclose the nature of your said interest to the Board of directors of Group Merchant Bank Lim- ited and you thereby committed an offence con- j trary to section 18(3) of the Banks and Other [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 8 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Financial Institutions Decree No. 25, 1991 and pun- a ishable under section 18(9) of the same Decree and triable by this Tribunal. COUNT 4: That you MR MICHAEL OLADISUN ODEBODE b of 39A Park View Estate, Ikoyi, Lagos between the 11th August, 1992 and 8th March, 1994 at Lagos while being managing director of Group Merchant Bank Limited failed to take all reasonable steps to secure compliance by the said bank with the provi- c sions of section 19(3)(a) of the Banks and Other Financial Institutions Decree No. 25, 1991 in that at the material time you were also a director of Red Star Express Nigeria Limited, a courier company which was not a subsidiary of Group Merchant d Bank Limited and you thereby committed an offence punishable under section 46 of the Bank and Other Financial Institutions Decree No. 25, 1991 and triable by this Tribunal. e COUNT 5: That you MR MICHAEL OLADISUN ODEBODE of 39A Park View Estate, Ikoyi, Lagos between the 27th August, 1992 and 8th March, 1994 at Lagos while being the managing director of Group Mer- chant Bank Limited failed to take all reasonable f steps to secure compliance by the said bank with the provision of section 20(2)(a)(ii) of the Banks and Other Financial Institutions Decree No. 25, 1991 in that Group Merchant Bank Limited without prior approval in writing of the Central Bank of g Nigeria, permitted to be outstanding unsecured advances and credit facilities of an aggregate amount in excess of N50,000 to wit the sum of N14,990,376.06 advances granted Red Star Ex- press Nigeria Limited, a courier company of which h you were a director and thereby committed an offence punishable under section 46(a) of the Banks and Other Financial Institutions Decree No. 25, 1991 and triable by this Tribunal. i COUNT 6: That you MR MICHAEL OLADISUN ODEBODE of 39A Park View Estate, Ikoyi, Lagos between the 14th July, 1993 and 8th March, 1994 at Lagos while being the managing director of Group Mer- chant Bank Limited failed to take reasonable steps j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 9 a to secure compliance of the said bank with the provision of section 19(3) of the Banks and Other Fi- nancial Institutions Decree No. 25, 1991 in that at the material time, you were also a director of b TAURO PRODUCTS LIMITED a company which was not a subsidiary of Group Merchant Bank Limited and thereby committed an offence punishable under section 46 of the Banks and Other Fi- c nancial Institutions Decree No. 25, 1991and triable by this Tribunal. COUNT 7: That you MR MICHAEL OLADISUN ODEBODE of 39A Park View Estate, Ikoyi, Lagos between the 17th May, 1991 and 8th March, 1994 at Lagos d while being the managing director of Group Mer- chant Bank Limited failed to take reasonable steps to secure compliance by the said bank with the provision of section 19(3)(a) of the Banks and Other Financial Institutions Decree No. 25, 1991 in e that at the said time, you were also a director of HYPERION FINANCE AND INVESTMENT COMPANY LIMITED, a financial company which was not a subsidiary of Group Merchant Bank f Limited and you thereby committed an offence punishable under section 46 of the Banks and Other Financial Institutions Decree No. 25, 1991 and triable by this Tribunal. COUNT 8: That you MR MICHAEL OLADISUN ODEBODE g of 39A Park View Estate, Ikoyi, Lagos on or around the 10th December, 1992 at Lagos while being managing director of Group Merchant Bank Limited, were interested in an unsecured Bank h Guarantee (which later crystallised) in the sum of N5,000,000 issued by Group Merchant Bank Lim- ited in favour of Fidelity Union Merchant Bank Limited for the benefit of Tauro Products Limited a company in which you have an interest as a direc- i tor and you failed to declare such interest to the bank and thereby committed an offence contrary to section 18(1)(a) and (b) of Banks and Other Finan- cial Institutions Decree No. 25, 1991 and punishable under sub-section (2) of the same section and j triable by this Tribunal. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 10 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

COUNT 9: That you MR MICHAEL OLADISUN ODEBODE a of 39A Park View Estate, Ikoyi, Lagos on or around 31st March, 1993 at Lagos while being managing director of Group Merchant Bank Lim- ited, were personally interested in an unsecured b Bank Guarantee in the sum of N5,000,000 issued by the Group Merchant Bank Limited in favour of Chartered Bank Limited for the benefit of HYPE- RION FINANCE AND INVESTMENT COM- c PANY LIMITED a finance company in which you have an interest as a director and you failed to declare such interest to the bank and you thereby committed an offence contrary to section 18(1)(a) and (b) of Banks and Other Financial Institutions d Decree No. 25, 1991 and punishable under subsection (2) of the same section and triable by this Tribunal. COUNT 10: That you MR MICHAEL OLADISUN ODEBODE e of 39A Park View Estate, Ikoyi, Lagos between the 20th June, 1993 and 8th March, 1994 at Lagos while being managing director of Group Merchant Bank Limited, also held the office of director at HYPERION FINANCE AND INVESTMENT f COMPANY LIMITED a post which might have created conflicts with your position as a managing director of Group Merchant Bank Limited, and you failed to declare the fact, nature, character and ex- g tent of your said interest in the finance company to the Board of directors of the bank and thereby committed an offence contrary to section 18(6) of Banks and Other Financial Institutions Decree No. 25, 1991 and punishable under subsection (9) of h same section and triable in this Tribunal. COUNT 11: That you MR MICHAEL OLADISUN ODEBODE of 39A Park View Estate, Ikoyi, Lagos between the 13th January, 1992 and 1st June, 1992 at Lagos i while being managing director of Group Merchant Bank Limited, granted unauthorised and unsecured advances in the total sum of N36,450,000 (excluding interest) made up as follows to the following companies: j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 11 a 1. Senide Nigeria Limited ...... N7,449,180.83 2. Delgrade Agricultural Processing Industries b Limited ...... N6,653,279.22 3. Citagroup Air Services Limited ...... N8,380,327.87 4. Lydio Agric and Fishing Co. c Ltd ...... N9,311,475.41 5. Laseum Impex Limited ...... N4,655,737.17 in contravention of the rules and regulations of the bank and thereby committed an offence contrary to d section 18(1)(b) of Banks and Other Financial In- stitutions Decree No. 25, 1991 and punishable under subsection (2) of same section and triable by the Tribunal. COUNT 12: That you MR MICHAEL OLADISUN ODEBODE e of 39A Park View Estate, Ikoyi, Lagos between the 10th day of September, 1990 and 19th day of June, 1991 at Lagos while being the managing director of Group Merchant Bank Limited, approved and granted unauthorised and/or unsecured loans ad- f vances, overdrafts, bank guarantees, bonds, indemnities, commercial papers and other credit facilities in the aggregate sum of N170,890,126.75 (excluding interest) in contravention of the bank’s rules and g regulation governing same to the following companies in the proportions hereunder set out to wit: 1. Pagade Chemicals Limited ...... N59,709,416.88 2. Wolgade Chemicals and h Pharmaceuticals Limited ....N 6,000,000.00 3. Marriot Securities and Finance Services Limited ...... N 18,000,000.00 i 4. Cobik Supply and Trading Co. Limited ...... N 2,523,900.00 5. First City Fishing Co Ltd ...... N 3,507,461.53 j 6. Assurance Securities Ltd .... N42,887,866.94 [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 12 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

7. Pedamacgrek Shipping a and Trading Limited ...... N 1,425,000.00 8. United Tarpauline Industries Ltd ...... N 491,000.00 9. Textra Development b Co. Ltd ...... N 6,795,481.40 10. Amalgamated Trustees Ltd ...... N 9,550,000.00 11. ATIF Securities c Limited ...... N 20,000,000.00 and you hereby committed an offence contrary to section 12(1)(b) of Banking Act Cap 28 Laws of the Federation of Nigeria, 1990 (then applicable) and punishable under subsection (2) of same sec- d tion and triable by this Tribunal. COUNT 13: That you MR MICHAEL OLADISUN ODEBODE of 39A Park View Estate, Ikoyi, Lagos between the 20th June, 1991 and 8th March, 1994 at Lagos while being the managing director of Group e Merchant Bank Limited, approved and granted unauthorised and/or unsecured loans, advances, overdrafts, bank guarantees, bonds, indemnities, commercial papers and other credit facilities in the ag- f gregate sum of N129,761,277.07 (excluding interests) in contravention of the bank’s rules and regulations governing same to the following companies and individual in the proportions set out, to wit: 1. Assurance Securities g Limited ...... N 5,000,000.00 2. Pagade Ventures Limited ...... N 12,500,000.00 3. Elsemco Textiles Limited .... N 4,000,000.00 4. Merchandise Mart h Limited ...... N 31,294,642.66 5. Heleena Farms Limited ...... N 3,381,277.39 6. Cobik Supply and Trading Company i Limited ...... N 8,789,547.00 7. First City Fishing Co Lim- ited ...... N 913,974.49 8. Positive Financial Trust Limited ...... N 3,000,000.00 j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 13 a 9. Textra Development Co. Limited ...... N 6,477,414.50 10. Reece Limited ...... N 6,092,714.76 b 11. Amalgamated Trustees Limited ...... N 4,100,000.00 12. FBD Financial Services Limited ...... N 6,624,000.00 13. K.I. Ogunlende c (Loans) ...... N11,850,732.30 14. K.I Ogunlende (Overdrafts) ...... N24,556,974.71 15. Savice Nigeria d Limited ...... N 1,180,000.00 and you hereby committed an offence contrary to section 18(1)(b) of Banks and Other Financial In- stitutions Decree No. 25, 1991 and punishable under subsection (2) of same section and triable by e this Tribunal. COUNT 14: That you MR MICHAEL OLADISUN ODEBODE of 39A Park View Estate, Ikoyi, Lagos between the 20th June, 1991 and 8th March, 1994 at Lagos f while being the managing director of Group Mer- chant Bank Limited, failed to take all reasonable steps to secure compliance by the said bank with the provisions of section 20(2)(a)(ii) of the Banks and Other Financial Institutions Decree No. 25, g 1991 in that at the same time Group Merchant Bank Limited which you managed without prior approval in writing of the Central Bank of Nigeria, permitted to be outstanding as at 28th February, 1994 unsecured advances, loans and other credit h facilities of an aggregate amount in excess of N50,000 to wit, the total sum of N304,159,000 (including interest) granted to the following companies in which directors of Group Merchant Bank were also interested as directors; namely:– i 1. Pagade Chemicals Limited. 2. Pagade Ventures Limited. 3. Wolgade Chemicals and Pharmaceuticals Limited. j 4. Cobik Supply and Trading Company Limited. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 14 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

5. Marriot Securities and Finance Services Lim- a ited. 6. First City Fishing Co Limited. 7. Assurance Securities Limited. b 8. Merchandise Mart Limited. 9. Heleena Farms Limited. 10. Senide Nigeria Limited. 11. Elsemeco Textiles Limited. c 12. Citagroup Air Services Limited. 13. Delgrade Agricultural Processing Industries Limited. 14. Lydio Agric and Fishing Company Limited. d 15. Laseum Impex Limited. and thereby committed an offence punishable under section 46(a) of the Banks and Other Financial Institutions Decree No. 25, 1991 and triable by this Tribunal. e COUNT 15: That you MR MICHAEL OLADISUN ODEBODE of 39A Park View Estate Ikoyi, Lagos on or around the 2nd October, 1992 at Lagos while being the managing director of Group Merchant Bank Lim- f ited fraudulently caused to be paid into the account of CARLINK LIMITED the sum of N6,295,000 the said sum belonging to Group Merchant Bank Limited for benefit of HYPERION FINANCE AND INVESTMENT CO. LTD a company in g which you have an interest as a director and you thereby committed an offence of stealing punishable under section 390(7) of the Criminal Code Cap 77 Laws of the Federation of Nigeria, 1990 and triable by this Tribunal.” h Before calling the witness for the prosecution, the learned prosecutor Emeka Ngige, Esq., in a short address, gave a summary of the case which the prosecution intended to make against the accused person and the evidence by which i it would prove its case. In summary, the case for the prosecution as outlined by the prosecuting Counsel was that the accused, the managing director of Group Merchant Bank Limited, between 1st j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 15 a August, 1990 and 8th March, 1994 was and still is a director of Red Star Express Nigeria Limited, Tauro Products Lim- ited and Hyperion Finance Nigeria Limited to which the ac- b cused granted unsecured advances, overdrafts and credit facilities, contrary to the rules and regulations of the banks and statutes governing them. The accused also failed to declare his interest in these facilities. c The accused was said to have granted several unsecured loans, advances and credit facilities to several companies and individuals without following legal procedures, particularly in issuing commercial papers. As a result of the accused person’s actions, Group Merchant Bank Limited lost d several hundreds of millions of Naira. When special examination of the books of the bank was carried out by the Central Bank of Nigeria with the Nigeria e Deposit Insurance Corporation (NDIC), they unearthed startling infringements of banking laws, including in particular those relating to the amount of loans and advances granted to directors of the bank which greatly contributed to bringing the bank to a state of distress. Consequently the Central f Bank took over the management of Group Merchant Bank Limited as a bank that failed. The prosecution further stated that they would lead evidence to show that in abuse of his office as managing director and director of the bank, the ac- g cused withdrew N6,295 million which he transferred from the bank into the account of a car sales company from which the accused’s private company had bought 37 cars. The prosecution stated that they would prove that this act h amounted to stealing. By his action and unwholesome practice during his tenure as managing director of the bank, the bank became so distressed that the Central Bank of Nigeria had to set in motion processes for acquiring the bank for the i sum of N1. By way of further introduction, learned prosecuting Coun- sel drew the attention of the Tribunal to the provisions of section 3(4) of the Failed Banks . . . Decree as amended by j Decree No. 18 of 1995. He pointed out that, by virtue of that [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 16 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. section, the prosecution might tender photocopies of bank a documents and will be prepared to concede to the defence the use of similar documents. Chief Williams, S.A.N., for the defence informed the Tri- b bunal that he had no objection to the procedure. Hearing then commenced. It is my intention in this judgment to address all issues, the evidence led on both sides, the submission of the learned c counsel and other matters in relation to each of the counts in the charge, count by count. But before proceeding, let me give some summary of the evidence of witnesses who testified. d The prosecution called five witnesses after which they closed their case. PW1, Andrew Egbakhumeh, Esq., a lawyer, joined the Group Merchant Bank Limited in October, 1991 and was an e officer in its corporate banking department. He is presently the acting secretary/legal adviser from 26th May, 1995. The substantive legal adviser of the bank, Ms. Olusola Cole, from whom he took over now works with the United Bank f for Africa Plc. The witness, PW1, after outlining his duties as acting secretary and legal adviser, proceeded to give evidence and tender the following documents, exhibits P1–P33, admitted g without objection. The exhibits were:– Exhibit P1: Licence to carry on Banking Business (No. h 000056) dated 31st July, 1990. Exhibit P2: Certificate of Incorporation dated 28th Au- gust, 1990 (No. R.C. 153393 of Group Merchant Bank). Exhibit P3: Memorandum and Articles of Association. i Exhibit P4: The Companies Decree, 1968 (Particulars of Directors and of any changes therein). Exhibit P5: Form CO2 dated 29th July, 1990 of Group Merchant Bank Limited. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 17 a Exhibit P6: Contract of Employment between Group Merchant Bank Limited and Michael Oladisun Odebode. Exhibit P7: Code of Conduct for the Directors of Li- b censed Banks dated 3rd September, 1991. Exhibit P8: Group Merchant Bank Limited Policy and Procedural Manual. c Exhibit P9: Credit Policy Guide of Group Merchant Bank Limited. Exhibit P10: Minutes of board meetings of Group Mer- chant Bank Limited of 29th August, 1990 to 8th March, d 1994. Exhibit P11: Application for opening current account by Red Star Express Nigeria Limited dated 11th August, 1992. e Exhibit P12: Certificate of incorporation of Red Star Ni- geria Express Nigeria Limited, dated 10th July, 1992 (No. R.C.200303) f Exhibit P13: Companies and Allied Matters Decree, 1990 (Form CO7 Receipt No. 008518) of Red Star Ex- press Nigeria Limited. Exhibit P14: Companies and Allied Matters Decree, g 1990 (Form CO7) with Receipt No. 043250 of 15th Feb- ruary, 1993. Exhibit P15: Return of Allotment of Red Star Express Nigeria Limited dated 2nd September, 1992. h Exhibit P16(1): Guarantee No. 23/92 dated 10th Decem- ber, 1992. Exhibit P16(2): Letter of crystallisation 18th June, 1993 i from Fidelity Union Merchant Bank Limited. Exhibit P17: Letter of discharge from Fidelity Union Merchant Bank dated 12th January, 1995. Exhibit P18: Certificate of Incorporation of Tauro Prod- j ucts Limited R.C. 76,741 dated 10th September, 1985. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 18 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Exhibit P19: The Companies Act, 1968 in respect of a Tauro Products Limited signed by the Registrar of Com- panies dated 9th August, 1985 (Form CO7) Particulars of directors of Tauro Products. b Exhibit P20: Letter of Guarantee No. 07/93 to Chartered Bank Limited of 31st March, 1993 for the sum of N5,000,000. Exhibit P21: Notice of cancellation of Guarantee No. c 07/93 dated 9th July, 1993. Exhibit P22: Letter from Chartered Bank Limited acknowledging the cancellation of Guarantee No. 07/93 dated 23rd July, 1993. d Exhibit P23: Certificate of Incorporation of Hyperion Finance Investment Company Limited No. R.C. 123318 dated 22nd December, 1988. e Exhibit P24: Form CO7 Particulars of directors and of any changes therein R.C. No. 123,318/4 dated 19th May, 1991 (Hyperion Investment Company Limited). Exhibit P25: Minutes of board meeting held on 27th f September, 1994. Exhibit P26: Audited account of Group Merchant Bank Nigeria Limited for year ended 31st March, 1994 prepared by Bode Ogunleye and Company (Chartered Ac- g countants). Exhibit P27: Legal Process No. FHC/CS/1339/95 between the Central Bank of Nigeria v. Group Merchant Bank Limited. h Exhibit P28: Application for opening current account by Pagade Ventures Limited dated 22nd August, 1990. Exhibit P29(i): Certificate of Incorporation of Pagade Ventures Limited dated 22nd August, 1990 No. R.C. i 153893. Exhibit P29(ii): The Companies and Allied Matters De- cree, 1990 of Pagade Ventures Limited No. R.C. 153893. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 19 a Exhibit P30: Guarantee No. 11/92 to Fidelity Union Merchant Bank granting credit facilities to Pagade Ven- tures Limited dated 10th June, 1992. b Exhibit P31: Letter of Crystallization re: Guarantee on behalf of Pagade Ventures Limited dated 19th Novem- ber, 1992. Exhibit P32: Letter of Guarantee No. 08/91 from Group c Merchant Bank Limited dated 29th July, 1991 on behalf of Pagade Ventures Limited. Exhibit P33: Letter dated 30th April, 1992 on behalf of Pagade Ventures Limited (sum N5,500,000). d It was noted that exhibit P4 listed the directors of Merchant Bank Limited as:– 1. Air Vice Marshal Muhktar Mohammed (Rtd.) e 2. Mr Oladotun Duro Emmanuel 3. Chief Babatunde Edu 4. Mr Christopher Anyaegbunam 5. Mr Peter Arigbe f 6. Alhaji Bashir Dalhatu 7. Mr Oladisun Odebode, the accused Exhibit P5, listing the shareholders, showed that the accused g held 360,000 shares of N1 each in Group Merchant Bank Limited. Exhibit P6 shows that the accused was employed and became the managing director and chief executive of Group h Merchant Bank from 1st August, 1990. It is the contract of his employment prepared by C.O. Anyaegbunam, one of the directors of Group Merchant Bank Limited. Exhibit P7, Code of Conduct for directors of Licensed i Banks issued by the Central Bank of Nigeria was executed by the accused dated 3rd September, 1991. Exhibits P8 and 9 are the rules and regulation of the bank Group Merchant Bank Policy and Procedural Manual and j Credit Policy Guide both of which PW1 said were prepared [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 20 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. during the tenure of the accused and specifically referred the a board to pages 20, 50 and 83–87 of exhibit P9. Page 20 titled “Credit Standards” sets out in paragraph J as follows: “The Bank extends credit facilities only on the basis of legal b commitments notified in writing”. Also pages 21 etc. were found most relevant as they define Group Merchant Bank’s credit standards including legal commitments, advised lines on renewing of facilities, letters c of credit, guarantees, security, documentation etc. Exhibit P10, board minutes throughout the tenure of the accused: 28 board meetings were held between 29th August, 1990 and 8th March, 1994. d Exhibit P25, board minutes of 27th September, 1994 to April, 1995. Exhibits P11, P12, P13, P14 and P15 Re: Red Star Express Limited: From these, there was evidence as follows:– e Red Star Express Limited submitted an application to open an account on 11th August, 1992 (exhibit P11). The directors shown on exhibit P13, Form CO7 dated 13th June, 1992 submitted at the opening of the account on 11th August, f 1992 did not include the accused, but exhibit P14 Form CO7 dated 15th February, 1993 showed that the accused was a director of Red Star Express Limited by resolution of the board of 11th August, 1992. PW1 said exhibit P14 was ob- g tained after a search at the Corporate Affairs Commission (C.A.C.), Abuja. At the opening of the account, the Board had appointed him director. h Exhibit P15, Return of Allotments in Form CO2 for 2nd September, 1992 to 22nd September, 1994 in respect of Red Star shows that the accused is a shareholder holding 1,050,000 ordinary shares of N1 each. i PW1 said he worked in the Credit Banking Department when Red Star enjoyed credit facilities from Group Mer- chant Bank but this was not processed through the department. He affirmed that there was nowhere in exhibit P10 j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 21 a where Red Star Express Limited was discussed in the board minutes, nor were the facilities or benefits mentioned. Exhibits P16(i), P16(ii), P17, P18, P19 re Tauro Products b Limited. The witness knows this company from the records of the bank. It is not a customer of the bank. A guarantee which latter crystallised was granted to this company as shown in exhibits P16(i) and P16(ii), letters of guarantee and c of crystallisation respectively. The company, however, later redeemed its obligations to us, creditor and Group Merchant Bank Limited was discharged (by exhibit P17). No security was taken for this guarantee which is against the usual prac- d tice set out in exhibits 8 and 9, the Procedural and Credit Policy Manual of Group Merchant Bank Limited. Tauro Products Limited, incorporated on 10th September, 1985 (certificate is exhibit P18), its Form CO7 dated 6th e August, 1985 (exhibit P19) shows that the accused is a director of the company. The witness testified that nowhere in the board minutes, exhibit P10, was the interest of the accused shown to have been declared to the board or that he f had an interest in the guarantee to be issued. Exhibits P20, P21, P22, P23 and P24 re Hyperion Finance and Investment Company Limited, known by the witness through the bank’s records, was not a customer of the bank. g Group Merchant Bank Limited issued a guarantee to Char- tered Bank Limited on behalf of [Hyperion Finance and In- vestment Company Limited] on 31st March, 1993 (exhibit P20). After four months, by notice of cancellation dated 9th July, 1993, the guarantee was cancelled. Then the bank was h discharged of its obligations by this cancellation in exhibit P21, and Chartered Bank also wrote to Group Merchant Bank (exhibit P22) acknowledging the cancellation and releasing Group Merchant Bank Limited. i There was no collateral or security from the Company Hy- perion which was not a customer, to Group Merchant Bank Limited. Hyperion Finance and Investment Limited was incorporated on 22nd December, 1988 (Certificate of Incorpo- j ration – exhibit P23) has its only directors set out in Form [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 22 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

CO7 dated 17th May, 1991 (exhibit P24) as the accused and a Mrs Odebode were appointed by resolution of 16th May, 1991 while its two previous directors were removed on the same date. b Nowhere in the board minutes did the accused declare his interest in this company or any other. Exhibits P25; P26 contain minutes of the board between 27th September, 1994 and April, 1995. c The board was later dissolved but before then it considered the audited account of the bank in exhibit P26. The board was reconstituted by the Central Bank, so was the management. d The Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) are managing the bank. By a suit before the Federal High Court in Suit No. FHC/L/CS/1339/95 between CBN and Group Merchant e Bank Limited filed on 16th January, 1995 (summons, affidavit with exhibits attached etc. form exhibit P27 hereof), the CBN applied to purchase Group Merchant Bank Limited at a nominal cost of N1 due to Group Merchant Bank Lim- f ited’s distress state. PW1 also gave evidence relating to Pagade Ventures Lim- ited, tendering exhibits P28, P29(i), P29(ii), P30, P32 and P33. g Pagade Ventures Limited, a customer of Group Merchant Bank Limited, applied to open a current account (by exhibit P28 of 7th May, 1991) and had submitted its Certificate of Incorporation (exhibit P29(i) and Form CO7 (exhibit h P29(ii)). Its directors, listed in exhibit P29(ii), were Oladotun Duro Emmanuel, Peter Arigbe, Chief Babatunde Edu who were also directors of Group Merchant Bank Lim- ited. i (1) N7 million bank guarantee was issued in the favour of Fidelity Union Merchant Bank Limited by Group Merchant Bank Limited (exhibit P30) dated 10th June, 1992 on behalf of Pagade Ventures Limited. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 23 a This guarantee, signed by the accused, crystallised by a letter dated 19th November, 1992 (exhibit P31). (2) N5.5 million guarantee was also given to this com- b pany by Group Merchant Bank Limited in exhibit P32 dated 29th July, 1991 signed by accused. This guarantee also crystallised by letter of crystallisation addressed to the accused, the managing director of Group c Merchant Bank Limited (exhibit P33) dated 30th April, 1992. There were no collaterals when the two facilities were granted. Group Merchant Bank Limited had to pay the re- d spective parties when called upon to redeem its obligations under the two guarantees. The witness testified that up till now Pagade Ventures Limited had not paid back these two sums, which remain outstanding. e In cross-examination by Chief Williams, PW1 affirmed that it is correct that if some changes were effected or directors removed, such notice would be embodied in the notice to the Corporate Affairs Commission. He obtained exhibit f P19 on 17th December, 1995 and the accused became director of Tauro Products Limited with effect from 6th August, 1985 as shown therein. He agreed that from 6th August, 1985 to 7th December, 1995 the position of the accused as a g director of Tauro Products Limited did not change. As to whether the register of directors of Group Merchant Bank contained particulars of the other directorships witness said he could not recollect offhand unless he saw the register. h In re-examination by Emeka Ngige, Esq., for the prosecution, the witness referred to exhibit P4, Particulars of directors of Group Merchant Bank Limited, and pointed out that against the names of the directors, in the column for particu- i lars of any directorships, no particulars were given in respect of any of the directors listed. This includes the accused. PW2, Faruk Shehu, is a senior manager in the Field Ex- j amination Department of the N.D.I.C. whose duties are [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 24 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. generally to examine banks, appraise the performance of a banks and conduct special investigation in banks, when requested. This witness conducted an investigation into Group Mer- b chant Bank Limited in 1995. Before that there was a routine examination led by the Central Bank of Nigeria and carried out jointly with the witness’s Department in N.D.I.C. in April, 1994. After this recent examination, a report was pro- c duced. The witness identified exhibit P27 as the report. He explained that what prompted the investigation was a request from Group Merchant Bank Limited to assist it to recover certain debts owed and director-related loans given d by the last management of the bank. This request was by a letter, admitted in evidence as exhibit P34 (in a pack with attachments A, B, C and D). The witness led the team of five inspectors constituted on e the instruction of the managing director of N.D.I.C. The report of this team which worked from 7th to 15th March, 1995, was admitted in evidence as exhibit P35. It was titled, “Group Merchant Bank Limited Special Investi- f gation Report”. He signed the report. The witness was not cross-examined by the defence. PW3, Nse Bong Douglas Okpongette, Superintendent of g Police of the F.I.I.B., is engaged by the Special Investigation Panel and Anti-Fraud section. This witness testified that following a request, in exhibit P36, from N.D.I.C., his team investigated a report of fraudu- h lent malpractices against the former managing director of Group Merchant Bank Limited, that is the accused herein, and other directors of the bank in connection with a sum of N383,929,691.57, in exhibit P34. He tendered the search i warrant, exhibit P37, with which the accused’s house was searched, with the inventory of what was recovered from the house of the accused endorsed on the back and counter- signed by the accused. He tendered the statement made by the accused under caution, exhibit P38, additional statements j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 25 a made on 20th July, 1995 and 21st July, 1995 by the accused (exhibits P39(1) and P39(2)). His findings were: that at the beginning of the investiga- b tion, Red Star Express Limited’s indebtedness from a credit facility from Group Merchant Bank Limited stood at N28 million, that the accused is a director of Red Star Ex- press, information obtained from Red Star Express and Cor- c porate Affairs Commission (C.A.C.), Abuja. There was no evidence of or document found during the investigation that the facility to Red Star Express was secured. This witness said some goods were recovered including seven cars returned on bond to the accused. d Tauro Products Limited was also investigated and he found, in exhibit P19, Form CO7 of Tauro Products, that accused was shown to be a director of that company. A guarantee, by letter of guarantee, in exhibit P16(1) was found on e behalf of Tauro signed by the accused. Marriot Securities Limited was also looked into. The directors include Kola Bajomo (not a director of Group Merchant Bank Limited), Mr Dotun Duro Emmanuel and Mr Peter f Arigbe. The witness testified that he also conducted a search into companies mentioned by the accused in his statement (exhibits P38, P39(1), P39(2)): Senide Nigeria Limited, Cita g Group Air Service, Lydio Agricultural and Fishing Com- pany Limited. Particulars of directors of these companies, tendered as exhibits P40, P40(1) and P40(2) respectively, showed that Duro Emmanuel and Peter Arigbe were direc- h tors of Senide; AVM Muhktar Mohammed (Rtd.), Dotun Duro Emmanuel and Peter Arigbe for Cita Group; Dotun Duro Emmanuel, Alhaji Adesola Arologun and Peter Arigbe for Lydio. Delgrade Nigeria Ltd and Laseum Impex Ltd were also investigated. The particulars of directors of the i former were found but not that of Laseum Impex whose file at the Corporate Affairs Commission at Abuja could not be found. A letter, exhibit P41, received during the investigation j from Red Star Express to Deputy Inspector General of [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 26 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Police (DIG) informed him that the accused had informed a them that the directors of Group Merchant Bank Limited had authorised him to be on the board of Red Star Express. The witness stated that the accused did not show him any such b written authorisation and exhibit P42 contained the reaction of Group Merchant Bank Limited to this. Hyperion Finance and Investment Company Limited was investigated. Form CO7, Particulars of directors, exhibit c P24, showed that the accused was a director of this Com- pany. It was also found that commercial papers and overdrafts were granted to directors and the chairman of Group Mer- d chant Bank Limited. PW4 is Mr Tijani Mohammed Abdullahi, banker by profession, the executive chairman of Group Merchant Bank Limited from 18th September, 1995, formerly executive e director of the bank from 8th March, 1994 to 18th Septem- ber, 1995. Prior to this he was senior manager in Group Merchant Bank Limited where he worked since 3rd October, 1990. f This witness testified that the accused was the first managing director of Group Merchant Bank Limited. The witness testified that, by reason of his position, he, the witness, was familiar with all the documents connected with the g bank. He tendered and/or gave evidence about various documents relating to Group Merchant Bank Limited and the companies and firms named in this charge. By agreement between Counsel for the parties, documents were ad- h mitted in batches to save time, because they ran into several pages. The facts of this matter as put before this Tribunal, woven together by the evidence of PW4 were as follows:– i Red Star Express Nigeria Limited, exhibit P43, a batch of 83 pages consists of written requests and debit advices relating to facilities granted to this company by the accused from 28th August, 1992 to 8th May, 1993. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 27 a Exhibit P44, a batch of 41 pages, is made up of bank statements issued to Red Star Express, re its account with Group Merchant Bank Limited, for the period 31st August, b 1992 to 31st October, 1995. This is the company in respect of which accused is charged in counts 1–5. Exhibit P105 is a computer print-out of drawings made by Red Star Express from 28th August, 1992 to 11th May, c 1993, two pages. Exhibit P45 – application to open an account. Exhibit P45(1) – Certificate of Incorporation. d Exhibit P45(2) – Form CO7 account of the company dated 13th June, 1990. Exhibit P46 – a batch of 79 pages – letters of request and e debit advices of this company. Exhibit P47 – a batch of 63 pages made up of statements of account of Pagade Ventures Limited. f Marriot Securities and Finance Services Ltd: This witness testified that this company was not a customer of the bank. Exhibit P48 – a batch of 12 pages – applications for g commercial papers and correspondences. Wolgade Chemicals and Pharmaceuticals Limited Exhibit P49 – Application to open an account. h Exhibit P49(1) – Specimen signatures. Exhibit P49(2) – Certificate of Incorporation. Exhibit P50 – a batch of 35 pages consisting of letters of i request and debit advices. Exhibit P51 – a batch of 59 pages – consisting of statements of account from 29th September, 1990 to 31st Oc- j tober, 1995. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 28 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Cobik Supply and Trading Company Limited:– a Exhibit P52 – Application of 6th November, 1990 to open an account. Exhibit P52(1) – Specimen signature card. b Exhibit P52(11) – Form CO7 of 27th July, 1988. Exhibit P53 – a batch of 53 pages of letter of request and debit advices. c Exhibit P54 – a batch of 60 pages – statements of account of this company. The witness testified that Christopher Anyaegbunam, Esq., a director of Group Merchant Bank Limited is a director of this company. d First City Fishing Company Limited:– Exhibits P55(1), P55(11) respective application to open an account of 11th September, 1990. Specimen signature card, Certificate of Incorporation of 26th June, 1987 e Form CO7. Exhibit P56 – a batch of 70 pages consisting of letters of request and credit advice. f Exhibit P57 – a batch of 61 pages consisting of statements of account from 18th September, 1990 to 31st October, 1995. Chief Babatunde Edu, a director of Group Merchant g Bank Limited of this company – First City Fishing Company Limited. Assurance Security Limited:– Exhibits P58, P58(1), P58(11), respectively: Application h to open an account and specimen signature card, Certifi- cate of Incorporation of 26th January, 1988. Form CO7 of 12th October, 1990. Exhibit P59 – batch of 86 pages consisting of letters of i request and credit advances from 13th September, 1990 to 4th November, 1991. Exhibit P60 – a batch of 61 pages of statements of account of 11th September, 1990 to 31st October, 1995. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 29 a United Tarpauline Industries Limited:– Exhibits P61 and P61(1): application to open an account in Group Merchant Bank Limited and specimen signa- b ture card respectively. Exhibit P62 – 12 pages, consisting of letters of request and debit advice of 7th May, 1991. Exhibit P63 – a batch of 56 pages consisting of state- c ments of account of this company for 30th April, 1991 to 31st October, 1995. Amalgamated Trustees Limited:– Exhibits P64, P64(1), P64(11), respectively are applica- d tion to open an account of 29th January, 1991, signature card, Certificate of Incorporation. Exhibit P65 – a batch of 10 pages consisting of letters of request and debit advice. e Exhibit P54 – statements of account of amalgamated trustees. Pagade Ventures Limited:– f The witness referred to exhibits P28, P29(1) and P29(11): application to open an account, Certificate of Incorporation and Form CO7 and statement of this company which he identified. g Exhibit P67 – It is statements of account in a batch of 58 pages. Exhibit P30 – Letter of guarantee from Group Merchant Bank Limited on behalf of Pagade Ventures identified. h Exhibit P31 – Letter of crystallisation from Fidelity Merchant Bank to Group Merchant Bank Limited in respect of the guarantee (exhibit P30) No. 11/92 and another guarantee No. 08/91 (exhibit P33) issued by Group i Merchant Bank Limited to C.M.B. Limited on behalf of Pagade Ventures securing its borrowing identified with exhibit P33 is a letter of request for extension of security in P33 and statements of account, exhibit P66, flows j from exhibits P30 to P33. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 30 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Elsemco Textiles Limited:– a Exhibits P68 and P68(1) – application to open account and signature card. Exhibit P69 – five pages consisting of letters of request b and debit advice. Exhibit P70 – statements of account – a batch of 50 pages. c The witness testified that Mr Dotun Duro Emmanuel, director of Group Merchant Bank Limited, was a director of Elsemco Textiles in view of its Form CO7. Exhibit P71 – a batch of 56 pages: Debit advices and let- d ter of request of 25th February, 1991 to 19th April, 1993. Merchandise Mart Limited:– e Exhibit P72 – a batch of 56 pages: Debit advices and a letter of request relating to the account of this company. Exhibit P73: Its statements of account in 58 pages. Evidence was led that A.V.M. Mukhtar Mohammed f (Rtd.), former chairman and director of Group Merchant Bank Limited, was a director of this company. Heleena Farms Limited:– Exhibits P74, P74(1), P74(11), P74(111), respectively: g application to open an account of 16th April, 1993 with specimen signature card, Certificate of Incorporation, Form CO7 of 9th July, 1993. h Exhibit P75: Letter of request and credit advices – six pages. Exhibit P76 – batch of 78 pages: statement of account of Heleena Farms. The chairman, AVM M. Mohammed, is i a director of this company. Positive Financial Trust Limited:– Exhibits P77 and P78, respectively: letters of request and statement of account (a pack of five pages). j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 31 a Textra Development Company Limited:– Exhibits P79, P79(1), respectively: application to open an account and specimen signature card. b Exhibit P80: a pack of 36 pages – letters of request etc. Exhibit P81: statement of account in 60 pages. A gentleman, K.I. Ogunlende, a director of Textra also had a c loan account whose particulars are in the following:– Exhibit P82: specimen signature card of account No. 202 1145. Exhibit P83: letters of request etc. in a batch of 46 pages. d Exhibit P84: Statement of account of K.I. Ogunlende. Exhibit P85: letter of request and credit advices – a pack of 85 pages. Pedamacgrek Shipping and Trading Limited:– e Exhibits P86, P86(1): application to open an account and signature card. Exhibit P87: letters of request and debit advices. f Exhibit P88: statement of Account of 19th December, 1990 to 30th October, 1995. Artif Securities Limited (Association Trusts Investment and Finance Securities Limited):– g Exhibit P89: commercial papers Nos. 000153–157 all of 4th March, 1991 in a pack of five. Exhibit P90: letters of request – a batch of five pages. Exhibit P91: statements of account of 11th March, 1991 h to 30th September, 1995. Savice Nigeria Limited:– Exhibits P92, P92(1) and P93, respectively: application i to open an account and signature card, statement of account of Savice Nigeria Limited. F.B.D. Financial Services Limited:– Exhibits P95, P95(1), P96, P97 are respectively applica- j tion to open an account and signature card, letters of [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 32 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

request in a pack of 15 pages, statements of account of a F.D.B. . . . from 29th January, 1993 to 31st October, 1995, a batch of 30 pages. Exhibit P98: a batch of documents in pages made up of b internal office memorandum of 3rd June, 1992 in which the accused approved N36.45 million for five companies: Senide Nigeria Limited, Delgrade Agricultural Processing Industries Limited, Lydio Agric and Fishing c Company Limited, Citagroup Air Services Limited and Laseum Impex Limited (listed in count 14) and Form CO7 of Delgrade Agricultural Processing Industries Limited of 29th December, 1987. d The accused gave approval to debit the suspense account of Group Merchant Bank Limited for the N36.45 million lent to the five companies which were not customers of Group Merchant Bank Limited and none of them applied e for the facility. No collateral or security of any kind (exhibit P106 replaces P27 which has some pages missing). Hyperion Finance and Investment Company Limited Re: Car Link Limited transaction:– f Exhibits P99, P99(1), P99(11), respectively: internal memo from the accused, Oladisun Odebode, to Kerry Oyakhire of 2nd October, 1992 authorising a credit of N6.295m to Car Link, pro forma invoice No. 1354 to g Hyperion Finance and Investment Company Limited, credit advice of Car Link Limited showing that N6.295m had been credited on 5th October, 1992. Exhibit P100: statement of account of Car link Limited – h three pages. Exhibit P101: comprising letter of Group Merchant Bank Limited to the accused on 21st October, 1994 charging him for certain irregularities relating to various i accounts in respect of various companies and seeking explanation with special Internal Audit Report of Group Merchant Bank Limited (five pages). Exhibit P102: is the reply of the accused to exhibit P101; j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 33 a Exhibit P103 is a batch containing sundry memoranda written by the accused to Kerry Oyakhire and other staff of Group Merchant Bank Limited relating to the ac- b cused’s use of what was called Sundry Debits Operation Account which he was accused of operating to siphon money and authorise unapproved facilities etc. and evidence of payments. c The batch is made up of 43 pages. For example, on page 6 of exhibit P103 is an instruction of the accused to issue a cheque of N11m from Sundry Debit Account in favour of Kola Ogunlende (named in count 13, page 4 – N4.5m d to F.D.B. Financial Services (named in count 13). ARCO Petrochemical Engineering Company Limited:– Exhibit P104: a batch of 58 pages in respect of application to issue commercial papers. e Red Star:– Exhibit P104 goes with P43, P44: it is a computer print- out of drawings by this company within a period of nine months from 28th August, 1992 to 11th May, 1993. f Evidence Re: Group Merchant Bank Procedural Manual (exhibit P8), Credit Policy Guide also called Credit Policy Manual (exhibit P9), contract of employment of the accused g (exhibit P6) and leading policy of the bank Managing director – N4m Limit All Purposes Committee N7m Limit of the board of directors of the bank – h Full board – Above N7m The witness gave evidence of approval procedure for granting loans, overdrafts and other facilities pursuant to the bank’s lending policy. i The system is the appraisal of the request of the customer, including the taking of collateral, credit check of the customer, report to approving authority, letter of offer to the customer setting out the terms, formal acceptance of offer j and finally drawing. Appraisal is done by the Credit and [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 34 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Marketing Department of the bank, now called the Corpo- a rate Banking Department. Withdrawal of money by customer, known as “draw down” in banking parlance, is allowed only after all the terms and conditions are met, par- b ticularly the security. PW4 states that no document in the bank shows that the above procedure was followed in respect of Red Star Ex- press, the company in which the accused is a director. He c approved all the payments to the company for setting up that company, incorporation expenses, sent donations to arts ex- hibitions, Nitel Bills, general expenses, cash withdrawals etc. The debit balance of Red Star in Group Merchant Bank d Limited as per exhibit P44, its statement of account as at 28th February, 1994, was N32,259,564.04k (Debit). The witness found nothing at all from the document in his custody to show that the accused disclosed his interest in e Red Star Express, or that he was granted permission by the board to become a director of Red Star which is not a subsidiary of Group Merchant Bank Limited. There was no C.B.N. approval for a sum over N32m to be outstanding f from Red Star or from any other regulatory body. More details about Hyperion Finance and Investment Limited in which accused is listed as a director and which company is not a customer of the bank but on 31st March, 1993 got the bank’s guarantee for N5m for facilities from Chartered Bank g Limited. No correspondence between Group Merchant Bank Limited and Hyperion Finance and Investment Limited. No security was obtained, no documents found in the bank that Group Merchant Bank Limited or the board of directors h were informed of the accused’s interest or approved of his becoming a director of Hyperion. It was found, however, that the guarantee was later cancelled with effect from 9th July, 1993. i The business of Hyperion Finance and Investment Limited is in competition with that of merchant bankers such as Group Merchant Bank Limited. It is a financial institution. The witness knew this as a banker. Finance companies j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 35 a solicit for investments, do trade finances, and act as stock brokers, lease equipments. There was no record to show that the accused informed Group Merchant Bank Limited’s b board of his finance company, Hyperion Finance and In- vestment Limited. PW4 gave detailed evidence about the transactions with Hyperion Finance and Investment Company Limited, putting c together the loose ends. (i) The guarantee granted on 31st March, 1993 was cancelled on 9th July, 1993. The witness identified the signature of the accused on the letter of guarantee is- d sued to this company by Group Merchant Bank Lim- ited whose customer the company was not. The accused and his wife are the only directors and the only shareholders of Hyperion Finance and Investment e Limited, accused having 4 million of the 5 million shares and his wife, 1 million shares. Exhibit P24 tendered by PW1, the particulars of directors, and exhibit P117, Return of Allotment in Form CO2 of this company, show this. The Memorandum and Articles f of the company, exhibit P118 tendered by PW4, showed that this company has similar objects as Group Merchant Bank Limited and is its competitor. g (ii) The sum of N6.295 million. There was evidence that by an internal memo of 2nd October, 1992 (exhibit P99) made and signed by the accused and addressed to Kerry Oyakhire, Deputy General Manager of Group Merchant Bank Limited authorising the pay- h ment of N6.295 million to Car Link Limited on behalf of Hyperion Finance and Investment Company Lim- ited. Hyperion Investment is not a customer of Group Mer- i chant Bank Limited. The account of Car Link was credited with the sum as exhibit P100, the statement of account of Car Link shows at page 1. This sum, the accused instructed was to be credited to “Sundry j Debit Account”. The witness gave evidence that the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 36 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Sundry Debit Account was an account used as an in- a ternal account of Group Merchant Bank Limited. It was of temporary nature, being a suspense account and did not belong to any customer. b In exhibit P99, accused stated that a facility would be processed for Hyperion Finance and Investment Company Limited on his, accused’s “return”. No facility was ever processed thereafter nor was any being processed at the ma- c terial time. When confronted by Group Merchant Bank Limited’s letter of 21st October, 1994, exhibit P101, with taking this sum, the accused stated that it was “an I.O.U. I took” which d he stated had been settled. See exhibit P102 at page 5, a letter of the accused dated 27th October, 1994 in response to Group Merchant Bank’s letter, exhibit P101. In his evidence PW4, the executive chairman of Group e Merchant Bank Limited, stated that he believed that this amount was later refunded. He added, the accused said he had repaid it. I do not have any document to show about the repayment. When cross-examined by Chief F.R.A. Wil- f liams, S.A.N., for the accused, PW4 answered the question put to him in respect of this payment: “As to whether the C.B.N. Report exhibit P106 shows that the amount owed by Hyperion was outstanding as at 30th April, 1994, I say it does not show that. I told the Tribunal that the accused said g the Hyperion money had been paid back”. I don’t know that it was paid back with interest. “As to whether I am aware of all director related debts owed to Group Merchant Bank Limited, I am aware, leaving out Hyperion Finance and In- h vestment Company Limited”. The witness said he was also aware that all the companies with which the accused was associated have now paid all the sums which they owed to the Group Merchant Bank Lim- i ited. What emerged from the foregoing was that it was only the accused who knew what he did with regard to this sum of N6.295 million appropriated on the approval of the accused j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 37 a for his solely owned company, Hyperion Finance and In- vestment Company Limited. He admitted taking but he said he paid back, when and how no one knows as there are no b records. Tauro Products Limited: After identifying exhibits P16(1), P18 and P19, the guarantee No. 33/92 issued by Group Mer- chant Bank Limited to Fidelity Union Merchant Bank for c N5m for facilities granted to Tauro Products Limited, Tauro’s Form CO7, also identified, the witness testified that Tauro Products Limited was no subsidiary of Group Mer- chant Bank Limited. The board of Group Merchant Bank d Limited did not permit him to be a director. No record of any permit of the board to issue a guarantee, no security was obtained, the company was not a customer. Appraisal was also required by rules for granting guarantee, but none was e done. The bank, Group Merchant Bank Limited, does not grant guarantees to non-customers. For customers they have to provide 100% cash collateral f or any other security that can quickly be turned to cash. The guarantee to Tauro crystallised and Fidelity Union sent a letter of demand to Group Merchant Bank Limited. g Fortunately Tauro Products Limited eventually paid but Group Merchant Bank Limited would have if this non- customer had defaulted. Fidelity Union discharged Group Merchant Bank Limited eventually of this liability created h on 10th December, 1992 by letter of 12th January, 1995. The witness confirmed evidence already given about the following companies:– 1. Senide Nigeria Limited was not a customer of the bank, i Mr Peter Arigbe and Mr Duro Emmanuel were directors. 2. Citagroup Air Services Limited: not a customer. 3. Lydio Agricultural Processing Industries Limited: not a j customer. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 38 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

4. Delgrade Agricultural Processing Limited: not a cus- a tomer. The directors were Oladotun Duro Emmanuel and John Oduwole Duro Emmanuel. 5. Laseum Impex Limited: The particulars could not be b traced at the Corporate Affairs Commission because the file was missing but a computer print-out of the directors from C.A.C. shows that Peter Arigbe and Oladotun Duro Emmanuel were the directors. Both were also directors c of Group Merchant Bank Limited. Witness PW4 said he knew the accused did nothing to recover the N36.45 million approved and paid to these five companies by the accused since 13th January, 1992 till this d date. The sum was warehoused in the Sundry debit account which was meant to be used for temporary debit items, not a loan or overdraft account and items therein bear no interest. The accused’s signature on exhibit P98 was identified and e the sum of N32.45 million exceeded the lending limit of the accused. There was no approval from the board of Group Merchant Bank Limited and no explanation in the bank records as to the purpose of the sums given the five compa- f nies, no obligation was recorded and PW4, the executive chairman, said he could not explain what it was all about but that it was the accused and the directors of Group Merchant Bank Limited who could explain what it was all about. g The witness explained about “Commercial Papers”, the use of which had come up a great deal in transactions and facilities concerning which the accused has been charged. He defined their use as a form of promissory note. He gave an example of the procedure and tenor of commercial paper law- h fully and successfully issued by Group Merchant Bank Lim- ited pursuant to the regulations of Group Merchant Bank Limited tendering documents in the case of a company, Arco Petrochemical and Engineering Company Limited in i exhibit P104. The board approved. There was security. The effect was to show that what the accused called commercial papers were not. None of them was, as none followed the process. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 39 a On the issue of bankers acceptances, much bandied around in connection with some of the transactions concerning which the accused was charged. PW4 explained its import to b the Tribunal. Referring to exhibit P8, the Group Merchant Bank Proce- dural Manual the definition on page 18 thereof, to show that the name was misapplied to transactions that did not, like the c commercial papers, fit into the legal tenor. 1. Pagade Chemicals Limited: The grant to Pagade Chemi- cals was not by genuine commercial paper. None of the procedures followed, no documentation, no approval d from the board for N6m granted by the accused on 30th November, 1990 or N50m, on page 69 of exhibit P46 granted since 19th April, 1991. Shortly after the accused left the bank, this company had N61,080,933.64 debit and e as at 31st October,1994, it was N113,541.29 debit and no payment since then. The directors of that company were Peter Arigbe and Oladotun Duro Emmanuel. 2. Marriot Securities Finance Services Limited: This f company had no account with Group Merchant Bank but applied for a commercial paper facility of N18m (exhibit P48) none of the procedures in Group Merchant Bank rules and regulations were followed, no appraisal, no documentation, no security, no board approval, cheque g of N14m paid at the request of this company to the Cen- tral Bank of Nigeria by cheque of 26th March, 1991. The accused also approved of a roll-over of this facility (at page 10 of exhibit P48). It was stated that the approval h was pending completion of account opening by Marriot Securities yet the documentation was never done till the accused left the bank in March, 1994. It was after he left Group Merchant Bank that the manage- i ment decided after informing the company to open an account for the company to show its liability. The witness affirmed that this transaction was not a commercial paper transaction. No document could be obtained j from C.A.C to know if this company, Marriot Securities [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 40 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Finance Services Limited, was an existing corporate body a but the directors who assumed liability, Arigbe, Bajomo, Duro Emmanuel and Chief Edu, spilt the debt by exhibit P110 of 9th August, 1995, Bajomo to pay 55%, the other b three to pay 45%. Because of Marriot Securities Finance Limited’s account was split into two (exhibit P108 for Ba- jomo and P109 for the others). On exhibit P108 as at 31st October, 1995, N32,274,793.25 remained unpaid. c On exhibit P109, for the other three, the account had N30,52,539.61 unpaid. The total liability of Marriot Securi- ties Limited was N62,827,332.84 as at 31st October, 1995. Before then Bajomo had paid N2.5m on 22nd September, d 1995. The other three who were directors of Group Mer- chant Bank did not repay. Wolgade Pharmaceuticals Limited: Exhibits P49, P49(1). P49(11), P50 and P51 had been tendered in connection with e this company, a customer of the bank. It applied for N6 million commercial paper by exhibit P50 signed by Oladotun Duro Emmanuel, its executive director and also a director of Group Merchant Bank Limited and chairman of Group Mer- f chant Bank Limited’s Board All Purposes Committee. Laid down procedure was not followed by the accused in granting it, no correspondence between Lobi Bank, Pacific Merchant Bank Limited and Nation Wide Merchant Bank g Limited said to be the investors or buyers of the commercial paper in the ratio of 3:2:1, of the N6 million. No appraisal, no information about Wolgade Chemicals, no payment from any of the banks, or sign of any investment, yet the company was allowed to draw the N6 million. As at 31st October, h 1995 its account was N10,889,682.20 debit. For some payments were made on 24th August, 1995 N5m, on 31st August, 1995 N20m (out of the outstanding of N25,998,811.16k as at 28th February, 1994). i The particulars of the directors of the company and other attachments in a batch of four pages are exhibit P111 confirming that Dotun Duro Emmanuel and John Oluwole Duro Emmanuel were the directors. Page 2 of the batch showed j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 41 a that the company was formerly Wolgade Pharmaceuticals Limited and changed to Wolgade Chemicals Pharmaceuti- cals Limited. b Cobik Supply and Trading Company Limited: exhibits P52, P52(1), P52(11) and P53 had been tendered relating to its business with Group Merchant Bank Limited from 8th No- vember, 1990 to 27th September, 1993 which made a total c of withdrawals of N11,312.917.10, which is in excess of the accused’s limit of N4m. The accused followed laid down procedures for the first N2m he approved but not in subsequent withdrawals. The corporate guarantee of C.I. Anyaeg- bunam and Co, which was the collateral, was not called by d Group Merchant Bank Limited. The debit balance as at 28th February, 1994 was N14,939,673.26 and on 31st October, 1995 N11,203,408.75 but this has been paid as at date. First City Fishing Company Limited e : Exhibits P55, P55(i), P55(ii), P55(iii) and P56 were earlier tendered. By exhibit P55(iii) the directors of this company were Chief Babatunde Edu who was a director of Group Merchant Bank Limited and four others, Alhaji Rasak, Atanda Seriki, S.A. Edu and f Ben N. Okagbue. Exhibit P56 is a batch of documents showing that the accused approved a request for N750,000 at a time the account of this company had only N183,299.23, after which the ac- g count went into debit. No security was taken at the time. The accused also approved the payment of N553,926.61 owed by this company to Alpha Merchant Bank (exhibit P56). h A memo from the accused (page 69 of exhibit P56) authorised the payment of N787,506 into the account of First City Fishing Company Limited and debit Sundry Debit Opera- tions Account and to transfer from First City Fishing Com- i pany Limited’s account N500,000 to U.C.B. Victoria Island Branch. The certificate of occupancy of Chief Edu’s property was deposited with Group Merchant Bank Limited as security. The bank could not realise the security which was j in the personal name of Chief Edu. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 42 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

As at 28th February, 1994, before the accused left the a bank, the account had N374,496.44 debit> Chief Edu repaid N5m on 4th August, 1995. As at 31st October, 1995, it came down to N7,487.564.71 (debit). b Assurance Securities Limited: Exhibits P58, P58(ii), P58(iii), P59 and P60 relate to this company whose directors are Oladotun Duro Emanuel, Peter Arigbe, A.V.M. Mukhtar Mohammed, Babatunde Edu, all directors of Group Mer- c chant Bank Limited and Oduwole Duro Emmanuel who is not a director of Group Merchant Bank Limited. For this company the following transactions were approved by the accused:– d (i) N1 million for which N1.3m banker’s acceptance was deposited as collateral but was later withdrawn on the approval of the accused leaving the facility unsecured (exhibit P59). e (ii) 24th January, 1991 – N3 million (iii) 31st December, 1991 – N5 million (page 64 of exhibit P59). f (iv) 24th October, 1990 – N25 million commercial paper. In none of these grants did the accused comply with the rules and regulations: (i) remained unsecured after the withdrawal of the collateral; (ii) was within his lending limit but g unsecured, no appraisal etc.; (iii) was above his lending limit, no security, no appraisal. Before the grant of N3 million and N5 million in (ii) and (iii) above were granted, the account was in debit and no se- h curity was taken. In respect of (iv), the commercial paper, the transaction was completely out of tune with the rules and regulations of the bank for commercial paper. No rules were followed at all i such as that followed when the bank granted commercial papers to Arco Petrochemical Nigeria Limited, the particulars of which were tendered as exhibit P104. This was with the board’s approval. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 43 a The four facilities involved the total sum of N47,887,866.94 as shown in exhibit P60, the statements of account from 11th September, 1990 to 31st October, 1990. b As at 31st October, 1995 after the payment of N12.5 million, the account had N32,740,887 debit which remains unpaid. United Tarpauline Industries Limited: Exhibits P61, P62 relate to this. c The following transactions were involved:– 7th May, 1991: request for N491,000 approved by the accused, no formal application for the facility, the account then was in debit of N3,749,358. d Title document belonging to one of the directors was left with the bank but the security was not perfected. Repayments of N5.5 million on 15th September, 1995 e and N2 million on 20th September, 1995 left the account with N11,470,871.5k debit as at 31st October, 1995. No further payments made. Amalgamated Trustees Limited: Exhibits P64–P66 relate to f this. Its transactions were as follows. Its account was in fact opened on 2nd November, 1991, although before then, an application to open an account was made on 29th January, g 1991. It was observed however that:– (i) 13th February, 1990 – Request for N7,050,000 out of which N2,050,000 was approved on the same date, being 13th February, 1990 by the accused. h (ii) Facility of N5milion (exhibit P65) approved by the accused on 12th December, 1990, by an internal memo instructed the Senior Manager Operations of Group Merchant Bank Limited to issue a cheque to Chartered i Bank Limited on behalf of Amalgamated Trustees Lim- ited. The instruction was complied with (exhibit P65). (iii) N1.5 million (page 6 of exhibit P65) an overdraft of 23rd January, 1991 requested by the letter of the j company and approved by the accused. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 44 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(iv) N4.1 million (page 10 of exhibit P65) approved by the a accused by internal memo. All these facilities were irregularly granted, no appraisal, no security, although (i) and (iii) were within the accused’s b lending limit of N4 million. On the aggregate the total sum of N13,650,000 granted exceeds his limit. It is noted that an application to open an account was made on 29th January, 1991, by this company to the bank and al- c though approval to open was not granted till 12th Novem- ber, 1991, the account became operational. This account as at 31st October, 1995 had a credit balance d of N310.30, the company having recently liquidated debt. Elsemco Textiles Limited: Exhibits P68, P69 and P70 relate to this and its transactions were as follows:– (i) 26th May, 1991, upon application for loan of N4 mil- e lion, accused by internal memo to Senior Manager Op- erations instructed a cheque for the sum to be issued to United Commercial Bank on behalf of Elsemco Tex- tiles Limited for a company, Ashafa Food Factory Ni- f geria Limited. On 7th December, 1993 accused signed a letter demanding from the company repayment of the sum of N10,817,105.37 debit in the account of the company. g The grant was irregular, no appraisal, no mention of obtaining of security and Group Merchant Bank did not see the particulars of the directors. The letter of demand written by the accused was addressed c/o Mr Dotun Duro Emmanuel, a h director of Group Merchant Bank, and sent through him because he was connected with the facility. Mr Duro Emmanuel’s reaction to the letter of demand to this company which cannot now be traced was to write the i managing director of Group Merchant Bank Limited dated 19th April, 1994 stating that he, Mr Duro Emmanuel, ceased to be a shareholder of the company in June, 1990, months before Group Merchant Bank granted the loan. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 45 a The address of the proprietors of this company were not on the application to open an account (exhibit P68). The company could not be found though there is an address of 13 b Lodge Road, P.O. Box 7245, Kano given in exhibit P68, the statement of account of the company from 24th July, 1991 to 31st October, 1995 shows a debit of N16,831,353.45 which remains unpaid till date. c Merchandise Mart Limited: Exhibits P71, P72 relate to this. A current account holder of Group Merchant Bank, its directors, as shown in exhibit P7 are Aminu Dalhatu, the d younger brother of Group Merchant Bank Chairman and A.V.M. Mohammed and Aliyu Alkali. The transactions in question are as follows:– (i) 30th November, 1992: Letter of request for cheques to- e talling N19.73 million to be paid. This was approved by the accused on 28th December, 1992 to 10 names listed in the letter (exhibit P72 signed by A.V.M. Mukhtar Mohammed, the chairman of Group Merchant Bank Limited at the time). He was a signatory to the account f of this company. The payments were debited to the account of this company at the time the account was not in credit. It had N39,245,878.75k debit after the above payments on its behalf by Group Merchant Bank Lim- g ited. (ii) Further withdrawals and charges left the account at N63,785,340.69k debit as at 30th June, 1992. The grants were irregularly made, no formal application h for so large a loan, no appraisal, no security of any kind, the sum was in excess of the accused’s lending limit. (iii) 28th January, 1993: N2.9 million (exhibit P72 page 54) i has a letter from U.C.B. Limited stating that A.V.M. Mohammed, Group Merchant Bank Limited’s then chairman, and Delaqua Limited owed it this sum. This was paid by Group Merchant Bank Limited. The rules j and regulations were not followed, the account was [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 46 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

then overdrawn, no appraisal, no security obtained. a Altogether N31,294,642.66 was granted to Merchan- dise Mart Limited and exhibit P73, its statement of account, shows that, as at 28th February, 1994, shortly b before the accused left office, the outstanding amount was N19,938,419.84 debit. This has however been fully settled by 31st October, 1995 leaving a credit of N238.32. c Heleena Farms Limited:– The exhibits in this case are exhibits P74, P74(i), P74(iii), P75 and P76. The directors are:– d A.V.M. Mukhtar Mohammed, the chairman of Group Merchant Bank Limited. Mrs Helen Zang e Mr A.C. Mills Mr Stephen Godwin Brown Mr Fred Jorgen Christensen Mr Geoffrey Baker f The transactions relating to the company are:– (i) 7th December, 1992: Request for N3.1 million approved by the accused (exhibit P75) (ii) The total sum approved by the accused for this firm g was N3,381,277.39. Although within the accused’s lending powers, the account was already overdrawn to the tune of N5,348,105.38 as at 7th December, 1993, when the grants were obtained as shown in its state- h ment of account from 18 May, 1993 to 30th September, 1995. On 28th September, 1995 there was N9,340,967.27 debit in the account. This company has however liquidated its indebtedness by i 30th September, 1995 leaving a credit of N301.37. There is evidence that the grant to this company failed to follow laid-down rules and regulations, no formal application for the facility, just a request, no appraisal, no security j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 47 a of any kind obtained and the account was overdrawn at the time of the grant. Positive Financial Trust Limited: Re exhibits P77, P78. b The transactions involved were:– Request for draw down of N3 million by the accused who granted an exemption in respect of this loan from provision of security (see P2 of exhibit P77). As at 31st c October, 1995 this company still had a debit of N2,107,866 unpaid. The loan was unsecured contrary to rules and regulations of Group Merchant Bank Limited. Textra Development Company Limited: Re exhibits P79 and d P80 A total sum of N13,272,895.90 was granted this company as overdraft (see exhibit P80), for example:– e (i) N3.5 million approved by accused; (ii) N1.05 million approved by accused; (iii) N1.5 million approved by accused etc. As at 31st October, 1995 the account stood at N6,425,662.04 f debit which remains unpaid till date. Some of the rules were not followed in making the grant, no appraisal of the company. But by witness PW4’s admission, a security was put in place. g The aggregate amount was in excess of the accused’s limit. Mr K.I. Ogunlende, a customer with a current and loan account (exhibits P83 and P85) are relevant: Transactions in issue were:– h (1) 21st September, 1992 to 14th April, 1993 following request; overdraft of N11.85 million was approved for this customer by the accused on his current account. On the loan account, N12 million was granted. Exhibits P83 i and P85 contain full details of the request and approvals given by the accused on the two accounts. The Tribunal noted that, at the time of the grant of the several overdrafts that made up the grant, the accounts were in debit. PW4 j states that the grant were not made in accordance with the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 48 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. rules and regulations of the bank in that, as can be seen from a exhibit P85, there was no formal approval of the facility which should go before the board of Group Merchant Bank Limited, no appraisal before the facility was granted and the b amount advanced exceeded the managing director’s, i.e. the accused’s, limit of N4 million. Looking through the account, however, the Tribunal noted that this one customer who kept on payment in substantial c sums into his accounts which he regularly operated, causing the debit not to fluctuate, rather than over-accumulate. As at 31st March, 1994, about the time the accused left Group Merchant Bank, the current account in exhibit P84 showed d N3,521,007.98 debit which interests brought to N4,426,526.40 debit as at 28th April, 1995. This has been paid off as at 31st October, 1995, leaving a credit balance of N72,548.30 in the account. e This customer, however, also got some of his grants from Sundry Debit Operations, out of which grants were made to him on his overdraft account (see page 17 of exhibit P83). N6,963,286.68 was paid to this customer on 29th Septem- f ber, 1992 (see memo of accused instructing acting general manager, Kerry Oyakhire to pay various sums including N1,963,286.68 to F.D.B.) The accused approved all the grants to this customer which altogether were over and g above his powers. But both the loan and overdraft accounts were confirmed settled by PW4. It is observed in his oral evidence that PW4 mentioned the figures in the loan account but not the ones in the overdraft h account. But exhibit P83 bears out the figures. Pedamacgrek Shipping and Trading Company Limited:– Exhibits P86, P87, P88 relate to this company. The grants to it were as follows:– i The total amount borrowed was N1,4250, following three requests in exhibit P87 – made in two parts: an equipment lease facility for N940,000 which did not require any security, then an overdraft of N485,000 which was unsecured j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 49 a remains unpaid. As at 31st October, 1995 the account was N4,822,217.5 debit as shown in exhibit P88. No further payments were made since then. b ATIF Securities Limited (Associated Trust Investment and Finance Limited):– Exhibits P89 and P90 are relevant to this customer of Group c Merchant Bank Limited. It got N20 million through an application for commercial paper said by prosecution witnesses not to be genuine as they did not comply with rules and regulations or met the procedure, description or tenure of commercial paper in banking practice. d This company requested and was granted liquidation approval by the accused for its investment in Group Merchant Bank, and also the sum of N28 million was approved by the accused and paid for it to the Central Bank of Nigeria for a e banking licence. No appraisal, no information memorandum about the company, no invitation to investors to buy the commercial security f paper, no of any kind. As at 30th September, 1995 the account was N4,603,815.37 debit and no payments were made ever since. SAVIC Nigeria Limited:– g Exhibits P92(1), P92(ii), P93, P94 are relevant. This company, a customer, had granted it by the accused N1,180,000 overdraft, no security, not processed in accordance with rules and regulations, and procedure of the bank, no ap- h praisal. It was the accused who approved the facility in writing in exhibit P93. As at 31st October, 1993, the account had a debit of N4,616,879.44 debit. FDB Financial Services Limited:– i Exhibits P95, P95(i), P96 and P97 relate to this customer of Group Merchant Bank Limited which got an overdraft. The total sum approved for it by the accused between 13th De- cember, 1991 to 19th December, 1993 was N6,6240. The j prosecution showed that this was irregularly granted. No [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 50 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. appraisal, no security before the grant. As at 31st October, a 1995, there is in the account N23,271,578.33 debit and no repayments were made. The Tribunal, now looking through exhibit P97, the b statement of account (batch of 30 pages), it was observed that this account hardly ever had money paid into it. Be- tween 21st January, 1993 when it had N560,413.64 debit and 31st October, 1995 when it had N23,317,578.33 debit, c only two payments were made into the account. 9th February, 1994 N 2,652.82 9th February, 1994 N38,873.00 This was all throughout. d Reece Limited:– Exhibits P112–P114 and evidence of PW4 show that the transactions with this company were as follows:– e (1) Kola Ogunlende is the chairman and managing director of this company (exhibits P112 and P112(1) which got a guarantee from the Group Merchant Bank Limited for N6,090,714 as per Group Merchant Bank letter of guar- f antee No. 15/92 irrevocably undertaking to pay United Commercial Bank Limited (U.C.B. Limited) N4 million upon receiving its first written demand that the amount was due from the customer and had remained unpaid. This guarantee later crystallised when the customer did g not pay. Group Merchant Bank was held liable and the liquidator of U.C.B. Limited (in liquidation) credited the account of Group Merchant Bank Limited in its bank with the sum of N6,092,714.76 as liability incurred by h the guarantee (see page 7 of exhibit P113). There is evidence that the customer redeemed part of this, leaving a balance of N2,943,381.32 debit as at 31st October, 1995. i The witness affirms that this grant did not follow the rules and regulations of the bank and the guarantee was granted on 14th August, 1992 before the company opened an account with Group Merchant Bank Limited, after 30th j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 51 a November, 1993 (see exhibit P112 page 1 and P113 pages 1–4):– Senide Nigeria Limited; Delgrade Agricultural Processing b Industries Limited; Citagroup Air Services Limited; Lydio Agric and Fishing Company Limited; Laseum Impex Limited All five companies which are not customers of Group Mer- chant Bank Limited, relate to exhibits P98, P115, P40, c P40(i), P40(ii), P107, P116. The evidence, which the Tribunal accepts, was that the accused approved payments of grants to these five companies by an inter-office memorandum in exhibit P98 page 2 to be d made and indeed made out of the Sundry Debit Account. The total involved and none of which the companies applied for, was N36,450,000. After approval, cheques for the sum for each company was issued to United Commercial Bank e Limited (U.C.B. Limited). It was made out as follows: 1. Lydio Agric and Fishing Co Ltd N9,311,475.41 2. Citagroup Ltd N8,380,327.87 f 3. Senide Nigeria Ltd N7,449,180.83 4. Laseum Impex Ltd N4,655,737.17 5. Delgrade Agric Processing Ltd N6,653,279.22 The cheques were collected by Dotun Duro Emmanuel, a g director of Group Merchant Bank Limited, who signed for them in exhibit P116 (items 1–9). He is a director of all five companies. The disbursements were never authorised by the board of h the bank as board minutes, exhibit P10, shows. There is no memorandum issued to request for these facilities from the board, no security, no appraisal, nothing whatsoever done as required by the rules and regulations of the bank. Evidence i shows that, “not one Kobo of this sum has been repaid”, as PW4 put it. The Tribunal noted this version of the accused in his statements, exhibit P39, with regard to the payments out of j the funds of the bank, this huge sum. There is not a single [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 52 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. document or evidence to buttress or to show that the board a approved the use of five companies to remove funds from the bank to pay for new shares to increase the share capital of Group Merchant Bank. Exhibits P10 and P25, the board b minutes, contain nothing whatsoever about the transaction of paying for shares of shareholders with the funds of the bank. At the twenty-first meeting of the board held on 23rd No- vember, 1993 there was a resolution to increase the paid-up c capital of Group Merchant Bank from N42 million to N200 million, that a resolution be passed at the next general meeting of the company to increase the shares to N250 million by the creation of an additional N200 million ordinary shares of d N1 each. The version of the prosecution is preferable, that is, that the accused approved these payments, failing to act in accordance with laid-down procedures of the bank which he managed, there was no board resolution, no security, the e commercial paper procedure was never followed (see evidence of PW5, the C.B.N. Bank examiner, and PW4 the executive director of Group Merchant Bank). PW5 was Richard Okodugba, a banker of Central Bank of f Nigeria, Bank Examination Department in banking for 17 years since 1978. The witness, together with other staff of N.D.I.C. carried out a special examination of Group Merchant Bank Limited g in June, 1994. After this they issued a report which he signed with Mr A.G. Ahmed of N.D.I.C. It was a 16-page document with annexures in 52 pages admitted in evidence as exhibit P106. In his evidence, Mr Okodugba stated that, h from the records made available to them, they found that:– (1) the accused withheld much vital information from the Group Merchant Bank board. (2) He exceeded his limit of authority to grant loans and i other facilities which was N4 million. (3) He granted unsecured and unapproved facilities so that the debits in the director-related accounts were more than N50,000 in each account without obtaining the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 53 a Central Bank of Nigeria’s approval as required by BOFID. (4) The existence of a Sundry Debit Account and the use to b which it was put by the accused was noted in the books of the bank. The accused used the account to grant unauthorised credit to various companies and individuals. (5) The accused was a director in a company, Red Star Ex- c press Limited. This company had a debit balance of N32,350,303 as at 30th April, 1994. The facility was unsecured and unapproved. (6) Regarding contingent liability to which the accused ex- d posed the bank, it was found that a bond guarantee was issued on the instruction of the accused to Fidelity Union Merchant Bank on behalf of Tauro Products Limited. Tauro Products Limited had no account with Group e Merchant Bank Limited, i.e. it was not a customer. It held a debit of N7,048,714 as at 30th April, 1994. (7) On the use of commercial paper the examiners made some findings. This witness who had been in banking for f 17 years explained its concept as a short-term promissory note issued by a borrower which is usually a company that is well known. Companies and individuals which have enough funds invest in commercial paper. g Banks usually play dual roles, either as an agent of the parties (for which they receive commissions) or as guarantor for the investor. In such a case, if at maturity (usually 30 or 90 or 180 days) the borrower defaults, the bank is called upon h to pay. For any of these the bank must open credit files and obtain all approvals required for the grant of facilities. Ap- proval must be obtained on the day the commercial paper came in and before the funds are given out to the borrower. i In the books of the bank commercial papers are recorded as credit facilities. The witness said they found instances of abuse of this type of credit facility by the accused as set out in exhibit P106. j No approval was obtained. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 54 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

This evidence was not challenged or controverted. We a looked at the Examination Report exhibit and noted as follows:– The above findings were confirmed. Page 3 of the report b recorded that the examination was prompted among other things by instability in the board’s membership, inability to pay penalties imposed by C.B.N., failure to prepare ratios since 1993, inability of Group Merchant Bank to redeem in- c ter-bank obligations, its customers obligation, complete ero- sion of the capital base of the bank and its persistent overdrawn position with the C.B.N. The Tribunal read the 135- page board minutes (exhibit P10 and also exhibit P25) and noted that the position described by PW5 were confirmed by d the contents of the minutes. For example, it was found that the tide suddenly turned at the board. The positive outlook at the inception soon turned negative to the extent that panic could be detected from the minutes from the twenty-first e meeting of the board held on 23rd November, 1993 and also the twenty-second, twenty-third and twenty-fourth board meetings when the chairman and managing director, the accused herein, reported that the position of Group Merchant f Bank Limited had become really bad, that the bank was earning virtually no income, the bank was overdrawn at all its commercial banks and “cannot meet its obligations to creditors, customers and to other Banks”. g The twenty-second meeting of the board of 7th December, 1993 was indeed called to discuss what should be done about the bank’s position. Creditors were owed about N429 million. The accused at the twenty-fourth meeting on 25th January, h 1994 informed the board that the Bank, “needs an inflow of about N500 million to restore confidence but the Bank’s present Board and shareholders no longer engender confidence in the investing public”. He said the only way was for the Shareholders to sell their shares to people willing to buy i them so as to raise money and he had been approached by at least three people who were interested in buying the bank. It was during this period that mention was made for the first time about the fact that directors were indebted to the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 55 a bank and the debts unsecured, and some of the companies named in the charge were mentioned. It was observed by the Tribunal that Red Star Express, Tauro Products Limited and b Hyperion Finance and Investment Company Limited were never mentioned or discussed. The foregoing is the summary of the evidence, which the Tribunal accepted. There is some more which in the course c of judgment will be shown. The evidence so accepted as true were mainly documentary, the witnesses gave their evidence lucidly and clearly. Each witness, due to his experience and connection with the matters on which he testified, explained d them confidently. We found them in the main to be witnesses of truth. At the close of the case for the prosecution, the accused was called upon, pursuant to section 5 of the Procedure of e Trial of Offences before the Failed Banks Tribunal. He was asked by the Tribunal whether he wished to give evidence on his own behalf and whether he intended to call witnesses other than witnesses to character. To both questions the ac- f cused replied that he did not wish to give evidence or to call any witnesses. The defence had therefore rested their case on the prosecutions. g In the circumstances, it was for the prosecutor and the learned defence S.A.N. to round off their case for their clients. In view of the volume of documents and evidence, the Tri- h bunal agreed to accept written submissions from Counsel first by the prosecution, then, the defence. Leave was granted to the prosecution to file a reply on points of law raised by the defence. In the premises, Emeka Ngige, Esq., i for the prosecution summed up in a 92-page document. In reply to the written submission of the prosecution, the defence, led by Chief F.R.A. Williams, S.A.N., also filed a written 100-page address. To this, learned Counsel, Emeka j Ngige, Esq., replied also (by a 91-page document) on points [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 56 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. of law. Each Counsel later, in an oral address, further elabo- a rated on his written submission. Substantial points of the law were, in my view, indeed raised by the learned Senior Advocate and Emeka Ngige, b Esq., responded with energy. Before proceeding to deal with these, I wish to thank the learned Senior Advocate for making available to this Tribu- nal the wealth of his tremendous experience. The industry c which obviously went into the submission was noted with admiration. Emeka Ngige, Esq., for the prosecution, I must also commend for his industry and effort in this task which is by no means easy. Together all of us once more begin to d build up a new set of judicial precedents on this enactment which are testing in our law courts, now sitting as Special Tribunal to try offences for which jurisdiction have been conferred by the Failed Banks . . . Decree, 1994. e Let me however deal first with an issue of evidence which came up on 11th January, 1996 in the course of the evidence of the fourth prosecution witness. On 11th January, 1996, I decided to give a ruling with this f judgment on an objection raised by the defence during the evidence-in-chief of PW4. I now give it. It relates to a question put to the witness by the learned prosecutor. The prosecutor, after the witness recalled some earlier evidence he g gave, asked the witness if he still stood by that earlier statement. Chief Williams, S.A.N., objected on the grounds that the prosecution could not be cross-examining his own witness. The learned prosecuting Counsel replied that, should a witness discover that he made a mistake in his earlier evi- h dence, he was entitled in the interests of justice to correct it. In my view it is more the form of question rather than the answer that was being objected to. Chief Williams was right in his objection under the rules of evidence. i When, however, the Tribunal ruled that to save time, the trial should continue and that the ruling would be in the final judgment, the trial continued and the witness answered the question, as the Tribunal had indicated that should it be later j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 57 a found that the evidence ought not to be admitted, it would be expunged. When the witness answered the question put by the prosecutor, it was then found that it was a correction of b some earlier vital evidence. It relates to the register of directors which the defence had in cross-examination of PW1 asked about. The evidence was indeed relevant and the correction par- c ticularly needful. The Tribunal has decided to invoke its powers, in the light of the above, to admit the evidence (not to expunge it), pursuant to section 3(4) of the Failed Banks . . . Decree (as d amended by the Failed Banks . . . Decree (Amendment) (1995). The section provides that “the Tribunal shall have powers to admit and act on any evidence which it considers relevant in any . . . criminal proceedings notwithstanding e that the evidence is inadmissible under any other law”. The evidence is therefore admitted and will not be expunged. f Now as to the written and oral submissions, of learned Counsel for the parties, they form part of the record of these proceedings. Each of them, prosecution’s submission ran into 92 pages, defence’s 100 pages and the prosecution’s re- g ply to points of law, 89 pages. Due to their length, therefore, I shall only set out sketchy summaries here but will make reference to them in greater detail in the course of the judgment. h For the prosecution the learned prosecuting Counsel, Emeka Ngige, Esq., in his submission took the counts in turn. He set out what he considered essential ingredients of the offence, the evidence establishing each of the ingredients i and concluded in respect of each count that the essential ingredients have been proved. Counsel also drew the attention of the Tribunal to the fact that the defence had not challenged or controverted any part of the oral and documented j evidence adduced by the prosecution. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 58 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Counsel submitted in respect of the various counts that the a prosecution had proved its case beyond reasonable doubts. He urged the Tribunal to enter a verdict of guilty on each count. b With what I felt was a deeply and well thought-out and a most illuminating legal opinion, the learned Senior Advo- cate, Chief F.R.A. Williams, for the accused summed up the first part of his submission as follows:– c “This is the case of a bank which is not really a bank because all along it was operating under a Banking Licence and it was managed by a managing director who was not really a managing director duly appointed or holding office according to law.” d He said the foregoing was a seriously conceived summa- tion of a tragedy of errors which befell the incorporated body known as Group Merchant Bank Limited. He stated that the first question for consideration in this e case was whether the prosecution had succeeded in establishing that the Group Merchant Bank was a body to which the provisions of BOFID applied. If the answer to that question was in the negative, it would be easily demonstrated f that all the counts contained in the charge before the Tribu- nal must fail. The learned Senior Advocate proceeded to examine the legal status of the Group Merchant Bank Limited and the ef- g fect of the Banks and Other Financial Institutions Decree, 1991 (referred to as BOFID, for short) and stated that the question raised had arisen because of the failure (no doubt through inexcusable lapse on the part of the law maker) to h make the transitional or saving provisions which were usually in enactments of this nature. In the result, he submitted, the effect of section 2 of BOFID as it stands in combination with the repeal of the Banking Act, 1969 by section 62 of i that same Decree, was to render it illegal (with effect from 20th June, 1991 when the Decree came into force) for any company to carry on any banking business in Nigeria unless it held a valid banking licence issued under BOFID. Accord- ingly, as from the date BOFID came into force, i.e. 20th j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 59 a June, 1991, it became illegal for Group Merchant Bank to carry on the business of banking in Nigeria unless it had a licence pursuant to section 2 of BOFID. He pointed out that b the evidence before the Tribunal showed that the licence under which Group Merchant Bank operated or purported to have operated was under a licence issued pursuant to the provisions of the Banking Act, 1969 and not a licence issued pursuant to BOFID and that, on the plain meaning of section c 2 of BOFID, it was and remains illegal for Group Merchant Bank to have continued to carry on banking business in Ni- geria on and after 20th June, 1991. He referred to the contents of exhibit P1, the licence of Group Merchant Bank d Limited to carry on banking business. This theme of the invalidity of the licence ran through the submission of the defence on each of the counts in the charge, particularly counts 1–11 and 13 and 14 charged un- e der BOFID, and count 12 under the Banking Act, 1969. One major conclusion which the defence reached was in general, a director, manager or officer of the Group Mer- chant Bank Limited could not be found criminally liable for f offences under BOFID which could only be committed by someone who was a director, manager or officer of a “bank”. For, it was submitted, it was not possible for the Tribunal g to come to the conclusion that Group Merchant Bank was a Bank under BOFID. The Tribunal was invited to find as follows:– (a) The contract of employment signed and sealed by h Group Merchant Bank and executed by Mr Odebode (exhibit P6) was null and void because at the date thereof (1st August, 1990) the bank had not been incorporated. It is to be observed in this connection that section 72 of the Companies and Allied Matters Decree i which enables a pre-incorporation contract to be ratified by a company after incorporation, cannot help because that Decree came into force after incorporation of the company, i.e. on 31st December, 1990 per Decree No. j 32 of 1990. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 60 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(b) Notwithstanding what is said in (a) hereof, the board a resolution of 29th August, 1990, effectively brought into being a contract of employment between Mr Odebode and the Group Merchant Bank on the terms and condi- b tions contained in exhibit P6. (c) Mr Odebode was a director of Tauro Products Limited (a company which is not a subsidiary of Group Mer- chant Bank Limited) from 1985 up to 1995 when ex- c hibit P19 was obtained by PW1. (d) When Mr Odebode entered into a contract of employment with Group Merchant Bank on 28th August, 1990, he and the bank did so in breach of section 19(3)(a) of d BOFID and the said contract of employment was illegal null and void. (e) If, contrary to the argument put forward on behalf of the accused, the Tribunal comes to the conclusion that Mr e Odebode was not a director of Tauro Products Limited when he purported to enter into a contract of employment with the Group Merchant Bank, then it is respectfully submitted that the contract of employment, if it ever existed, became discharged by supervening illegal- f ity when Mr Odebode became a director of Hyperion Finance and Investment Company on 16th May, 1991 (see exhibit P24). In a final reply titled “General Conclusion”, the defence g submitted on behalf of the accused person that he ought to be found Not Guilty and discharged on all the 15 counts for the reasons given in this written address. These reasons include the following:– h “1. That the Group Merchant Bank is not a ‘bank’ within the meaning of that expression as used in BOFID. Accordingly he cannot be convicted on the counts 1–11 or on counts 13– 14. i 2. The Group Merchant Bank is not a ‘bank’ within the meaning of the expression as used in the Banking Act Cap 28. Accordingly, he cannot be found guilty on Count 12. 3. The Tribunal has no jurisdiction to entertain Count 15 and that charge ought to be struck out. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 61 a Further and in the alternative; 4. Since, there is no proof that the accused person was a director or Manager of Group Merchant Bank, it follows that all the counts which require the prosecution to prove that the b accused held either of these positions of office, as an ingredient of the offence, must fail. For this reasons counts 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14 must collapse. 5. The prosecution has failed to prove that the accused person c had personal interest in the advances, loans or credit facilities mentioned in the evidence before the Tribunal accordingly counts 1, 2, 3, 8, 9, 11,12 and 13 must fail. 6. Counts 8 and 9 of the charge disclose no offence known to law because the expression ‘advance loan and facilities’ d which occur in section 18(1) of BOFID does not include ‘Bank guarantee’. 7. The prosecution failed to prove that there was in force at the time when the offences were allegedly committed ‘rules and e regulation of the Bank’ which apply to the transactions mentioned in some of the counts. For this reasons counts 2, 11, 12 and 13 must fail. 8. Count 10 defeats itself in that the allegation that the accused person held office in a Company which was not a subsidi- f ary of the Bank automatically meant that he became disqualified from acting as a director of the Bank as from that date (if not before) so he cannot be found guilty of default of duty as a director of the Bank. 9. For the reasons given in paragraph 8 above counts 4, 6 and g 7 of the charge must fail as well. 10. PW1 (the Acting Company Secretary) and PW4 (the Execu- tive Chairman of the present Management Board) both claimed that there is no record where directors disclosed h their interest to the Board. This cannot be true. At the oral presentation of this address the following passages will be read out from the minutes of the Board, exhibit P10. This shows that the two witnesses can hardly be described as reliable. Their evidence that there was no disclosure to the i Board ought to be rejected. 11. The prosecution has failed to prove that the transaction whereby the accused made or was responsible for making payment of N6,295,000 to the account of Car Link Limited was not a genuine lending transaction and accordingly the j charge must fail. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 62 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

12. The Tribunal has no jurisdiction in these criminal proceed- a ings to direct the accused person alone to pay to the bank the sums mentioned in counts 11, 12 and 13 or any such sums.” b The reply of the prosecution to points of law raised by the defence in its final submission countered each point raised by the defence. Learned Counsel for the prosecution, after citing many legal authorities, in what was also titled “Gen- c eral Conclusions”, submitted as follows:– “From the totality of submissions made herein, we urge the Tribu- nal to reject without reservation the argument of the Learned Counsel for the defence because:– d (1) Group Merchant Bank is a ‘Bank’ both under the Banking Act and BOFID; (2) The Tribunal has jurisdiction like its counterparts in other zones to try offence of stealing which is a ‘financial malpractice’; e (3) It has been proved both in law and in fact that the accused was a ‘director qua director’, and ‘Manager qua Manager’, of Group Merchant Bank and cannot hide under the cloak of any phantom theory to escape from justice; f (4) That the prosecution has been able to prove beyond any reasonable doubt that the accused person had personal interest in the advances, loans or credit facilities which he recklessly granted to the Companies listed in the charge sheet. The prosecution is not required to prove how the advances g entered into the personal pocket of the accused person; (5) Counts 8 and 9 disclose offences known to law as ‘Bank guarantee’ comes within the expression ‘advances, loans and credit facilities’. Reliance is placed on the definition in h the Failed Bank Decree and under the rules of exceptional construction; (6) The prosecution has been able to prove that Group Mer- chant Bank had ‘rules and regulations’ (exhibits P5; P8 and i P9 respectively) which the accused person flouted with reckless abandon and should be convicted on the relevant counts; (7) Count 10 did not and could not defeat itself as the accused person who had dual status during his tenure of office was j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 63 a properly charged for offences covered by his dual capacities; (8) PW1 (the Acting Company Secretary) and PW4 (the Execu- b tive Chairman of the present Management Board) are witnesses of truth and were unshakened in their testimonies. The minutes of the meeting of board being relied upon by the Learned Counsel to show disclosure of interest by some directors should be rejected by the Tribunal. A disclosure c after the Bank had been looted by the directors and was at the brink of technical insolvency can hardly be accepted by the Tribunal as ‘disclosure of interest’; (9) Enough evidence has been led for the Tribunal to hold that d the accused person had committed the offence of stealing by the act of fraudulently using the money belonging to the bank to offset debt incurred by the Company in which himself and wife were ‘sole will and directing minds’. It was e not a lending transaction, it is stealing simpliciter; (10) The Tribunal has the power to invoke its restitutive jurisdiction by directing that the accused person should refund to the Bank, the sums of money which he singlehandedly and f most recklessly advanced to the director related Companies; (11) The Tribunal is urged to apply the rules of substantial justice and ignore the ghosts of technicality still standing in the path of justice; g (12) The Tribunal is accordingly urged once more to convict the accused person on all the Counts.” Before taking the charges count by count, it is necessary to deal first with vital issues of law raised by the defence led h by Chief FRA Williams, S.A.N., so dramatically expounded in his written submission. Their decision one way or the other will affect the life or viability or, as the learned S.A.N. put it, “the substratum of the charge against the accused”. To i our minds, they are not all simply technical as the learned prosecuting Counsel is urging. Some seem to touch on the foundation of the charge. It is in the foregoing spirit we now examine the submis- j sions of the defence and the prosecution. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 64 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The legal status of Group Merchant Bank Limited:– a The learned S.A.N. submitted that the absence of a saving clause in the BOFID which repealed the Banking Act, 1969, the operative statue under which the Group Merchant Bank b Limited was incorporated and licensed, has rendered illegal the operations of Group Merchant Bank Limited as a bank. According to him, the question was whether the prosecution had succeeded in establishing that Group Merchant Bank c Limited is a body to which BOFID applies. In other words, it is that exhibit P1, the banking licence, is invalid and so Group Merchant Bank Limited is not a bank. It is perfectly correct that there are no transitional or saving d provisions in BOFID, as is found in many statutes. The many examples given by the defence indeed stand out, such as the examples of the Banking Ordinances of 1952 and 1958, the Banking Act of 1969 etc., all of which have e transitional provisions, which are absent in BOFID. It was then submitted by the defence that the effect of the absence of such provisions in BOFID is that Group Mer- chant Bank Limited does not comply with the requirement in f section 2 of BOFID and so is not a “bank” as enacted by BOFID. The answer to the question, according to the defence is, therefore, that the prosecution has not established that Group g Merchant Bank Limited is a bank. In that case all the counts in the charge must fail. For the basis of the charge is that Group Merchant Bank Limited is a bank. The submission dwelt on the need for a saving clause or h transitional provision, citing the wise words of Tindal, CJ in Kay v. Goodman (1830) 6 Bing 576; 130 E.R. 1403, and also Craies on Statute Law, and several other legal authorities. i The learned prosecuting Counsel, Emeka Ngige, Esq., countered that a savings clause is not necessary in every case. He cited Francis Bennion Statutory Interpretation (2ed) (1992) at page 495 and several other legal authorities. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 65 a We have had the privilege of looking at these legal authorities cited by learned Counsel on both sides and others seen by us, in considering the submissions of Counsel. But the b issue here really is whether the presence of a savings clause or transitional provision is imperative in every enactment. From the authorities, the view seems to be that the insertion of such clauses or provisions is not an absolute neces- c sity, although some times advisable, as it is put “to quieten doubts”, or “by way of reassurance or caution” (see the case of Ealing London Borough Council v. Race Relations Board (1972) A.C. 362 at 363. It, in fact, appears that the more recent view is that, at times, the inclusion of savings clauses d tends to create more problems than solve them. For equitable considerations and principles of law that frown at retro- activity, it is believed that rights and liabilities already accrued before the repeal of a statute should remain, whether e there be a savings clause or not in the repealing statute. Francis Bennion (supra) suggests that good draftsmen resist the addition of unnecessary savings. The history of the use of savings clauses and transitional f provisions shows that it is a combination of the foregoing principles that led to the insertion of Interpretation Statutes, provisions such as we have in section 6 of the Interpretation Act, Cap 192 Laws of the Federation of Nigeria, 1990. Sec- g tion 6 enacts:– “The repeal of an enactment shall not:– (a) revive anything not in force or existing at the time when the repeal takes effect; h (b) affect the previous operation of the enactment or anything duly done or suffered under the enactment; (c) affect any right, privilege, obligation or liability accrued or incurred under the enactment; i (d) affect any penalty, forfeiture, or punishment incurred in respect of any offence committed under the enactment; (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment; and any such investi- j gation, legal proceedings, or remedy may be instituted, [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 66 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

continued or enforced and such penalty, forfeiture or a punishment may be imposed as if the enactment had not been repealed.” We should think that the above provision takes care of the b enactment such as BOFID which does not have a savings provision. This view conforms with tested principles held by the courts that it can never be the intention of the legislature to undo by means of another and repealing statute something c that had already been done under a statute. All rights and privileges acquired remain and all previous operation of the enactments remains. Thus in England, whose laws have had every influence on d ours in this country from our colonial history, even when the interpretation provisions of 1889 (from which ours were derived) were not made, under the common law, the courts were unwilling to say that the legislature, by a new statute, e intended to undo what had gone before. Thus all things duly done under the repealed statute are not affected (see Con- struction of Deeds and Statutes by Sir Charles Odgers’s (4ed) 254–255 et seq.; also Falcon v. Famous Players f (1926) 2 K.B. 474. The Falcon case, a decision affirmed by the then Court of Appeal in England, clearly illustrates the application of these provisions in section 6 of the Interpretation Act (similar to g section 36(2) of the English Interpretation Act of 1899). It was therein held that copyright in works existing before the passing of the Copyrights Act, 1911 (which repealed the Dramatic Copyrights Act, 1883) were unconditionally pre- h served by the 1911 Act. The foregoing in our view is sufficient to take care of this submission. But we will say a few more words. This submission on savings provisions have been put forward by the i defence to show that Group Merchant Bank is not a “bank” in the absence of a savings clause in BOFID, under which the accused is charged. This in the view of the defence is the case with banks licensed under the repealed statute, the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 67 a Banking Act, 1969. The reason given is that BOFID provides in section 2 as follows:– “(1) No person shall carry on any banking business in Nigeria b except it is a company duly incorporated in Nigeria and holds a valid banking licence issued under the Decree. (2) Any person who transacts banking business without a valid licence under this Decree is guilty of an offence and liable on conviction to a term of imprisonment not exceeding 10 c years or a fine not exceeding N500,000 or both to such imprisonment and fine.” Reference was also made to the interpretation of the word “bank” in BOFID. d The defence concludes that with failure to make transitional or savings in BOFID as in the previous Banking Act, it became illegal for Group Merchant Bank Limited to carry on the business of banking in Nigeria without a licence is- e sued pursuant to section 2 of BOFID. According to the defence, Group Merchant Bank Limited did not answer to the definition of “bank” in BOFID while holding exhibit P1, a licence issued under the Banking Act repealed by BOFID. It f was then concluded that with the licence of Group Merchant Bank issued under the Banking Act, 1969, it was illegal for the bank to carry on business without a licence under BOFID. g In view of the decision which we have reached above that there was no need for savings provisions in BOFID to save Group Merchant Bank Limited, we are, with respect, not able to uphold these submissions. Group Merchant Bank h Limited is a “bank” duly licensed despite its not having a licence under BOFID. We also hold the view that in the premises, the legal effect pointed out by the defence, viz. that none of the offences in i counts 1–11 and 13–14 charged under BOFID can be committed by the accused is not applicable. The legal consequences envisaged about the criminal liability of the accused as manager, director or officer of the bank will not arise. The j accused can be proceeded against. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 68 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The status of Group Merchant Bank under the Banking Act a The submission here, in summary, was as follows: If the Tribunal holds that Group Merchant Bank Limited had a valid licence, notwithstanding the absence of savings provi- b sions in BOFID and the meaning of “bank” in section 2 of BOFID, another thing strikes at the foundation of the validity of the licence. It is this, it was given on 31st July, 1990 while the company was incorporated on 28th August, 1990. c It was argued that the Minister of Finance could not grant a licence to a non-existent company in view of the provisions of section 2 of the Banking Act, the statute in force at the time the bank was incorporated and licensed. d Section 2 of the Banking Act provides:– “2(1) Any company which desires to carry on banking business in Nigeria shall apply in writing through the Central Bank to the Minister for the grant of a licence and shall submit e the following, that is: (a) a copy of the Memorandum of Association and Arti- cles of Association or other instrument under which the Company is incorporated duly verified by statutory declaration made by a director, Secretary, or other f Senior Official of the Company; (b) a copy of the latest balance sheet of the company; and (c) such other particulars as may be called for by the Cen- tral Bank. g (2) Upon receiving an application under subsection (1) of this section, the Central Bank shall require the Chief Bank Ex- aminer appointed under section 21 of this Act to carry out a preliminary examination of the books and affairs of the Company. h (3) The Central Bank shall consider the report and application of the Chief Bank Examiner and make a recommendation to the Minister stating whether or not a licence should be granted and the conditions (if any) to be attached to the li- i cence. (4) If the Minister, notwithstanding the recommendation of the Central Bank, is of the opinion (a) that it would be undesirable in the public interest that a licence should be granted; or j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 69 a (b) that it would be desirable that a licence be granted, he shall make a report of the circumstances to the Na- tional Council of Ministers who may direct him to refuse or grant a licence as the case may require; and b where an application is refused the Minister need not give any reason for the refusal. (5) Where a licence is subject to conditions, the licensed bank shall comply with those conditions.” c Let us reproduce section 1 of the Act referred to by the learned prosecutor in his reply. “Section 1(1) No banking business shall be transacted in Nige- ria:– d (a) except by a Company duly incorporated in Ni- geria which is in possession of a valid licence granted by the Minister authorising it to do so; and e (b) unless before its incorporation in Nigeria the objects of the Company as set out in its Memo- randum of Association shall have been submitted to the Minister in writing through the Cen- tral Bank for his consideration, and the Minister f has approved accordingly. (2) The foregoing subsection (1) shall not apply:– (a) in relation to a bank (not being a Bank to which paragraph (b) of this subsection refers), which g was duly incorporated in Nigeria prior to the commencement of the Companies Act, 1968, and which holds a valid licence granted under the Act repealed by this Act; (b) in relation to a bank which was not, prior to the h commencement of the Companies Act, 1968 incorporated in Nigeria, and which at the commencement of this Act holds a valid license, if (i) the Nigerian branch or branches of the said i Bank shall, on or before 18th February, 1969 become incorporated in Nigeria under the Companies Act, 1968 for the purpose of transacting banking business; and (ii) the said bank had before that date applied j to the Minister through the Governor of the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 70 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Central Bank for a licence and such appli- a cation has not been rejected by the said Minister. (3) Any person who transacts banking business with- b out a valid licence contrary to subsection (1) of this section shall be guilty of an offence and liable to a fine of N100.” The prosecution counters that the license and certificate of incorporation, exhibits P1 and P2, are patently valid. The c prosecution thinks it was within the power of the Minister to issue the licence as he did. He thinks sections 2 and 1 should be read together and section 2 subject to section 1. Having so read them, subsection (1)(1)(b) as submitted by d the prosecution seems to anticipate submission of the Memorandum and Articles of a Company which is yet to be incorporated. The section uses the words, “before its incorporation”. e A dispassionate look at the provisions in sections 1 and 2 of the Banking Act seems to us to create a scenario where the Minister, in order to decide whether the party applying is worthy of a grant of a banking licence, has in his possession f only the Draft Memorandum and Articles of a proposed company. In particular, it is observed that, under section 2, all that is required of an applicant wishing to carry on banking business in Nigeria was to apply to the Minister in writ- g ing through the Central Bank. Nothing else was expected of the company which had already under section 1 sent the Minister the draft Memorandum and Articles. The Minister already so armed based his decision on what he had, when h the Central Bank which received the application, together with the documents in section 1(1)(a), (b) and (c) has made recommendations to him under section 2(3), following the Chief Banking Examiner’s preliminary examination of the books and affairs of the company. i Even in the face of the Central Bank recommendation, the Minister still has a discretion, under section 2(4), for, if he “is of the opinion” that a licence be or not be issued, he would make a report to the Council of Ministers. Then the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 71 a Council of Ministers “may direct” him to grant or refuse the licence. If the scenario enunciated above following sections 1 and 2 b of the Banking Act is gone along with, it becomes obvious that all things would be deemed to have been done which was required to have been done, before the licence was issued. c The provision of section 150(1) of the Evidence Act would come into play. It provides, “when any judicial or official act is shown to have been done in a matter substantially regular, it is presumed that formal requisites for its validity d were complied with”. It seems to us that a party who is complaining that due process has not been followed, as the defence does, has the onus to prove it, not by tendering or relying on the end re- e sult, but by evidence to show failure to follow due process. See Integrated Rubber Products Ltd v. Oviawe (1992) 5 N.W.L.R. (Part 243) 572. It is correct that this is based on the maxim: “Omnia praesumuntur rite esse acta”. It is the presumption of the regularity. Ejiwunmi, JCA, put it thus in f the above case, “Non-compliance with the Laws . . . will not be presumed, but if it exists, it is for the party complaining to plead and prove such non compliance”. See also Kenrow Nigeria Ltd v. Moss (1987) 4 N.W.L.R. g (Part 65) 362. We realise that the above are civil cases and that this is a criminal case where there are no pleadings. But, the requirement of proof does apply. The presumption of regularity is rebuttable, however. But h following another well-known rule of evidence, which is, “he who asserts must prove”, the defence has an onus on it. It has to prove non-compliance with the requirements in the Act, of which the licence is the end product. They have not i discharged that onus. The matter of the validity of the licence was never put in issue by the defence throughout the trial, no evidence, no cross-examination of prosecution witnesses on this issue. j Yet, it was a matter within the accused’s knowledge. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 72 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

On not only a purely practical but evidential point of view, a it is to be realised that the accused in his statement to the police, exhibit P38, stated that he was one of the promoters of the bank raising funds and holding regular meetings with b other promoters before it took off. He was even at the time, “managing director designate”. For, at the time Mr Dotun Duro Emmanuel, one of the promoters and later a director of Group Merchant Bank who approached him, had even asked him if he was “interested in becoming the managing c director of a new bank they were about to set up” (see exhibit P38). From the above, the accused joined with others to set up d the bank. He further said in exhibit P38, “before the bank obtained its operating licence . . . the issue of share capital came up. This was around April, 1990 . . .” In short, the accused was part of the initial arrangement e which included the raising of capital to meet Central Bank requirements, planning etc. The foregoing is set out to show that the information regarding compliance with the formalities of the licence is f something of which the accused was fully seized. The accused should tell, if the licence was illegal, what went wrong? By virtue of section 142 of the Evidence Act earlier set out g in this judgment, the burden of proving the facts were on him. This onus the accused has not discharged. After considering all the facts and all the authorities cited, we hold the view that the defence cannot succeed in its at- h tack on the validity of the licence of Group Merchant Bank Limited. The licence is presumed valid until the contrary is proved by the accused, the managing director of the bank who was instrumental in obtaining it. i The issue of collateral challenge:– This was raised by the defence to justify their challenge of the licence. We have carefully looked at the various authorities cited by both sides: Administrative Law (5ed) by Prof. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 73 a Wade at page 331; Pearson v. Broadbent (1870) 36 J.P. 485; Hinton Demolition Property (Pty) Ltd v. Lower (1971) S.A.S.R. 512 etc. b Because of our views on this issue of onus of proof, our opinion is that in the light of the antecedents and the facts of this matter, the accused cannot take advantage of this right of collateral challenge. Clearly that right as the authorities c show, including Wade (supra), is only available in certain circumstances and there are no hard and fast rules. A calm examination of this case shows that the accused is not one of the circumstances. d Legal consequences of the status of Group Merchant Bank under the Banking Act:– We have held that the licence is valid. The consequences which the defence proffers will only arise if the licence of e Group Merchant Bank Limited was found invalid. “The Status of M. Odebode in Group Merchant Bank Lim- ited”, and legal consequences of his status were other titles in the point of law raised by the defence. The defence re- f counted the grant of a licence to Group Merchant Bank, the incorporation of Group Merchant Bank Limited and the appointment of the accused as managing director of the bank on 29th August, 1990. The appointment of the accused as g director of Tauro Products Limited, which has taken effect on 7th December, 1985 (see exhibit P19) was mentioned, and also section 19(3)(a) of BOFID. That section provides that: “No Bank shall be managed by a person who is a director of any other Company not being a subsidiary of the h Bank.” Thereafter, the defence submitted that in the light of the foregoing, a person within the category of those barred by statute from managing a bank cannot enter into a binding i agreement to manage a bank. And, furthermore, that if such a person had entered into a binding contract to manage a bank, he becomes disqualified from the moment he becomes a director of “any company not being a subsidiary of the j bank”. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 74 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

In short, the defence is of the view that the contract of em- a ployment between the accused and Group Merchant Bank Limited is in breach of the statute and is void ab initio. This is so in view of the dates of his appointment in Group Mer- b chant Bank and in Tauro Products Limited and by virtue of some authorities under the Law of Contract. It was submitted in the alternative, that the contract of employment became void as soon as he was appointed in Red Star Express c Nigeria Limited, or Hyperion Finance and Investment Com- pany Limited, a matter of supervening illegality. The defence distinguished contracts which are void ab initio or contracts which are initially valid but subsequently d become void by reason of “supervening illegality”. Salmon and Williams on Contracts (2ed) pages 342–343, 360–361, paragraphs 121, 122 and 129, Craies on Statute Law (7ed) page 251 et seq. were cited. e The principles in the Law of Contract on the nature of void or illegal contracts or supervening illegality are not in doubt. What the legal authorities press upon parties to a contract and the courts is that no action could be maintained for f breach of an illegal contract. Another principle is that the courts will not enforce a contract which is expressly or impliedly prohibited by statute. It is indeed stated that such is the case whether the parties intended, in entering into such a g contract, to break the law or not. It would appear that the pith or kernel in the above principles is “enforceability” by the party to the contract. The question then is this, is the matter before this Court an h action for breach of contract? Or is it an action by one party to a contract to enforce a contract? Clearly the answer to both questions is in the negative. The matters before this Tribunal are criminal proceedings by the i STATE to probe a person who has been charged with the breaches of the provisions of a statute. The issue of the accused’s criminal liability is the subject of these proceedings, to be decided upon. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 75 a It was interesting reading Craies on Statute Law (supra) starting from Page 251 cited by the defence. It establishes the principles set out above, but not the prin- b ciples applicable in a case of contravention of the statute. What seems to dictate those general principles which states that contracts in breach of statute are unenforceable is some ethical consideration. To borrow the words of Dr. Washing- c ton in Philips v. Innes (1837) 4 C.1 and F.234 at 241. It is that:– “. . . it is impossible to compel one who is unwilling to disobey the law to contravene it. He is entitled to plead freedom from a contract into which he should never have entered, and to be protected d in maintaining an obedience to the law, which the law would itself have interposed to enforce, had the act come otherwise within its recognisance” (see note 53 page 251 of Craies on Statute Law).” It cannot be said in the present case that the accused is a per- e son who is being compelled against his will to disobey the law to contravene the statute by keeping to the terms of his contract with Group Merchant Bank Limited. It cannot be said that he is now pleading freedom from a contract into f which he should never have entered (when indeed he was the party seized with all the facts before the contract). Nor can it be said that he needs to be protected in maintaining obedience to the law. g The matter is entirely different here. The accused had been the architect of all that took place, in relation to his directorship of Tauro Products Limited, Red Star Express Nigeria Limited, Hyperion Finance Limited h and Group Merchant Bank Limited whose directorship he enjoyed at the same time. The matter relating to Tauro, Red Star and Hyperion were within his exclusive personal control. If anything, he brought about the situation where, from the beginning to the end, he enjoyed the benefit of all of his i actions in relation to all the companies. He was in the system that set up Group Merchant Bank Limited. There is abundant evidence of the benefits he enjoyed in Group Mer- chant Bank Limited from the day he became the managing j director in August, 1990 till the end of his tenure in March, [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 76 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

1994 when the bank had collapsed. They include salaries, a allowances, housing and other loans etc. Indeed, within this term, the accused utilised such benefits from the bank to build a personal house into which he moved and for which b the Group Merchant Bank Limited was paying him over N.9 million as rent. The benefits of the accused as managing director was reviewed upwards by the board after he assumed office (see exhibit P10). c The accused clearly does not fit into the class of cases which deal with enforcement of contracts. As part of the conclusion which the defence urges on the Tribunal in respect of this part of its submission, it is ob- d served that in one breath it was submitted that exhibit P6 is null and void because it predated the incorporation of Group Merchant Bank Limited. In another breath, it was conceded that the board resolution of 29th August, 1990 effectively e brought into being a contract of employment between the Group Merchant Bank Limited and the accused (see exhibit P10, minutes of the board meeting of 29th August, 1990). That by itself leaves the contract in tact. f The prosecution’s view on this to the effect that the offer of employment could be a parol contract is also tenable. It seems necessary to mention here, however, that what is being questioned by the statute in the charge before the g Tribunal is some “illegality” believed to have been committed by the accused. There is no issue of enforcement of contract. The further issues raised and authorities cited by the de- h fence arise or apply, as the case may be, only if this Tribunal has been persuaded that the contract of employment was void. One such issue is whether Odebode was employed as manager or other officer of Group Merchant Bank Limited. The authorities include Pickering v. Ilfracombe Railway i (1886) L.R.C.P. 235 at 250 and Chitty on Contract (26ed) paragraph 1285 dealing with severance of contracts. In view of the decision we have earlier reached, the Tribu- nal has not been so persuaded. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 77 a The foregoing notwithstanding, the issue calls for some further consideration. The learned Senior Advocate for the defence, Chief F.R.A. b Williams, has placed much emphasis on an aspect of it, citing authorities. That aspect formed a subtitle in the written submission. It was as follows: “Was Mr Odebode a de facto director or manager of Group Merchant Bank Lim- c ited.” It has not been established that there was any defect in the appointment of the accused as director or managing director and this Tribunal has not found that there was any such de- d fect. The interesting and persuasive case of Onwuka v. Tay- mani (1965) N.C.L.R. 203 at 216, also reported in (1965) L.L.R. 62 at 72 and Morris v. Kanssen (1946) A.C. 459, or (1946) 1 All E.R. 586 on which Alexander, J (of the Lagos e High Court as he then was) relied, ought to be considered, had the Tribunal found, as the courts in those two cases did, that the appointment of the director was invalid. For example, in the Onwuka case, the court held that there was no proof of appointment (see at 72 paragraph 3 of 1965 L.L.R). f In the present case, the accused was duly appointed by the board of the bank. It is in the light of the foregoing that the Tribunal has care- g fully considered the cases such as Dean v Hiesler (1942) 2 All E.R. 340 (in which also the subject was not appointment of director at a duly convened meeting to the board), and R. v. Drysdale (1978) 1 N.S.W.L.R. 704 which followed Dean v. Hiesler (supra). We came to the conclusion that these h cases, which are of persuasive effect to this Tribunal, might have been applied had there been a finding that the facts of this case are the same as or similar to the facts in those cases. i It seems to us that to complete the comments on the point of law raised by the defence and the reply of the prosecution, it is necessary to point out something about the case of Skinner v. Carter (1948) 1 Ch.D. 387 cited by the prosecu- j tion. It has its own peculiar facts upon which the Court of [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 78 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Appeal based its finding. In particular, there was the interest a of the child which the law regards as paramount. Thus, when Carter tried to escape liability for the maintenance of the adopted child, on the ground of his void marriage due to b bigamy, the Court of Appeal took this into account. That court decided that Carter, who might have been guilty of bigamy (and he was the one who raised this at the hearing), was not entitled to rely on his own wrong to escape liability to the child. c Therefore, although the gist of the decision supports the case of the prosecution herein, we found it necessary to draw the attention to the distinction between that case and the present one. Again the authority is persuasive if the peculiar d facts fit into the present one. They differ however in the way earlier pointed out. We, however, think one would be on firm grounds in the similarity found in the Carter case and the present, namely e that the accused cannot rely on a self-induced illegality to escape liability for the wrongs which he had committed. Having held also that the licence is valid, we have also come to the decisions that the accused was duly appointed f and duly held the office of managing director of Group Mer- chant Bank Limited from its inception until its collapse. In the light of that decision, we are proceeding to examine each count of the charge seriatim. This is to see that the nec- g essary ingredients were established and in the light of the further submissions made by the defence to ensure that the principles of proof beyond reasonable doubt entrenched in our laws have been complied with. h Count 1: This count is said to be an offence contrary to section 18(1)(a) of the Banks and Other Financial Institu- tions Decree No. 25 of 1991 and punishable under section 18(2) of the same Decree. i Section 18(1)(a) provides as follows:– “No Manager or any other officer of a bank shall:– (a) In any manner whatsoever, whether directly or indirectly have personal interest in any advance, loan, or credit j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 79 a facility, and if he has any such personal interest he shall declare the nature of his interest to the Bank.” Section 18(2) provides as follows:– b “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 conviction to a fine of N100,000 or imprisonment for a term of 3 years; and in addition, any gains or benefits accruing to any person convicted under this c section by reason of such contravention shall be forfeited to the Federal Government, and the gains or benefit shall vest accordingly in that government.” In proof of this count the prosecution led evidence to show d that Group Merchant Bank Limited, a limited liability company was licensed to carry on banking business. PW1 tendered the certificate of incorporation of Group Merchant Bank Limited. e Exhibit P2, the licence of the bank, which is exhibit P1, the Memorandum and Articles of Association of the bank which is exhibit P3. PW1 gave evidence that the accused person was a manager or an officer of the bank in that he was a f director of Group Merchant Bank Limited and was also the managing director of the bank. Exhibit P4 is the particulars of directors of Group Mer- chant Bank Limited which contains the name of the accused g as one of the directors. Exhibit P6 is the contract of employment of the accused person with Group Merchant Bank Limited and exhibit P7 is the Central Bank of Nigeria Code of Conduct for directors of Licensed Banks. h Exhibit P10, the minutes of the board shows that the board later appointed the accused as the managing director. Evidence was led to show that the accused had personal interest in the advance, loan and credit facilities made to Red i Star Express Limited. The prosecution gave evidence that the accused had an interest in Red Star Limited, incorporated on 10th July, 1992 (see exhibit P12) and which applied by exhibit P11 to open an account with the bank by an ap- j plication dated 11th August, 1992, exhibit P11. Evidence [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 80 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. was led to show that the accused was a director of Red Star a Express Nigeria Limited with effect from 4th December, 1992. Return of Allotment of Shares Form CO2 of Red Star Express Nigeria Limited, covering the period 2nd Septem- b ber, 1992 to 25th August, 1994 (exhibit P15) shows that the accused, a shareholder of Red Star Express, holds 1,050,000 out of 7 million shares of N1 each of that company and that his holding in the company was about 15% of the total shares. He is the second largest shareholder. c Exhibit P43 is a bundle of documents containing various written requests for advance and debit advices evidencing transactions between Red Star Express Limited and Group Merchant Bank Limited from 28th August, 1992 to 8th May, d 1993. These documents show that a sum of N19,990,376.06 had constituted the total credit facility or advance made to this company. Exhibit P44 is the statement of account of Red Star Express Nigeria Limited from 31st August, 1992 to e 31st October, 1995, a statement portraying various transactions including withdrawals made by the company from its account in Group Merchant Bank Limited. Exhibits P43 and P44 were tendered by PW4. Exhibit P43 f is an 83-page document, containing letters of request and credit advice and correspondences, various memos of Red Star Express Nigeria Limited showing that the accused is listed as a director in various letters from Red Star Express Nigeria Limited. At page 43 of exhibit P43 the name of the g accused appears as director and also on page 72 where the accused had approved a sum of N480,000 for the company. This witness gave evidence that, after looking through all the documents relating to the dealings with Red Star Express h Nigeria, it was not shown anywhere that the accused disclosed to the bank that he, the accused had any relationship with that company. The attention of the Tribunal was drawn by the witness to the minutes of the board of directors of i Group Merchant Bank Limited of 29th August, 1990 to 8th March, 1994, exhibit P10, to show that the accused did not at any time declare his interest to the bank in the company or in the loans or credit facility to Red Star Express Nigeria Limited. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 81 a Exhibit P10 are the minutes of the period during which the accused was the managing director of the bank. Andrew Egbakhumeh, PW1, who described himself as acting b company secretary of the bank testified that the accused did not at any time declare his interest in the facilities at any meeting of the bank. In his statement to the police, exhibit P38, the accused per- c son admitted that he granted the facilities to the company and was making an effort to pay. PW1 gave evidence that the accused did not only not declare his interest but also that the accused did not comply with laid-down procedures for granting advances or loans or credit facilities. d In his submission to this Tribunal in respect of count 1, learned prosecution Counsel listed what he considered the necessary ingredients of the offence. e After referring to the documentary and oral evidence given in proof of the above essential ingredients, learned prosecuting Counsel submitted that with the uncontradicted evidence of prosecution witnesses in respect of this count, the count has been proved as charged. f He concluded that the mere fact that the accused was a director of Red Star Express Nigeria Limited was proof that he had an interest, albeit indirect, through his directorship of the company in the advance he granted to Red Star Express g between 28th March, 1992 and 11th May, 1993. He urged the Tribunal to return a verdict of guilty on this count. The defence led no evidence. h Of the witnesses who gave evidence pertaining to this count, it was only PW1 who was cross-examined by the learned Senior Advocate for the accused, Chief F.R.A. Wil- liams. An important question which arose in cross- i examination was about Group Merchant Bank’s register of directors which would contain the particulars of directors of the bank. As to whether the particulars include particulars of other directorships held by each director of Group Merchant j Bank in other companies, the witness said he could not [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 82 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. remember off-hand unless he consulted the register. In re- a examination, however, this witness, when shown exhibit P4, particulars of the Group Merchant Bank Limited, then pointed out that against the name of the directors in the col- b umn for particulars of any other directorship, no particulars were given in respect of any of the directors of Group Mer- chant Bank therein listed. The accused was listed as director of Group Merchant Bank Limited in the exhibit. c All the evidence given by the prosecution witness was thus uncontradicted by the defence. In his submission in respect of this count Chief F.R.A. Williams set out what the defence considered must be al- d leged and proved by the prosecution:– (a) That the accused was “a manager or other officer of the bank” who made some “advance, loan or credit facilities” available to a customer, borrower or other e person. (b) That he directly or indirectly had a personal interest in the advance, loan or credit facility which he failed to declare to the bank. f The defence found two defects in the charge in this count, first that, if properly framed, the charge must indicate whether the accused did the acts or omissions alleged, “as a manager or as an officer” which is what the relevant statute g requires. Secondly, that the count discloses no offence known in law in that it did not charge the accused of having a “personal interest”, nor indicated if the alleged interest was direct or indirect. h There is a third point raised by the defence which I will list with the two above. It is that there is no evidence to show any personal interest of the accused in Red Star Express Ni- geria Limited. i In his view, the accused could not, in any event, be convicted on this count as laid. It is to be observed that, later in its submission, the defence conceded in respect of the first defect that it was not fatal to j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 83 a the charge in view of the definition in section 650 of the Companies and Allied Matters Act. The definition of the word “officer” in respect given to a b body corporate is defined in section 650 to include, “a director, manager or secretary”. The charge that the accused is managing director and the evidence led by the prosecution that the accused is a director of the bank, appointed by the c board as managing director (see exhibit P10) suffice to answer this objection. The learned defence Counsel was quite right in abandoning that objection. As to the second defect which the defence regarded as fa- d tal, the Tribunal considered the charge, the contents of section 18(1)(a) of BOFID under which the charge was laid, the uncontroverted evidence led by the prosecution and those relevant sections 150–161 of the Criminal Procedure Act, Cap 80 Laws of the Federation of Nigeria, 1990 and particu- e larly section 151 subsections (1)–(4), 152, 154 which provide for the form of the charge and particulars. These later sections are hereby set out:– f Section 151(1): “Every charge shall state the offence with the accused is charged and if the written law creating the offence gives it any specific name the offence may be described in the charge by that name only. g (2) If the written law which created the offence does not give it any specific name so much of the definition of the offence must be stated as to give the accused notice of the matter with which he is charged. h (3) The written law and the section of the written law against which the offence is said to have been committed shall be set out in the charge. (4) The fact that a charge is made is equivalent to i a statement that every legal condition required by law to constitute the offence charged was fulfilled in the particular case.” Section 152(1): “The charge shall contain such particulars as to the time and place of the offence and the j person, if any against whom or the thing, if [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 84 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

any, in respect of which it was committed as a are reasonably sufficient to give the accused notice of the matter with which he is charged. (2) Where the accused is charged with criminal breach of trust, fraudulent appropriation of b property, fraudulent falsification of accounts or fraudulent conversion it shall be sufficient to specify the gross sum in respect of which the offence is alleged to have been committed c without specifying particular items or exact dates and the charge so framed shall be deemed to be a charge of one offence within the meaning of section 156. (3) The particulars of the charge shall describe d the offence shortly in ordinary language avoiding as far as possible the use of technical terms. (4) Where the nature of the offence is such that e the particulars required by section 151 and subsections (1) to (3) of this section do not give the accused sufficient notice of the matter with which he is charged, the charge shall also contain such particulars of the manner in f which the offence was committed as will be sufficient for that purpose.” Section 154(5)(a): “Where a written law constituting an offence states the offence to be the omission to do any one of any different acts in the alternative, or g the doing or the omission to do any act in any one of any different capacities or with any one intentions, or states any part of the offence in the alternative, the acts, omission, capacities, or intentions, or other matters h stated in the alternative in the written law, may be stated in the alternative in the charge. (b) It shall not be necessary in any charge where the offence is one constituted by a written law i to negative any exception or exemption from or qualification to the operation of the written law creating the offence. (8) Subject to any other provisions of the Ordi- nance, it shall be sufficient to describe any j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 85 a place, time, thing, matter, act, or omission whatsoever to which it is necessary to refer in any charge in ordinary language in such a manner as to indicate with reasonable clear- b ness the place, time, thing, matter, act, or omission referred to.” Also section 165 states as follows:– “No error in stating the offence or the particulars required to be c stated in the charge and no omission to state the offence or those particulars shall be regarded at any stage of the case as material unless the accused was in fact misled by such error or omission” (italics mine). d Upon a careful consideration of the provisions of the Crimi- nal Procedure Act, and in particular the above sections, we came to the conclusion that it is not provided anywhere that every word in the statute pursuant to which the charge is e brought must be set out in the charge or its particulars. By virtue of sections 151(2), 152(4), 154(8) and 166, the concern of the law is to ensure that the accused has notice of the case with which he is meeting and that he is not misled by the form of the charge. f By virtue of section 151(3), the written law and the section thereof against which the offence is said to have been committed, if it is enacted, shall be set out. It would seem to us g therefore that once a charge and its particulars are framed in such a language that the accused knows the case he is about to meet, and the sections of the statute against which the offence is said to be committed are set out, a court of justice will be slow in regarding an error as fatal to the charge, h unless it can be shown that the accused was in fact misled or that the charge is at variance with the evidence. One exception to this would be where there is an omission in respect of some specific particulars, such as intent, time, person, or i place etc., which are of the essence of the offence. In Faro v. Inspector General of Police (1964) 1 All N.L.R. 6, it was held that it is sufficient in a charge of obtaining by false pretences if the substance of the false pretence alleged j is clearly conveyed. We would with respect adopt this view. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 86 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

It is not the case of the defence in this matter that the omis- a sion of the word “personal” in the charge has misled the accused. See also section 166 of Criminal Procedure Act (supra). b The above sections of the Criminal Procedure Act were read by us alongside with the quotation from paragraph 320, page 103 of Brett and Mclean on the Criminal Law and Pro- cedure of the Six Southern States of Nigeria (2ed) cited by c the defence and the submission made with it. It was not shown to the Tribunal what is there in that quotation to compare with the omission complained of in count 1, that would make the Tribunal hold that the count is bad in law. d If anything, the principles and decisions in the passage point to specific offences whose peculiar ingredients require that the charge be framed in a particular way, e.g. in a charge of obtaining by false pretences of existing facts is of the essence of the offence. e In the charge on count 1, the accused is alleged to be “In- terested in advances and loans granted . . . to Red Star Ex- press Nigeria Limited a Company in which you have an interest as a director and you failed to declare the nature of f your interest . . . contrary to section 18(1)(a) of BOFID . . .”. I do not think that the omission of the words complained of is fatal to the charge, in the light of the foregoing. g I would adopt with utmost respect the views of the Su- preme Court in Ogbomor v. State (1985) 1 N.W.L.R. (Part 2) 223 where it was held that as long as the offence charged discloses an offence in a written law and the law is in existence at the time of the charge, the information is valid. The h illuminating words are of Oputa JSC at 242 where he said:– “The emphasis is not, on whether there were defects or errors or omissions in the charge, but on whether or not those defects, . . . could and did in fact mislead the defence.” i See also Ogbodu v. The State (1987) 2 N.W.L.R. (Part 54) 20. In the same spirit as their Lordships of the Supreme Court in the above cases, is the provision of section 24(8) of the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 87 a Failed Banks . . . Decree (Amended by Decree No. 18 of 1995) which provides among other things that “non- compliance with any rule of procedure shall not invalidate b any judgment or other proceedings of the Tribunal unless a substantial miscarriage of justice can be shown . . .” I should think that if the accused was found misled, there would be substantial miscarriage of justice if a defective charge was proceeded with. That is not the case herein. The charge is c not defective. Section 18(1)(a) reproduced in this judgment under which the accused is charged clearly states the law. The accused, represented by eminent Counsel, could not have been misled d by the charge as laid and there is no suggestion in the submission that he was. The defence also submitted that there was no iota of evidence to establish “personal interest”. This is more serious; e in view of one of the exceptions which I stated above, with respect to a charge which is at variance with the evidence. If at variance, the law is that the charge will fail. The evidence before the Tribunal in respect of the relation- f ship between the accused and the company Red Star Express Nigeria Limited were as follows:– The accused, the managing director of Group Merchant Bank Limited from its inception in August, 1990 till it virtu- g ally failed in 1994, was as shown in the certified true copy of Form CO7, Particulars of directors of the Company (exhibit P14 filed on 15th February, 1993 at the Corporate Affairs Commission) to be a director of Red Star Express h Limited. His appointment was shown in exhibit P14 to have been ratified by a board resolution dated 11th August, 1992 ratified by special resolution of the company at the extraordinary general meeting held on 4th December, 1992. It has been observed that a Form CO7 of Red Star Express i tendered as exhibit P13 bearing the date 13th June, 1992 was delivered to Group Merchant Bank Limited together with the application for the opening of an account (exhibit P11) the Certificate of Incorporation (exhibit P12) on which the j accused endorsed in his own writing and appended his [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 88 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. signature, that he had sighted the original on 26th August, a 1992. A close examination of that Form CO7, exhibit P13, delivered to the bank shows that at the time it was given to the bank, it was not a certified true copy from the Corporate b Affairs Commission. It does not bear the name of the accused as a director as stated by PW1 in his evidence-in- chief. According to this witness, when they at Group Merchant c Bank conducted a search at the Corporate Affairs Commis- sion that exhibit P14 which bears the name of the accused as director was found. Exhibit P15, is Company Form CO2, Return of Allotment d in respect of Red Star Express, shown to cover the period 2nd September, 1992 to 25th August, 1994 and dated 22nd September, 1994 was tendered in evidence through PW1 who testified that, according to exhibit P15, the accused held e 1,050,000 shares of N1 each of Red Star Express. Exhibit P35, the Report of a Special Investigation constituted by the Central Bank of Nigeria (C.B.N.) jointly with the Nigeria Deposit Insurance Corporation (N.D.I.C.) ten- f dered by the prosecution through PW2 showed that the accused had approved facilities with an outstanding balance of N28.5m to Red Star Express (see .3 of exhibit P35). That exhibit also stated that Mr Oladisun Odebode who was the then managing director of the bank is a co-owner of the cou- g rier outfit named Red Star Express. It was also shown in this exhibit that no security was obtained by the bank for the facility (see Table 1 of exhibit P35). It was pointed out by the prosecution that the accused is h the second largest shareholder in Red Star Express and held 15% of the shares (see exhibit P15). PW3, the Superinten- dent of Police who investigated this case, in his evidence confirmed writing some of the findings in respect of Red i Star Express in the course of his investigation. PW4, the present executive chairman of Group Merchant Bank Limited, Mallam Tijiani Mohammed, in his evidence tendered exhibits P43 and P44, two bundles of documents of j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 89 a 83 pages and 41 pages respectively, all written requests, debit advices, statement of account, written requests etc relating to Red Star Express. Page 72 of exhibit P43 was b brought to the attention of the Tribunal, to show that the accused, while director of Red Star was approving payment to Hyperion Finance and Investment Company Limited. We have, however, observed that the sum requested for Hype- rion Investment therein was not approved. c The accused admits being director of Red Star in his statement, exhibit P38. All these belie the denials by the chairman and the managing director of Red Star Express in d their letter of 31st July, 1995 (exhibit P41). It is important to note as follows: At pages 64 and 65 of exhibit P43 are debit advice and request for N487,400 paid by Group Merchant Bank Limited on behalf of Red Star Express to Hyperion e Finance and Investment Company Limited. Also page 10 of exhibit P44, payment of N200,000 was recorded made also to Hyperion Finance and Investment Limited by Group Merchant Bank Limited for Red Star Express Nigeria Lim- ited on 3rd May, 1993. Hyperion Finance, which is not a f customer of Group Merchant Bank Limited according to evidence led at this Tribunal by prosecution witness (see evidence of PW4) is a company wholly owned by the accused who had 80% shares and his wife with 20% shares be- g ing the only directors and shareholders (see exhibit P24, Par- ticulars of directors and exhibit P117, Return of Allotment dated 10th December, 1991 of Hyperion Finance). In exhibit P102 page 5, the accused admits this. h A look through exhibit P43, the written requests from Red Star Express to Group Merchant Bank Limited and the debit advice from Red Star Express, show that the company’s set- up capital, such as stamp duty to Government and other op- i erating expenses by way of cash and bills settlement from August, 1992, virtually from day to day, were paid out at its request and borne by Group Merchant Bank Limited, which debited the company’s account. For example, requests were j made and paid on 27th August, 1992 (pages 2/3), 27th [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 90 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

August, 1992 (pages 5/6), 28th August, 1992 (pages 3/4), a 31st August, 1992 (pages 7/8), 31st August, 1992 (pages 9/10) etc. The debit mounted from day to day as Group Merchant Bank Limited paid as aforesaid. Between August, b 1992 and October 2, the debit had mounted to N5,207,852.32 (see pages 26, 29 of exhibit P43). For example, large cash withdrawals were also approved by the accused and to the chief accountant of Red Star Express, sometimes up to N.5m and huge bills settled while the debit c mounted and credit was minimal (see pages 36–45 etc.) and also exhibit P44). By 4th November, 1992 the debit was N10,292,312,59. Several of the letters of request had written instructions by the accused that they be urgently treated. d This was done by the accused, who approved all the payments in exhibit P43. PW4 gave evidence, identifying accused’s signature and writing. By 25th March, 1993, the debit was N15,870,743.96 (see page 80 of exhibit P43 and e page 8 of exhibit P44). By 8th February, 1994, the debit was N32,259,564.40. In the light of the above and other facts which were uncontroverted before the Tribunal, I find that Red Star Express is f not wholly owned by the accused but he had personal and other interests. The personal interest of the accused in the company has clearly been shown. In my view, when the corporate veil of Red Star Express as well as that of Hype- g rion Investments Company Limited is lifted in exercise of powers conferred on the Tribunal by section 3(3)(b) of the Failed Banks . . . Decree, the accused is one of those persons found therein as an individual who stands personally to h benefit by any financial benefit accruing to the two companies by virtue of their shareholding. In the case of Red Star Express the accused is a director with 15% shares. In the case of Hyperion a director and shareholder of 80% and i the wife of the accused a director with 20% shares. Hyperion Finance and Investment Company Limited got N487,400 and N200,000 as earlier shown from Red Star Express Nige- ria Limited from funds paid out by Group Merchant Bank Limited. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 91 a In the Failed Banks . . . Decree “director” is interpreted to include, “a wife, husband, wife, father, mother, son or daughter of the director”. b The definition of the word “interest” from Earl Jowitt’s Dictionary of English Law page 995 cited by the prosecution is helpful in establishing what personal interest or the interest of a person in an object means. c It states:– “A person is said to have an interest in a thing when he had rights, advantages, duties, liabilities, losses or the like connected with it, whether present or future ascertained or potential provided that the d connection and in the case of potential rights . . . the possibility is not too remote . . .” We should think that the interest of a director and shareholder in financial or other benefits accruing to his e company is personal in the first instance, and, not remote. This is so with accused’s interest in Red Star Express Lim- ited and Hyperion Finance and Investment Limited. When the learned defence Counsel submitted that there f was no direct evidence of personal interest or that the way to prove personal interest is by bringing forth evidence showing that the moneys were received by the accused or a portion of it, he might not have been aware of the facts set out g above about payment to Hyperion Finance and Investment Company Limited from Group Merchant Bank Limited’s funds at the request of Red Star Express Limited. He might also not have adverted his mind to the obvious fact that a h person being an individual who is a shareholder in a company cannot escape the inference that any financial or other benefit accruing to his company accrues to him personally, in proportion to his interest in the company. For example, if this financial benefit to his company is misused, is i it not done to his personal interest that he has a right to question the company? We find as a fact that the loans and advances and facilities granted to Red Star Express Nigeria Limited accrue to the personal and contingent benefit of the j accused. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 92 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

On the issue of failure to disclose interest of which the ac- a cused is charged, and the submission of the defence that the evidence showed only failure to declare to the bank, the Tri- bunal listened to the evidence of the prosecution witnesses, b and looked at the various exhibits tendered by the witnesses. It is true that the prosecution led evidence to show that the accused did not disclose his interest to the directors. This was by the oral evidence of particularly PW1, the acting secretary to the bank and PW4, the executive chairman of c the bank. Exhibit P3 is the Memorandum and Articles of Association of Group Merchant Bank Limited. By articles 119–125, set- d ting out the powers and duties of the directors, the directors have powers to manage the affairs of the company, to exercise the powers of the company, to borrow or raise moneys etc, to make, draw, negotiate promissory notes, cheques etc., e to lend or invest the company’s moneys. By article 127, a director who is in any way, whether directly or indirectly interested in any contract with the bank, shall disclose that interest at a meeting of the directors pursuant to section 190 of the then Companies Act, 1968 and, “a general notice that f a director is a member of a specified firm or company and is to be regarded as interested in all transactions with that firm or company . . .” is all that is required. g In view of these powers in the Articles of Association of the bank conferred on the board of directors, it is the view of this Tribunal that the starting point for the disclosure required to be made, whether under section 18(1)(a) or 18(3) of BOFID is the board of directors which manages the af- h fairs of the bank and exercises powers relating to borrowing, lending investment etc. Secondly, by virtue of section 190 of the Companies Act, i 1968, then applicable when the bank was incorporated in August, 1990 and section 277 of the Companies and Allied Matters Act, 1990 which began to apply from 31st Decem- ber, 1990, every director has an obligation to disclose at a meeting of the directors of the company, if he is in any way j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 93 a interested in a contract or proposed contract with the company, i.e. the bank in this case. Again the starting point for a declaration to the company or the bank, in this case, is b the board meeting of the directors. Thirdly, and this is the most important there is, section 63(1) of the Companies and Allied Matters Decree (CAMD), which provides that a company shall act through c its members in general meeting or its board of directors, appointed by, or under authority derived from the members in general meeting or the board of directors. There is also section 63(2) and 63(3) which state as follows:– “(2) Subject to the provisions of this Decree, the respective d powers of the members in general meeting and the board of directors shall be determined by the Company’s articles. (3) Except as otherwise provided in the Company’s articles, the business of the Company shall be managed by the Board of e directors who may exercise all such powers of the Company as are not by this Act or the articles required to be exercised by the members in general meeting.” Section 63 also, together with the Articles, and the other sec- f tions earlier mentioned above show that even if the disclosure is to be made to the company in general meeting, where, as in the case of this bank, the powers of the company is vested in the board of directors, a disclosure to the board would be deemed sufficient and would satisfy the g requirement. Above all, if there was disclosure by a director to the company in general meeting, the register of directors, statutorily kept by the bank pursuant to the Companies Act, 1968 h or the CAMD 1990, would contain the information. PW4 testified that he found no document showing that the accused had disclosed his interest in any company, whether Red Star Express Limited, Tauro Product Nigeria Limited or i Hyperion Finance and Investment Company. Exhibits P120 and P121 were tendered. They are the Register of directors’ interests and Register of directors and Secretaries respectively. Exhibit P121 contains a column to show the business j occupation and other directorships of the directors of the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 94 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. bank pursuant to sections 191(2)(a) and 292(1) and (2) of a the Companies Act, 1968. There is no information in exhibit P121 regarding any other directorships held by the directors of Group Merchant Bank Limited, including the accused. b Also exhibit P4, the Particulars of directors, Form CO7, is another document in which, by law, particulars of other directorships, if any, are meant to be declared in respect of each of the bank’s directors. c There are no such particulars in respect of Group Merchant Bank Limited’s directors, including the accused. The obvious conclusion is that, if there was such a disclosure to the bank, these records, exhibits P121 and P4, kept d by the company of which the accused is a director, managing director and shareholder, would have contained the particulars of Red Star Express Limited, Tauro Products Limited and Hyperion Finance and Investment Limited. This e would have preceded and formed the basis for the disclosure of the personal interest of the accused in advances, loans, credit facilities etc. made to these companies. There is evidence from exhibit P10, the minutes of the f board of Group Merchant Bank Limited, that some board members kept on asking the managing director for a breakdown to be given to the board members about loans granted to various companies and commercial papers including those g to companies in which directors had interest. Red Star Ex- press was never mentioned, even when some directors named their companies (see pages 55 and 117 of exhibit P10, for example). h In view of the above facts, after the perusal of the various documents tendered, and considering the evidence given by prosecution witnesses, there can be no doubt that the prosecution produced sufficient evidence to show that the i accused did not disclose either to the directors or to the company his interest in Red Star Express Limited or interest in the loans, advances or credit facilities to Red Star Express Nigeria Limited or Hyperion Finance and Investment Com- pany Limited. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 95 a As to the issue regarding the learned Senior Advocate’s submission about illegality of the accused’s contract of service, as it affects count 1, it has already been dealt with b elsewhere in this judgment not to uphold the submission. The conclusion the Tribunal reaches in respect of count 1 is that the offence has been proved. The accused is found guilty as charged. c Count 2: The charge has been set out above as well as the summary of evidence, and the submissions of learned Coun- sel for both parties. This count alleges the grant by the accused of unsecured loans to Red Star Express Nigeria Lim- d ited in contravention of the bank’s rules and regulations, thus contravening section 18(1)(b) of BOFID which provides as follows:– “18(1) No Manager or any other Officer of Bank shall:– e (b) grant any advance, loan or credit facility to any person, unless it is authorised in accordance with the rules and regulations of the Bank; and where adequate security is required by such rules and regulations, such security shall, prior to the grant, f be obtained for the advance, loan or credit facility and shall be deposited with the Bank.” Although the accused pleaded not guilty, the facts given in evidence were not controverted by the defence. There was g no denying it that the accused granted unsecured advances and credit facilities to Red Star Express at the time alleged. At page 13 of exhibit P102, a letter addressed to Group Merchant Bank Limited by the accused dated October 27, h 1994, the accused, in commenting on the debit of N32,834,934 on the account of Red Star Express stated that he believed that the grant was intra vires by reason of his terms of employment. The relevant part of the terms of employment referred to is set out at page 7 of exhibit P102 as i clause (h) of his contract of employment, tendered as exhibit P6 at the trial, It is really clause 5(h). It states that the managing director was:– “. . . not to exceed his personal lending limit of N4,000,000 . . . or j such other maximum sum as may be set by the Bank or the Bank’s [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 96 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Board of directors from time to time . . . without the express ap- a proval of the Bank or Bank’s Board of directors but without prejudice to sums advanced or pledged by way of commercial paper, bankers Acceptances, Bonds, Indemnity, guarantees, Interbank Trading and Loans collaterised by cash deposit or Share Capital b Certificates of Companies quoted on the Stock Exchange or deposit of negotiable instruments such as Treasury Bills.” It appears that the accused misapplied the proviso to the powers given him by clause 5(h) above with regard to “sums c advanced or pledged by way of commercial paper, Banks Acceptance, Bonds, Indemnity guarantees, Interbank Trad- ing and loans collaterised by cash deposits or Share Capital Certificates . . .”. He took it that he could grant such latter d advances for any sum and at will and even without collateral. But it can be seen that those forms of lending or advances must be “collaterised” in one of three ways, by cash deposits or share certificates of companies quoted on the e stock exchange or deposit of negotiable instruments such as Treasury Bills. In the light of this, the accused had no power to lend the sum charged beyond his lending limit and without any col- f lateral whatsoever. In the statement of the accused to the police, exhibit P38, the accused commented on Red Star Express. He said, among other things, that “relevant papers were submitted by g Red Star Express for the processing of the facility (of N6.5m which he stated they applied for) which had not been completed at the time he left the Bank in March, 1994”. This story and some others in the statement, exhibits P38 h and P102, about Red Star Express, the Tribunal found itself unable to accept as true. The reason is that there is a handwritten instruction by the accused on a letter of request dated 27th August, 1992 from this company for payments in the total sum of N1,475,130.63. The accused requested “Kerry” i to get the cheques requested issued stating, “This is a newly opened account. We are processing the facility. Please issue cheques as requested”. He marked it “urgent” and the date was 28th August, 1992 (see exhibit P43 page 2). j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 97 a The payments were duly made as shown at page 1 of exhibit P43 and in exhibit P44. Thereafter it was one request after another from the same b company virtually to meet its day-to-day liabilities and expenses. Sometimes two letters of request came on the same day. The accused approved, often wrote “urgent” on them and payments were made, as shown in exhibits P43 and P44. c Exhibit P43 shows that between 27th August, 1992 and 2nd October, 1992 the company had a debit of N5,207,850.32 without any lodgement into the account as shown in exhibit P44. Lodgement into the account which were indeed far and d between only started around 12th November, 1992 and as at 30th November, 1992 the account had N11,692,154.14 debit. By March, 1994 when the accused was relieved of his duties, the account stood at N32,834,933.90 debit. e As exhibit P10, minutes of the board meetings of Group Merchant Bank Limited from August, 1990 to March, 1994 show, there never was any mention of Red Star Express at any meeting of the board. This point has been brought out while dealing with count 1. f How was it in the light of the above that the facility was “being processed” from August, 1992 to March, 1994? On the accused’s own admission at page 5 of exhibit P38, as at g June, 1994 the outstanding balance on the account of Red Star Express was approximately N32m. The Tribunal observed, looking through exhibit P43, the following: Letters of request for the various payments made h to and for Red Star Express by Group Merchant Bank Lim- ited, as approved by the accused between 27th August, 1992 and May, 1993; the frequency, urgency, and the huge sums that went out to various companies and persons including Hyperion Finance and Investment Limited, a company i wholly owned by the accused, and the sparse lodgements in the Red Star account; the acceptance by the accused of Form CO7, Particulars of directors of Red Star (not certified by the Registrar of Companies) it was accused who sighted the j documents at the opening of the account of that company [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 98 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. and which did not show that accused was a director (see ex- a hibits P12 and P13). There was no collateral for these facilities etc. The clear impression was that the accused knew what he b was doing with this company in which he had interest as director and shareholder. Apart from the factual aspect of the defence, the major thrust of the accused’s defence is on points of law. It was c submitted for the accused in respect of this count that an essential element in the charge is that the advances or facilities must have been caused to be made by the accused in contravention of the rules and regulations of the Bank. It was the d case of the defence that there was no evidence that exhibit P9, the Group Merchant Bank Credit policy manual, was adopted or approved by the board, which by virtue of section 63(3) of CAMA and article 119 of the Articles of Associa- tion of Group Merchant Bank Limited, was vested with the e power to manage and control the bank, the power to make rules and regulations must reside in the board of directors. Since exhibit P9 was not shown to be approved, it would not apply, and this is the document which contains the rules and f regulations for the grant of facilities. Before dealing with this element in the charge identified by the defence, there is the other element in the offence that the sum of N14,990,376.06 granted by the accused was g above his lending limit of N4m. The defence does not seem to deny lending this and from the contents of exhibit P10, the board minutes, and the evidence of PW1 and PW4, these facts are established. h As to the issue of exhibit P9, the Tribunal looked at all the circumstances presented to it in evidence by prosecution witnesses, particularly PW1 and PW4, documents in exhibits P8, the C.B.N. Code of Conduct, exhibit P10 which are the i minutes of the board of directors’ meetings during the tenure of the accused, exhibit P25, the minutes of the board after the accused’s departure on 27th September, 1994, exhibit P3, the Memorandum and Articles of the Group Merchant Bank Limited, exhibit P38, the statement of the accused to j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 99 a the police, exhibit P102, the letter of the accused dated 27th October, 1994 reacting to charges against him (page 7 etc. in particular). b The conclusion this Tribunal came to is that at all material times, the accused, the staff of Group Merchant Bank Lim- ited, the directors and management of Group Merchant Bank Limited, were operating under various rules and regulations c which they believed they were bound to operate under, because the law, BOFID in particular, enacts that they have to do so and ensure that none of them was breached. The supervisory authorities of the bank, C.B.N. and d N.D.I.C. based their findings on exhibit P106, the Special Examination Report dated 30th April, 1994 on these rules. For example on pages 13–14 reference was made to this document, the Credit Manual (exhibit P9). PW4, who was a senior manager in the bank during the tenure of the accused, e testified “our Bank has rules and regulations embodied in 2 documents, the Policy and Procedural Manual (exhibit P8) and Credit Policy Guide (exhibit P9) both prepared during the tenure of the accused as guiding the operation of the f bank”. This witness, now the executive chairman of the bank, knew exhibits P8 and P9 as the rules under which the bank functioned. He gave detailed evidence of the procedure and how the rules were being applied in practice. g The evidence was to the effect that the lending limit of the accused was up to N4m. Based on the lending policies of the bank and any amount above that should be referred to the All Purpose Committee of the board whose chairman was h Mr Dotun Duro Emmanuel. The witness said the limit of the committee was N7m and any amount above that had to be approved by the board. There is evidence of the approval of this policy and of ap- i provals of loans based thereon, for example at pages 8, 19, 23, 40 and 53, 54, 68 etc. of exhibit P10, the board minutes of 29th August, 1990 and 8th March, 1994. Also the Credit Manual, exhibit P9, came up for mention j in the minutes of the board of Group Merchant Bank [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 100 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Limited of 27th September, 1995 minutes 29.3.6 at page 3 of a exhibit P25. It was therein recorded that present were: A.V.M. Mukhtar Mohammed the chairman, Christopher Anyaegbunam, Esq., b director, and three new directors, Alhaji Tijani Abdullahi (PW4 and presently the executive chairman of Group Mer- chant Bank Limited), Mr S.O. Bailey (appointed managing director after the departure of the accused) and Alhaji M. c Bello Mohammed as well as the secretary/legal adviser of the bank M.S. Olusola Cole. The board, it was recorded, “directed management to comply with the C.B.N recommendations with regards to the Bank’s accounting system and to update the Bank’s Credit Manual . . .”. d PW4 also gave detailed evidence of the procedure for approving the amount within the accused’s lending limit and said that, when a customer applied for a facility, the bank would make a full appraisal of the request, including taking e security or collateral from the customer and conducting a credit check of the customer. A report is then made to the approving authority, in this case the managing director who is the accused. If satisfied that the customer met all the crite- f ria for such a facility, he would approve. Then a letter of offer would be written and sent to the customer who, if he accepted the offer, would sign and return the letter in acceptance and, it is only then that the bank would allow him to g draw funds after he had met all the terms, especially those on security. The appraisal was done at the material time by the Credit and Marketing Department of the Bank, now called Corpo- h rate Banking Department. PW1, however, gave evidence that the facility to Red Star Express was not processed through his then department responsible for processing advances. i It is to be noted that no part of this evidence was challenged or controverted. Nor was controverted any part of the evidence, including that which informed the Tribunal that the circumstances under which a customer was allowed to overdraw his account was when he had met all the terms, the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 101 a same as set out above, a procedure which applies to loans and overdrafts. This Tribunal had a review of this evidence of PW4 who b as a staff member of the bank at the material time knew about the application of the rules and regulations, by the bank and its staff, the contents of which the accused’s contract of employment, exhibit P6, reviewed by the board on c 27th November, 1992 to increase the accused’s benefits (as shown on page 73 of exhibit P10). It is this and the contract the accused relied on to insist when he was confronted, that he acted intra vires in the advances he made to various persons. d It was also noted from exhibit P10 that the board of directors applied these rules and regulations contained in exhibit P9. e In the premises, this Tribunal could not find its way to ac- ceding to the invitation in the submission of the defence, when it was urged that exhibit P9, not having been approved by the board, it did not apply, and therefore the accused should be discharged on count 2. f Upon reading the Central Bank Code of Conduct for directors of licensed banks executed by the accused on 3rd September, 1991 upon assuming office as managing director, i.e. exhibit P7, and the Policy and Procedural Man- g ual, exhibit P8, and the Group Merchant Bank Limited’s Credit Policy Guide, various sections of the Banking Act, and especially section 18 BOFID, the Tribunal came to the conclusion that these documents, exhibits P8 and P9 in prac- h tice and statutorily, were meant to and do go together incorporating each other’s contents as the rules and regulations of Group Merchant Bank. As a matter of fact, exhibit P8 which the defence submitted applied because the board of directors of Group Merchant Bank adopted it, acknowledges the exis- i tence (in the bank) of a credit policy. The credit policy is, the Tribunal found, the reference point for the procedures required to be followed by staff with respect to overdrafts. See, for example, page 107 of exhibit P8, the Procedure j Manual, where it was stated as follows under the title, [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 102 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

“OVERDRAFTS”: “Overdrafts must be . . . as provided by a Groups Credit Policy”. It would seem to me that this reference shows that this credit policy of Group Merchant Bank Limited was in existence at the time the Procedure Guide b was adopted and approved by the board and would be deemed approved by reference. This view is confirmed by the dates; the date on exhibit P9, the Credit Policy Guide, is September, 1990, the month this bank commenced operations (see paragraph 3 on page 1 for explanation as to dates, c and the bottom left of each page 1, page 102 of exhibit P9 bearing the date September, 1990). See also the date on which the board adopted exhibit P8 was 24th September, 1991 (see pages 31–32 of board minutes – exhibit P10). d Because of the statutory provisions requiring the banks imperatively to operate under certain rules and regulations, this Tribunal wondered whether the submission by the defence was meant to show that Group Merchant Bank Lim- e ited never had a credit policy or that the reference to one in exhibit P8 which bears the name of the accused at page 1, was referring to a non-existent policy. The Tribunal’s view is that exhibit P9 contains the credit f policy referred to in exhibit P8 approved and applied during the tenure of the accused. By reference the policy was approved by the board. The conclusion of the Tribunal in respect of count 2 is that g the accused had exceeded his lending limit of N4m by lending N14.5m to the company Red Star Nigeria Limited, a company in which he is director and has 15% shares. The accused has also breached the rules and regulations of h the bank in not obtaining security for the facility as required by the rules. Documentary and oral evidence tendered by the prosecution, particularly through PW4, Tijani Mohammed Abdul- i lahi, the executive chairman of Group Merchant Bank Lim- ited, shows that the lending rules of the bank were not followed by the accused. Exhibit P43, the batch of letters of request from Red Star to Group Merchant Bank Limited, simply shows that once a letter was received from Red Star j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 103 a by the accused, the same day or a day or two later, the request was approved by the accused and often marked “urgent” by the accused, accompanying instructions to named b staff would get the request honoured. The prosecution has proved this count. The accused is found guilty. Count 3: This count also relates to the same overdraft of c N14,990,376.06 (excluding interest) granted to Red Star Ex- press as in counts 1 and 2. The offence is said to be contrary to section 18(3) of BOFID. The section provides:– “(3) Every director of a bank who has any personal interest, d whether directly or indirectly, in an advance, loan or credit facility, or proposed advance, loan or credit facility 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 cir- e culated forthwith to all directors.” The evidence given by the prosecution in respect thereof is the same as for counts 1 and 2: that the accused is a director of Group Merchant Bank Limited and the managing director f (see exhibits P4, P6 and P7) who granted overdrafts to Red Star Express (exhibits P43 and P44). The accused is charged with being a director of Group Merchant Bank Limited having a personal interest in the g overdraft and failing to disclose his interest to the board of Group Merchant Bank Limited. Unlike counts 1 and 2, this count is contrary to section 18(1) and (3) of BOFID. According to the prosecution, the fact that the accused has h a personal interest in the loan, can be found in exhibits P14, particulars of directors of Red Star Express Nigeria Limited which showed that he was director from 11th August, 1992, and P15, Return of Allotments of that company covering the i period 2nd September, 1992 to 25th August, 1994 which showed that accused held out of the 7 million shares of N1 each, 1,050,000 shares. This is 15% of the shares. In the evidence of PW1 and PW4, by tendering exhibit j P10, the minutes of the board of Group Merchant Bank [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 104 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Limited during the tenure of the accused as managing direc- a tor, the prosecution set out to prove that the accused had a personal interest in Red Star Express Nigeria Limited and that he did not declare this interest to the board. It was b pointed out that the board minutes did not contain any record of such disclosure of interest in the facility. It has been pointed out earlier in this judgment that had there been a disclosure of interest in Red Star, it would be c found, but is not found in the board minutes, exhibit P10, or the particulars of directors, exhibit P4, Return of Allotment, exhibit P5, register of directors and Secretaries, exhibit P121. d It was also noted by the Tribunal that throughout exhibit P10, there was no mention of Red Star Express or the overdraft or loan or any facility to it. Exhibits P43 and P44 show very regular grants to this company in a manner that, e as admitted by the accused in his statement to the police (exhibit P38), approximately N32 million debit stood in the name of that company when the accused left office in March, 1994. f There was evidence that this grant was made at the time as alleged, and it was never raised at the board, not even when the directors requested that a list and particulars of debtor customers be provided them. It was not controverted. It is the finding of the Tribunal that the allegation is proved. g For the accused, in respect of this count, apart from the submission relating to illegality dealt with elsewhere in this judgment, it was the view of the defence that the accused had not been proved to have a personal interest. This Tribu- h nal adopts its decision in count 1 relating to proof of personal interest. Personal interest has been proved. In view of the foregoing, the Tribunal finds the charge in count 3 proved. i Count 4: This count, punishable under section 46 of BOFID, is also based on the accused’s dealing with Red Star Express Nigeria Limited. The accused, it has been established by the evidence relating to counts 1, 2 and 3, was at j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 105 a the material time the managing director and a director of Group Merchant Bank Limited, as well as a director and shareholder of Red Star Express. The prosecution alleges in b the count that in relation to that company, a courier company, not a subsidiary of Group Merchant Bank Limited, the accused failed to take reasonable steps to secure compliance by the bank with the provisions of section 19(3)(a) of BOFID. The section provides as follows:– c “(a) No bank shall be managed by a person who is a director of any other company, not being a subsidiary of the bank.” Then section 46 provides:– d “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 e statement submitted under the provisions of this Decree, is guilty of an offence and liable on conviction to a fine of N5,000 or imprisonment for 5 years or to both such fine and imprisonment.” f The prosecution had also led evidence through PW4, the executive chairman of Group Merchant Bank Limited, establishing that Red Star Express Nigeria Limited is not a subsidiary of Group Merchant Bank Limited. g In particular, exhibits P14 and P15, the particulars of directors of Red Star Express and return of allotment, show that Red Star Express is not a subsidiary of Group Merchant Bank Limited. h The foregoing, together with the evidence earlier accepted by the Tribunal in counts 1–3 with respect to the accused’s relationship with Red Star Express Limited as director and his position in Group Merchant Bank Limited, as managing i director and director, clearly show that all the elements of the offence have been established. As to the issue of the accused not taking reasonable steps to secure compliance with the requirements of section j 19(3)(a) of BOFID, the prosecution’s evidence was that the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 106 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. accused became managing director of Group Merchant Bank a from September, 1991 and continued in office till March, 1994. He became a director of Red Star Express with effect from 11th August, 1992 and held 15% shares as shown in b exhibit P15 (see the evidence of PWs.1, 3 and 4 and exhibits P1, P2, P6, P7 and P14). The reaction of the defence to the prosecution’s case in count 4 as summarised earlier in this judgment (treated with c counts 6 and 7) was that the powers delegated to the accused as managing director in his contract of employment (exhibit P6) does not include the power to appoint or regulate the appointment to that office. In the circumstance, it was argued, d that if there was any irregularity in the appointment of the accused as managing director, the regularisation thereof is something outside the competence and power of the accused. A statement by James, LJ in McDougall v. Gardiner Ch.D 13 at 23; quoted in support, is to show that it is the e bank Group Merchant Bank Limited which is the proper person to complain “if there is someone managing the affairs of the company who ought not to manage them and if they are being managed in a way in which they ought not to f be managed”. Before going further to comment on this submission, let me set out section 46(a) under which the accused is charged in this count. It provides as follows:– g “Any person being a director or manager of a bank who fails to take all reasonable steps to secure compliance by the bank with the requirements of this Decree, is guilty of an offence.” What are the requirements of the Decree? There are several, h but the relevant one in count 4 is in section 19(3)(a) set out above. Returning to the submission, the short answer to the above i submission of the defence with respect to the dictum of James LJ is that the issue in the McDougall case is different from the issue in the charge before the Tribunal. Obviously the issue here is not, who is the proper person to complain and who has a right to an action, in a civil claim, if the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 107 a affairs of a company are being managed by persons not qualified to manage same or the affairs are being misman- aged, as in the McDougall case. b In the McDougall case, a civil suit brought by a shareholder for a declaration and an injunction against the directors of a company on the allegation that the directors were doing certain things injurious to the company without refer- c ence to the shareholders in general meeting, the issue was whether the shareholder could bring the suit. The Court of Appeal in England held that it was the majority of the shareholders who were entitled to sue, not the individual. The d foregoing shows that the two cases will not apply here. It is perhaps important to reiterate the law relating to binding force of a decided case. The law is that the binding force of a case is determined by the question for determination in e that case which is deliberated upon by the court and becomes the ratio decidendi in the case. By the doctrine of judicial precedent applicable in our courts, all subordinate courts are bound to follow decisions of a superior court f where the ratio decidendi of that decision govern the matter before the subordinate courts. The issue upon which the ratio decidendi was based in the case of Abubakri v. Abudu Smith and others (1973) 1 All g N.L.R. (New Series) 634 cited by the defence as decided on by the Supreme Court, relying on the McDougall case, is quite different from the issue in the charge before this Tri- bunal. The issue in that case was whether individual mem- h bers of an unincorporated body could bring an action without doing so in a representative capacity or joining the association. The issue of jurisdiction which was raised in limine taken by the lower court was heard and upheld. On appeal, the Supreme Court held that the court had no jurisdiction in i an action by individual members of the association in respect of wrongs allegedly done to the association, except where the individuals can establish that their personal rights have been invaded, as opposed to the rights of the associa- j tion (see the Supreme Court in the case of Oyewunmi v. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 108 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Ogunesan (1990) 3 N.W.L.R. (Part 107) 182). It is not the same issue here. The issue here is that a statute has enacted that certain requirements, in this case set out in section 19(3)(a), must be b complied with that any person who is a director or manager who fails to take all reasonable steps to secure compliance with the requirement is guilty of an offence. This is clearly a criminal charge brought by the State for a statutory offence. c The ratio in the two cases do not apply here. Or, is this submission by the defence challenging the powers of the State, given it by the Constitution and statutes to bring such a charge? I hope not. d In our view, this count is somewhat linked up with counts 1–3, dealing with various prohibitions under BOFID, such as those in section 19, which prohibit the employment of certain persons; section 20, restricting some named banking e activities, the obligations placed on persons in the position of the accused, viz. directors of banks, by exhibit P7, the C.B.N. Code of Conduct for Directors of Licensed Banks. All the above convey a certain demand of good faith and f code of behaviour expected of a person in the position of the accused in the bank, a director and in fact the managing director. As we understand it, the import of count 4 is that, had the accused done what was expected of a reasonable man in g the position of director, managing director or officer of the bank who is seized with the facts and information about his (own) directorship of other companies which he had a duty to disclose and which would have enabled the bank or board of directors (the appointing authorities) to comply with the h requirements in section 19(3)(a), compliance with those requirements by the bank could have been secured. The issue has nothing to do with the shareholding of the accused in the bank raised by the defence. i It seems to this Tribunal that the count 4 is properly laid. It is recalled that the accused rested his case on the prosecution’s case. The Tribunal believes the evidence in respect of this count. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 109 a The count is held proved. Count 5: This count as charged pursuant to sections 20(2)(a)(ii) and 46(a) of BOFID has the same character as b count 4, charging failure to take all reasonable steps to secure compliance. It is also about Red Star Express Nigeria Limited. Section 20(2)(a)(ii) is hereby reproduced:– “20(2) A bank shall not, without the prior approval in writing c of the bank (a) permit to be outstanding, unsecured advances, loans or unsecured credit facilities, of an aggregate amount in excess of N50,000 d (ii) to any firm, partnership or private company in which it or any one or more of its directors is interested as director, partner, manager or agent or any individual firm, partnership or private company of which any of its directors e is a guarantor.” The complaint of the prosecution in this count is that the accused had not taken reasonable steps to secure compliance with the requirement that the bank must obtain the prior ap- f proval in writing of the Central Bank of Nigeria before it permits to be outstanding, unsecured advances, loans, or credit facilities of an aggregate amount in excess of N50,000 to a private company in which he was interested as director. The accused is a director of the bank, he is the managing di- g rector as the evidence of prosecution witnesses already showed and the exhibits tendered. He is seized with powers set out in his contract of employment (exhibit P6), paragraph 5(f ) and (g) in particular is noted. It thrusts upon the ac- h cused responsibility:– 5(f ) “to set up . . .” 5(g) “to advise . . .” Even if there were no provisions, he has a tacit duty as chief i executive. In counts 1–4, evidence which the Tribunal accepted established that the accused had granted facilities in the sum of N14,990,376.06 to Red Star Express Nigeria Limited, a com- j pany, not a subsidiary of Group Merchant Bank Limited, [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 110 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. company without security. The above sum which is the same a as in counts 1, 2 and 3 is said to exclude interest. It was established by exhibit P12, the Certificate of Incor- poration of Red Star Express, that it is a private limited li- b ability company. The Tribunal adopts all the evidence previ- ously accepted in counts 1–4 relating to this company, the grant of the above sum to Red Star Express Nigeria Limited, the position of managing director, and director held by the c accused in Group Merchant Bank Limited and director and shareholder in Red Star Express. For the prosecution, it was submitted that they had proved that advances in excess of N50,000 were outstanding against d Red Star Express by tendering exhibit P43, made up of letters of request for facilities by Red Star Express and approvals therefore and debit notes recording these facilities made available to that company, and exhibit P44, statement of e account of Red Star Express for the period 31st August, 1992 to 31st October, 1995. Both sets of exhibits show that as at the date the accused left the service of the bank, the account of the company showed a debit balance far in excess of N50,000. As at 28th February, 1994 precisely it was f N32,259,568.64 debit (with interest). The prosecution witnesses, PW1, PW4 and PW5, the acting secretary, executive chairman of the bank, and the Central Bank examiner, respectively in their evidence, g showed that there was no Central Bank written approval for the amount charged to be outstanding in the account of Red Star Express Nigeria Limited. The witnesses, particularly PW4 and PW5, affirmed that h the facility was unsecured and the C.B.N. examiner in his report, exhibit P106, stated that there was no security for this facility to Red Star Express and some other customers of Group Merchant Bank Limited to whom the accused granted i loans etc. The explanation which the accused tried to make in exhibit P38, his statement, by distinguishing this facility from loans, has not stood the test of time in the face of the evidence of j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 111 a PW4, the executive chairman of Group Merchant Bank Lim- ited referred to in the course of dealing with counts 1–5. When it came to establishing that the accused did not take b reasonable steps to ensure compliance with the law, the prosecution also relied on the evidence of PW1; the acting secretary of Group Merchant Bank, PW2, the Investigating Superintendent of Police, PW4, the executive director of c Group Merchant Bank and PW5 the Central Bank Special Examiner. Exhibit P26 is the audited account of Group Merchant d Bank Limited for the year ending 31st March, 1994 showing that certain provisions of BOFID had been infringed by the Group Merchant Bank Limited. The overall effect of the evidence led by the prosecution e was that as the chief executive of the bank, who had the responsibility of managing the day to day affairs of the bank and as the person who is responsible for granting the facility in issue to Red Star Express, he was in a position to take f necessary steps to comply with the requirements of the law, particularly as a director of Group Merchant Bank Limited who signed exhibit P7, the C.B.N. Code of Conduct for Di- rectors of Licensed Banks on 3rd September, 1991 and is- g sued exhibit P8, Group Merchant Bank Policy and Proce- dural Manual, exhibit P9, Group Merchant Bank Limited Credit Policy Guide. In the view of this Tribunal, as the banker at the apex of h the management of Group Merchant Bank Limited, he had a responsibility to see to compliance with the laws affecting the institution which he managed. The foregoing answers the question posed by the learned i Senior Advocate in his submission in this count and count 14, viz. “whether a director of a bank is liable to be prosecuted for an offence under section 46(a) of BOFID because it is alleged that the bank, without the written approval of j C.B.N., permitted to be outstanding, unsecured advances [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 112 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. and credit facilities of an aggregate amount in excess of a N50,000”. As matter of fact, section 46 by its language, places on “any person, being a director or manager of a bank”, the re- b sponsibility to “take all reasonable steps to secure compliance by the bank with the requirements of this Decree” and to take all reasonable steps to secure the correctness of any statement submitted under the provisions of this Decree”. c It is trite law that a corporate body acts through persons. The defence admits that Group Merchant Bank is “a corporate entity”. In particular, where therefore a statute specifically enjoins a corporate body to act in a particular manner d and enacts that if it failed to do so, any director or manager who fails to take steps to secure compliance will be liable, any person who is director or manager of the corporate entity will be held liable. It cannot be said to be oppressive to e bring to question, a director and chief executive in the position of the accused. He was also its managing director, who, from the uncontradicted oral and documentary evidence seemed virtually the only person in the position of director or manager who knew and did everything connected with f Red Star Express, and singlehandedly approved all the facilities in issue. It is to be recalled that part of the proceeds of this facility went to the Hyperion Finance and Investment Nigeria Limited, a company 100% owned by the accused g and his wife. The defence states that it is “unjust and unconstitutional for the Tribunal to try such a serious issue in proceedings to which the bank is not a party, i.e. behind the back of the h bank”. It is to be observed as follows:– It was the bank that wrote exhibit P101 to the accused on i 21st October, 1994 charging him with his acts in relation to Red Star Express and others. This sparked off the accused’s reply sent to the bank in exhibit P102 dated 27th October, 1994. All that followed an internal audit conducted by the bank on its operations for the period covering the tenure of j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 113 a the accused as managing director of the bank. The accused in exhibit P102 dwelt on Red Star Express at page 13 and on the other companies on the other counts of this charge. Sec- b ondly, it was the bank, Group Merchant Bank Limited, which wrote exhibit P34 on 13th December, 1994 to N.D.I.C. seeking its co-operation to recover the debts arising from loans and facilities granted by the accused to various directors and companies including Red Star Express Nigeria c Limited (see page 4 of exhibit P34). It was Nigeria Deposit Insurance Corporation which later, with the Central Bank of Nigeria, took over the bank with the Central Bank and which wrote exhibit P36 on 4th July, d 1995 to the Deputy Inspector General of Police requesting it to assist it with regard to the debts arising from the loans and facilities granted to directors etc. during the accused’s tenure which include those to Red Star Express and the companies e charged in this matter before the Tribunal. Prosecution witnesses gave evidence to this effect and tendered exhibits in support. PW1 is the acting secretary and legal adviser of the bank, Group Merchant Bank Limited. f PW4 is the executive chairman of Group Merchant Bank Limited. We conclude that this charge is not brought and tried behind the back of the bank. Indeed the bank is the complain- g ant. In considering this part of the submission for the defence, especially where the Tribunal was urged to hold that it could not adjudicate on counts 5 and 14 as it would involve an un- h justified violation of the civil rights of Group Merchant Bank Limited, the question that came to mind was, who is complaining, the accused or the bank? The learned dictum of James, LJ in the celebrated case of McDougall v. Gardiner at page 23 (supra), the benefit of which the learned Senior i Advocate for the defence gave the Tribunal, came to mind. Drawing from the wealth of those wise words, we hold the view that the company, Group Merchant Bank Limited, is the proper person to complain if its civil or constitutional j rights are being infringed. In any event, in the light of what [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 114 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. had been said earlier, this Tribunal can adjudicate on counts a 5 and 14. The civil rights of the bank is not being violated. Rather, the matter before the Tribunal is an attempt by the State to seek to uphold or protect such rights, if any, as b might be adjudged by the Tribunal. Another issue, also raised by the defence, is that the statute, i.e. BOFID, not only imposes a penalty of a continuous nature on the bank but also imposes a liability on all the c directors of the bank in section 20(6) which are “liable jointly and severally to indemnify the bank against any loss arising from any unsecured advances, loans, or credit facilities resulting from the contravention by the bank”. The d learned Senior Advocate is quite correct. When, however, he proceeded to submit that there was no basis for prosecuting one single/minority shareholder under section 46 of BOFID, the Tribunal had a further look at sec- e tion 46 and noted that the section uses the words “any person”, and then went on to qualify the “person” with the words, “being a manager or director of a bank, who fails . . .” (see the full text of the section supra). That “person”, f the section provides, “is guilty of an offence and liable on conviction to a fine of N5,000 or to imprisonment for 5 years or to both . . .” g The words of section 46 are quite clear and it is the law that, where the words of a statute are clear on its face, it bears no further interpretation. The section, it appears, set out to contravene “any” “direc- h tor” or “manager”. There is nothing in it to import joint contravention of all directors or managers. The accused is a director of Group Merchant Bank Limited and its managing director at all time material to this charge. i He can be contravened alone. This, however, in our view is without prejudice to the rights of the complainant to proceed against any other director or manager which it deems to have contravened these or other provisions of the law. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 115 a We have taken a close look at the passage from Craies on Statute Law (7ed) page 247 cited by the learned S.A.N. for the defence. We think that much of it support more the case b of the prosecution than that of the defence. A close perusal of the passage shows this, that it does not help the defence in the criminal charge such as the present one. The Tribunal also found in the same text Craies on Statute Law at page 248 the following applicable passage from the dictum of As- c quith, LJ in the case of Wilkinson v. Barkin Corporation (1948) K.B. 721 at 724. It puts to rest the present argument of the defence. It states as follows:– “It is undoubtedly good law that where a statute creates a right and d in plain language gives a specific remedy or appoints a specific Tribunal for its enforcement, a party seeking to enforce that right must resort to this remedy or this Tribunal and not to others.” At pages 248–249 the Learned Author went on:– e “. . . The rule of ascertaining whether a special remedy does not include a right of action is laid down in Vallence v. Falle (1884) 13 Q.B.D. 109 at 110 where Stephen, J. said, ‘The general rule . . . seems in substance to be that the provisions and object of the par- f ticular enactment must be looked at in order to discover whether it was intended to confer a general right which might be subject of an action or to create a duty sanctioned only by a particular penalty in which case the only remedy for breach of the duty would be by proceedings for penalty’.” g The provision for indemnity in section 20(6) of BOFID stands by itself as redress to the bank against directors for loss arising from unsecured advances, loan or credit facilities contrary to subsection (2)(a) of the same section. It is h not clear if the argument put forward by the defence takes into account the criminal as well as civil liability that often accrues against persons who infringe the law, the claim of none of which shuts out the other, unless so enacted by stat- i ute or contract, as the case may be. The Tribunal has had a look at BOFID and its sections 20 and 26 and the words used and found the words clear. We come to the decision that the Tribunal can adjudicate on this j count and count 14, the proceedings can be brought against [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 116 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the present accused alone, notwithstanding that any other a director or manager is not contravened alone, or along with him in this charge. This issue of whether the Tribunal could invoke the provi- b sion of section 20(6) of BOFID in these criminal proceedings will be dealt with later in this judgment. From the facts in counts 1–4 relating to Red Star Express Nigeria Limited and the part played personally by the accused, it has been c found as a fact that the accused was very much in a position to do something about the breach by the bank. After giving due consideration to all the facts and the state of the law, the accused is found guilty on count 5. d Count 6: This count is similar to count 4 charged under section 19(3)(a) of BOFID and punishable under section 46. (These sections of the Decree have been set out.) The only difference is that the company involved in count 6 is differ- e ent. It is Tauro Products Limited. The above section has been set out under count 4. The evidence in respect of this company from the oral evi- f dence of prosecution witnesses and documentary exhibits showed that Tauro Products Limited is a private limited liability company incorporated on 10th September, 1985. Particulars of directors of the company in Form CO7 dated 9th August, 1995 tendered in evidence, showed that the ac- g cused was appointed director by the subscribers to the Memorandum and Articles of Association of the company with effect from 6th August, 1985. Another particulars of directors of the same company dated 19th August, 1993 (ex- h hibit P119) also showed his name as director of that company. PW1 testified that Tauro Products Limited was not a customer of Group Merchant Bank Limited. Yet, the bank is- i sued a guarantee in the sum of N5m on its behalf in favour of Fidelity Merchant Bank Limited. This guarantee, which was approved by the accused, later crystallised when Tauro Products Limited failed to pay and the bank had to pay the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 117 a said sum. Tauro Products Limited was said not to be a subsidiary of Group Merchant Bank Limited. At the time the accused was a director of Group Merchant Bank Limited, b from 29th August, 1990 to 8th March, 1994 he was also a director of Tauro Products Limited. Evidence showed that he did not resign from any of the two companies. In granting the guarantee to this company, the accused had c not complied with the rules and regulations of the bank limiting his powers to approve facilities to N4m, and prohib- iting the granting of credit facilities without security. The minutes of the board during the accused’s tenure (exhibit d P10) showed that Tauro’s facility was never approved by the board of directors or the board’s All Purposes Committee in whom were vested powers to grant loans or facilities above N7m and above N4m respectively. The company was never e mentioned at any board meeting nor was there any other document showing that there was any deliberation on the facility granted it. The accused did not declare his interest to the board nor his interest in the N5m guarantee. f Exhibit P4, Particulars of Directors of Group Merchant Bank Limited, and exhibit P120, register of directors and secretaries of Group Merchant Bank Limited, tendered by PW1 and PW4, showed that against the names of all direc- g tors, the column for particulars of any other directorship was blank. No particulars were given in respect of any director of Group Merchant Bank, including the accused. In any event, evidence showed that it had no account with h Group Merchant Bank, not being its customer. The prosecution pointed out that the C.B.N. Code of Con- duct for the Directors of Licensed Banks executed by the accused on 3rd September, 1991 was binding on him. In ac- i cordance therewith, a bank may not be managed by a person who is a director of any other company which is not a subsidiary of the bank. The accused’s contract of employment was also referred to by the prosecution to show the date he j became managing director of Group Merchant Bank Limited. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 118 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The evidence given by the prosecution was not countered a by the defence. As earlier stated, the witnesses gave evidence and tendered the documents. The main element in this count 6, as in count 4, is to show b that the accused, a director of Group Merchant Bank Lim- ited, its managing director at the period, did not take reasonable steps to secure compliance with the provisions of the BOFID. The facts are not in controversy. The main c plank of the defence is on points of law. In this part of the judgment the Tribunal is dealing with points of law other than those relating to illegality raised by the defence which applies to all the 15 counts in the charge. d The defence in its submission grouped this count with counts 4 and 7, being offences involving contravention by the bank of section 19(3)(a) for which the accused is alleged to be liable in that he did not take reasonable steps to ensure e compliance by the bank. They are offences punishable under section 46 of BOFID. The grouping is very helpful. f The summary of the submission of the defence has earlier been set out. The evidence given by the prosecution also summarised and which the Tribunal accept are set out above. g The directorship of Tauro Products Limited by the accused, assumed in 1985 before the accused was appointed director and managing director of Group Merchant Bank Limited in August, 1990, is the pivot on which the defence built the foundation of its defence of no bank, no director, no h contract etc, as set out in the learned S.A.N.’s submission, put forward in a most masterly and admirable manner in his written submission, later emphasised in his final oral address. i This has been dealt with elsewhere in this judgment when we found ourselves unable to uphold that submission. The Tribunal found the relevant facts in respect of this charge duly established by the combined effect of the clear j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 119 a evidence of the five prosecution witnesses and the overwhelming documentary evidence. The elements of the offence have been proved thereby. b In respect of this count the Tribunal adopts its reasoning and other reasons in count 4 on other points of law raised by both the prosecution and the defence, in coming to the same conclusion as in that count. The accused is found guilty. c Count 7: This count, grouped with counts 4 and 6, is constituted by the same elements as those counts. The accused is charged with breaching section 19(3)(a) of BOFID on the three counts. In respect of this count, it is in relation to Hy- perion Finance and Investment Company Limited. Section d 19(3)(a) has earlier been reproduced under count 4. Although a lot has been said about the legal position in respect of counts 4, 6, 7 when dealing with count 4, a few more words will suffice to bring out further the legal e grounds for the Tribunal’s decision. In effect and as we understand it, the accused is alleged in this count of the charge to be a person who manages a bank while he is a director of another company which is not a subsidiary of the bank, a f condition which is prohibited by section 19(3)(a) of BOFID. That other company is Hyperion Finance and Investment Company Limited. The other allegation is that, had the accused taken reasonable steps, he would have secured com- g pliance with section 19(3)(a) which prohibits this of the bank. It is the same analysis that applies to counts 4 and 6. What were the reasonable steps required of the accused? In our view, it is to show that measure of good faith and re- h sponsibility expected of a person in his position, as director of Group Merchant Bank Limited and its chief executive, by disclosing his directorship and interest in Hyperion Finance and Investment Limited. The board had appointed him and kept him appointed to manage the bank as its chief execu- i tive, without knowledge of his being director of another company. There is abundant and unchallenged evidence from exhibit P10 (board minutes), as from oral evidence that the accused j did not disclose his directorship to the board of Group [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 120 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Merchant Bank Limited, the appointing body. Hyperion Fi- a nance and Investment Company it was proved is not a subsidiary of Group Merchant Bank Limited. It is pertinent to state that the information relating to the b accused’s directorship in this company and others is one within his own knowledge. It is in the light of the foregoing that it looked as if the defence was simply begging the question in their submission, when they said that if there was ir- c regularity in the appointment of the accused as managing director, the regularisation is something outside the competence and power of the accused. Had he shown that good faith and compliance with the Companies and Allied Matters d Act, BOFID and other laws and disclosed his interest in the matter which were clearly in his competence and power, the bank would then have been in a position to comply. He is the managing director who is the director of that other com- e pany. Indeed he could be said to be the person who misled or failed to lead the bank and the directors of the bank right, in the discharge of their duties, set out in section 63(3) of the Companies and Allied Matters Act, to manage the business f of the bank. This includes complying with this provision of BOFID, when he failed to make necessary disclosures. Like in those other counts 4 and 6, the accused is shown not to have disclosed his directorship of this company, Hy- g perion Finance and Investment Company Limited, he became director of that company with effect from 16th May, 1991 while he was already appointed director and employee and managing the bank from August, 1990. He failed to dis- h close the directorship to the bank’s board which appointed him as the prosecution witnesses showed in their evidence. The evidence of the witnesses which the Tribunal accepts has earlier been fully set out. i We adopt the same reasoning on the points of law herein as in count 4 in coming to the decision that the prosecution has proved its case conclusively on this count. We find the accused guilty. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 121 a Count 8: Count 8 is connected with Tauro Products Lim- ited. The count charges the accused with being interested in an unsecured bank guarantee which later crystallised in the b sum of N5 million. The guarantee was issued by Group Merchant Bank in favour of Fidelity Union Merchant Bank Limited for the benefit of Tauro Products Limited. In this company, the accused is alleged to have an interest as direc- c tor, which interest he failed to declare. The offence is said to be contrary to section 18(1)(a) and (b) of BOFID. This count is akin to counts 9 and 11 brought under section 18(1)(a) and 18(1)(b) and partly to counts 2, 9 and 13 d brought under section 18(1)(b) of BOFID, and to count 1 under section 18(1)(a). The count combines the elements in those counts. The sections have been reproduced under counts 1 and 2. e The facts relating to Tauro Products Limited have been fully summarised in the summary of evidence of the prosecution witnesses which this Tribunal accepts and when dealing with count 6. f The prosecution’s case in respect of count 1 and others with regard to the elements of the offence to be proved are the same as in count 8 in relation to breach of section 18(1)(a). That for count 2 and this count 8 relating to section g 18(1)(b) are also the same. Counts 8, 9 and 11 under the same sections, have the same elements, albeit for different companies or persons. For the defence, it had treated the counts by grouping them h as follows: counts 1, 8 and 9 under section 18(1)(a) of BOFID relating to the defence of failure to disclose interest. Counts 2, 11, 12 and 13 under section 18(1)(b). Chief Wil- i liams, S.A.N., made submissions on points of law applicable to all the counts in each set. The Tribunal has already dealt with the legal position relating to section 18(1)(a) when deciding on count 1 and to sec- j tion 18(1)(b) when deciding on count 2. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 122 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The decision earlier reached was that Group Merchant a Bank Limited is a bank duly incorporated and licensed and to which BOFID duly applies. So much has also been said in dealing with counts 1 and 2 regarding the application of sec- b tion 18(1)(b) of BOFID which will not be repeated here. The reasoning of the Tribunal on points of law in count 1 and count 2 are hereby adopted to apply to this count 8. One major point raised by the defence in its submission c was that a “guarantee” was not included in section 18(1)(b) which uses the words “advance, loan or credit facility”. Therefore, the accused could not be liable hereunder for a guarantee to Hyperion Finance and Investment Limited. d The short answer to this is that exhibit P9 already held to the bank, defines “letters of guarantee as non-money use credit” stating that careful evaluation of such credit proposals are necessary (see page 83). e In reply to this point of law, the learned prosecuting Coun- sel pointed out the definition of “a guarantee” in Jowitt’s Dictionary of English Law (2ed) by John Burke page 876. It is “a collateral promise to answer for the debt, default or miscarriage of another as distinguished from an original and f direct contract for the promisor’s own act”. The Failed Banks Decree, in section 29 defines the word “loan” to include “an advance, a guarantee and any other credit facility”. g When viewed against these definitions, and the evidence of PW4, the obvious conclusion here is that a guarantee is a credit facility and is included in section 18(1)(b). h The final decision reached on the facts and the law after due consideration of the submission of learned S.A.N. for the defence, is that the prosecution has proved the charge in count 8 beyond reasonable doubt. The accused is found guilty as charged. i Count 9: This count deals with contravention of section 18(1)(a) and (b) of BOFID in connection with Hyperion Fi- nance and Investment Company Limited. The uncontroverted documentary evidence and oral evidence, particularly j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 123 a from PWs.1, 3 and 4, show that the accused and his wife are the only directors and shareholders. The company was granted a guarantee of N5 million without security. No secu- b rity was sought or obtained. The position of the accused or his dealings with this company with regard to the guarantee which he granted and which it enjoyed for four months before it was cancelled, c was never declared to the board of the bank. Nor was the loan approved as required by the rules and regulations of the bank. The ingredients of the offence in this count is the same as d in count 1 with regard to section 18(1)(a), count 2 with regard to section 18(1)(b) and similar to count 8 charged under section both 18(1)(a) and (b) of BOFID. There is one element pointed out by the prosecution in its e address in respect of this count, which is different from the counts of similar ingredients. It is the fact that, unlike in count 8, the guarantee in this count did not crystallise. This is important. It has been noted however that this guarantee f was enjoyed for four months before its cancellation and discharge of Group Merchant Bank Limited as the documentary evidence showed. The prosecution submitted that although the guarantee did g not crystallise, it was still a credit facility, emphasising that this company had no account with the bank. This brings to mind the rule in exhibit P9, the Credit Guide of the bank that such facilities “shall be restricted for our most valued cus- h tomers etc”. This company, Hyperion Finance and Invest- ment Company Limited, is proved never to have been a customer of the bank, yet it did enjoy this facility. That point in our view was well taken by the prosecution. The issue of i proof of personal interest by the defence in its submission had also been fully considered in count 1. The Tribunal adopts its reasoning therein to arrive at the same decision on this count that personal interest was easily detectable and j proved. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 124 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The issue as to proof of declaration of interest and applica- a tion of exhibit P9, also raised by the defence and replied to by the prosecution, dealt with in counts 1 and 2 earlier in this judgment, also apply to this count. The Tribunal hereby b adopts the same reasoning as therein to come to its decision on this count. Neither the bank nor the board got a declaration from the accused of his interests, personal or otherwise, whether in the company Hyperion Finance and Investment Company Limited or the facility made available to it. Also c the credit manual, exhibit P9, applies to the accused. The unavoidable decision which is reached in the light of all that had been stated on the other counts of similar tenor, d hereby adopted for this count, is that this count has been proved. Count 10: This count is also about Hyperion Finance and Investment Company Limited. It charges the accused under e section 18(6) of BOFID with holding the office of director in that company while he was the managing director of Group Merchant Bank Limited. The post of director held by the accused in that company, it was charged, might have created conflicts with his position as director and managing f director of Group Merchant Bank Limited. The accused is charged with failure to disclose the fact, the nature, character and extent of his interest in the company, g Hyperion Finance and Investment Limited, a finance company, to the board of Group Merchant Bank Limited. Section 18(6) provides as follows:– “(6) Every director of a bank who holds any office or possesses h any property whereby, whether directly or indirectly, duties or interest might be created in conflict with his duties or interest as a director of a bank, shall declare at a meeting of the board of directors of the bank, the fact and the nature, character and extent of the interest.” i The major elements established in this count are that the accused was a director of Hyperion Finance and Investment Company Limited while also a director of Group Merchant Bank Limited; and that by the nature of the two positions j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 125 a held in the two different places, the bank and Hyperion Fi- nance and Investment Company Limited, conflicts might have been created and, finally, that the accused did not de- b clare the fact, nature, character and extent of his interest in Hyperion Finance and Investment Limited at any meeting of the board of Group Merchant Bank Limited. The facts about Hyperion Finance and Investment Limited c have earlier been set out. It is the company in which the accused holds 80% of all the shares and his wife the remaining 20% as exhibit P117, the Return of Allotments, shows. There is evidence in exhibit P24 that the accused and his d wife are the only directors of the company pursuant to a resolution of 17th May, 1991. The Memorandum and Arti- cles of Association of Hyperion Finance and Investment Limited (exhibit P118) sets out objects which give the e company power to carry out some objects similar to those of Group Merchant Bank Limited as shown in exhibit P3, Group Merchant Bank’s Memorandum and Articles. PW4 said in his evidence that Hyperion Finance and In- f vestment Limited was a financial institution and he knew this as a banker. Finance companies solicit for investment, carry on trade financing, act as stock brokers and lease equipments. g There was no evidence that the accused informed the board of Group Merchant Bank Limited of his finance company, Hyperion Finance and Investment Company Limited. The name of Hyperion Finance and Investment Company h Limited appeared in this list of companies to whom payments were made by Group Merchant Bank Limited on behalf of Red Star Express as stated when we were dealing with counts 1–3, the payment were from loan advances i made by the accused to Red Star Express, without authority. Other evidence of relevance relating to Hyperion Finance and Investment Limited, the accused and Group Merchant Bank Limited were that the accused used N6.295 million he j had taken out unlawfully from the Sundry Operations [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 126 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Account of Group Merchant Bank Limited to pay Car Link a Limited on behalf of Hyperion Finance Limited for 37 cars purchased by it from Car Link Limited. The accused admitted taking the sum but said “it was an I.O.U.” he took from b Group Merchant Bank Limited. The rest of the evidence given by this witness and others about this company, which this Tribunal accepts, have been earlier set out in the summary of their evidence. c They establish that the accused’s company was in competition with Group Merchant Bank Limited and that a conflict might have arisen in the accused’s position and loyalty to Group Merchant Bank Limited and Hyperion and Invest- d ment Limited, his finance company. Board minutes in exhibit P10 show that the name of his company was never mentioned to the board, Form CO2 of Group Merchant Bank Limited and its Register of Members e do not contain any particulars of Hyperion Finance and In- vestment Company Limited. PWs.1 and 4 affirm that no disclosure was ever made by the accused to the board of Group Merchant Bank Limited. Those facts are uncontroverted, the f evidence clear and to the point. Count 10 is unlike any other count in the charge in the sense that no other count is brought under section 18(6) of BOFID. In the grouping done by the learned defence S.A.N. g the count stands by itself. The summary of submissions made by the defence has been set out above. They were no two wickets in respect of this count. The first is based on the view that the contract of h employment was void and this affects the status of the accused. For, then he is not the managing director of Group Merchant Bank Limited because of the nullification of his appointment by his directorship of Tauro Products Limited. i The second is based on the same premise but in relation to the appointment of the accused as managing director of Group Merchant Bank Limited after he became a director of Tauro Products Limited. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 127 a The Tribunal has already made a finding on the issue of the status of the accused. The same is adopted for purposes of the above argument put forward by the defence. b One more point, in one breath, the defence submits that there is no allegation in count 10 that the accused is either a director or manager. In another, it concedes that the omission is not fatal to the charge and refers to section 64(b) of c the Companies and Allied Matters Act. We need not, in the light of this, therefore, concern ourselves any more with this submission which is of no effect, except to add that the combined effect of section 64(b) and section 650 of that Act, d defining the word “officer” to include a director or manager, the description in the charge as managing director suffices to bring the accused under section 18(6) of BOFID. The charge is correctly laid. e The learned Senior Advocate was quite correct in adopting the latter view about his earlier submission. The conclusion the Tribunal comes to in the light of the evidence, and after the review of the submission of learned f Counsel for the prosecution and the learned S.A.N. for the defence, is that all the elements of this offence have been proved beyond reasonable doubt. The accused is found guilty as charged. g Count 11: The accused is charged with granting unauthorised and unsecured advances in the total sum of N36,450,000 (excluding interest) to five companies named in the charge, while he was managing director of Group h Merchant Bank Limited. The offence is said to be contrary to section 18(1)(b) of BOFID. The section has already been set out under count 2 which is brought under the same section of BOFID. i The important elements necessary and proved in this count are: that loans were granted to each of the five companies in the sum involved, that the grant of the loans was unauthorised and the loans were unsecured and the accused, in grant- j ing these loans as he did, contravened the law. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 128 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The evidence relating to these companies clearly appeared a in the testimonies of PW4, the executive chairman of Group Merchant Bank Limited, and other witnesses already summarised above. b The story of this grant was that on inter-office memoranda of 13th January, 1992 and 26th February, 1992, the accused person, who was the managing director of Group Merchant Bank Limited, approved payments to the five companies of c the sum of N36,450 million. The companies were: Senide Nigeria Limited ...... N 7,449,180.83 Delgrade Agricultural Processing d Industries Limited ...... N 6,653,279.22 Citagroup Air Services Limited ...... N 8,380,327.87 Lydio Agric and Fishing Company Limited ...... N 9,311,475.41 e Laseum Impex Limited ...... N 4,655,737.17 Total N36,450,000 The sum, the memo approved, was to be debited to the “sus- f pense account” of Group Merchant Bank Limited. Cheques issued on behalf of these companies to United Commercial Bank Limited were collected by Mr Dotun Duro Emmanuel who signed for them. He is one of the directors of Group g Merchant Bank Limited. The five companies had no account with the bank, not being its customers. The directors of these companies were some of the direc- h tors of Group Merchant Bank Limited. Mr Dotun Duro Emmanuel, a director of Group Merchant Bank Limited, is a director of all five companies. The line-up was as follows: i Directors Senide Nigeria Limited: 1. Mr Peter Arigbe 2. Mr Oladotun Duro Emmanuel j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 129 a Delgrade Agric. Processing Industries Limited: 1. Mr John Oduwole Duro Em- manuel b 2. Mr Oladotun Duro Emmanuel Citagroup Air Services Limited: 1. Air Vice Marshall Muhktar c Mohammed (Rtd.) 2. Mr Dotun Duro Emmanuel 3. Mr Peter Arigbe Lydio Agric and Fishing Company Limited: d 1. Mr Oladotun Duro Emmanuel 2. Alhaji Shamseldeen Adesola Arologun e 3. Mr Peter Arigbe Laseum Impex Limited: 1. Mr Peter Arigbe f 2. Dotun Duro Emmanuel According to the evidence of PW4, the sums were credited to the bank’s Sundry Debit Account on the direction of the accused as these companies had no account with the bank g and it was a print-out from that account that records these sums. PW4 identified all the relevant exhibits and the signature of Mr Oladotun Duro Emmanuel who collected the cheques and signed against each. h These disbursements, the witness affirmed, were never authorised by the board of Group Merchant Bank Limited. No mention of them were made in exhibit P10, the board minutes. There was in fact no memo to the board for ap- i proval of the facilities. The Tribunal looked at the minutes of the board of Group Merchant Bank Limited in exhibit P10. At page 90, a board member asked the managing director j to keep the directors informed about the affairs of the bank. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 130 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

At page 55:– a “It was resolved that the managing director present the board with a break down of all loans and advances granted by the bank including commercial papers. The report should indicate whether b or not the facilities are performing and also whether or not they are secured.” This was a meeting of 15th May, 1992 after these loans to the five companies. At the next board meeting on 17th June, c 1992 and subsequent ones from 5th September, 1992, till the accused left the bank in March, 1994, nothing was said about the particulars of these loans by the accused or loans granted to his own companies and some others. d It was found that at several board meetings, there was often an item in the minutes: “Credit facilities for Approval”. Some facilities were approved by the board. None of these companies 1–5 was mentioned or anything e done about the N36.45 million granted them. At the meeting of the board on 22nd October, 1990, minute 14 noted “that the managing director has authority to approve credits up to a ceiling of N4,000,000”. f It was resolved that credits between N4m and N7m should be referred to the whole board. Based on the above facts, the Tribunal became of the view that the sum of N36.45 million was unlawfully granted to g the five companies which were not bank customers on the approval of the accused out of the funds of the bank. This was entirely unauthorised. The loans were also unsecured. There is unrebutted evidence from the fourth prosecution h witness that not a single kobo of this sum has been repaid. It was observed also that even before the ship of this bank capsized, and the directors in panic were frantically discussing at their board meetings solutions to its obvious problems i of liquidity, loss of depositors and public confidence in the board, inability to meet liability to depositors, the C.B.N. etc., no mention was made about the grant to these five companies. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 131 a Coming to the issue of contravention of the rules and regulations of the bank, it is to be pointed out that this has been dealt with at length earlier in this judgment in respect b of count 2. The Tribunal’s reasoning and decisions are adopted herein. In view, in the first instance, of the frequency of the recur- rence in counts 2, 8, 9, 11, 12 and 13 of the charge of applicability of Group Merchant Bank rules, we intend to say a c few more words about these rules and regulations particularly to bring out their import for ease of understanding the reasons for the Tribunal’s decisions. In the first instance, we note that on page 1 of exhibit P8, the Group Merchant Bank d Limited Policy and Procedural Manual, what could be described as a “foreword” to that document was written by the then managing director, the accused in this matter. It states that polices, controls and procedures outlined in the manual e represent mandatory operating requirements. “They should not be considered as all inclusive but used in conjunction with other Group Merchant Bank Manuals and good banking practice . . .”. This to our mind is clear reference to other regulations such as those in exhibit P9. f This, it is believed, makes it clear that the bank and staff recognise other “Manuals and good banking practice”. Ex- hibit P8 sets out the functions and responsibilities of the various departments and staff and their mode of operation. It g defines some technical terms used in the industry, procedures setting out practical guides for staff and officials of the bank etc. For the purpose of the matter before this Tribunal, pages h 3–7 contain definitions of such terms as “commercial papers, banker acceptances, Federal Government securities etc. and procedures for issuing these”. As to the issue of commercial papers, the procedure set out i on page 7 lists the necessary documents to perfect a mandate for such papers:– (i) Board resolution; (ii) Mandate letter signed by authorised signatories of j the company; [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 132 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(iii) Memorandum and Articles of Association; a (iv) Signed Commercial Paper Certificate; (v) Operational current account with Group Mer- chant Bank Limited. b Then prepare information memorandum on the issuer and distribute to potential investors etc. Another relevant part is on page 107, earlier mentioned in count 2, pages 120, 121 122 defining “security for loans and c advances”. Pages 124, 128 deals with “guarantee”. These pages spell out the need for security which is defined as “insurance to which the bank can have recourse in the event of failure by a borrower to fulfil his obligations”; d types of securities etc. Exhibit P9, the Credit Policy Guide in our view is a manual of the bank and sets out the policies which guide the bank and its officers and operatives in matters relating to e borrowing and lending loans, advances, securities, credits, documentation, approvals etc. Exhibit P8, which we have held the view was later in time than exhibit P9, enacts the procedure for administering the policies. f Of special importance for the case in hand are pages on “Credit standards”, particularly pages 25, 26, 36, 41, 42, 47, 48, 52 and 55 etc. In essence these pages provide that “the art of secured lending is a basic part” of the bank’s business. g “. . . Documentation must be always completed: on all credits . . . The value of collateral is important in terms of pro- tecting the Bank’s interest, ensuring the necessary level of commitment by the borrower . . .” h Every effort should be made to take collateral. Level of authority:– managing director N4,000,000; i board Credit Committee N4–7 million; full board in excess of N7 million. The Tribunal noted that the foregoing is in line with board resolutions. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 133 a Any amount over N4 million has to pass through the Man- agement Credit Committee on the way to the board’s Credit Committee or the full board. Appraisal to be undertaken: b “full documentation and complete analysis of the credit together with requisite approvals . . . for all loans even those falling within the managing director’s authority etc.”. In the light of the foregoing, it is clear that in authorising c the payment of N36.45 million to the five companies the managing director did not comply with the procedures in the Procedural Manual and Policy Guide or board resolution. There was no board committee resolution, no mandate letter from the authorised signatories of the companies, no Memo- d randum and Articles, no current account in Group Merchant Bank Limited or any account whatsoever, no information memorandum, no security or collateral, no documentation, no appraisal, no analysis. It was simply the approval which e is ultra vires the managing director, the accused in this matter whose limit was N4 million. The sums advanced to each company and total sum approved in one swoop were all beyond his power to approve. f The submission made by the defence that there is nothing in exhibit P8, the Procedural Manual, relevant to granting advances or facilities, we would state, with respect, cannot be correct in the face of what regulations have been set out g above, particularly those relating to issuing of commercial papers, which the accused purported to be doing. PW4 gave evidence of the system which tallies with the provisions in exhibit P8. As to exhibit P9, this Tribunal has already de- h cided that it applies. It came into effect as shown in it in September, 1990, the month the bank began operation. Everything put together, it is clear that all the ingredients of the offence in count 11 have been proved. i We find the accused guilty. Count 12: Count 12 is an offence said to be contrary to section 12(1)(b) of the Banking Act, Cap 28 Laws of the Federation of Nigeria, 1990. It charges the accused of ap- j proving and granting unauthorised and or unsecured loans [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 134 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. advances, overdrafts, bank guarantees, bonds, indemnities, a commercial papers and other credit facilities in the aggregate sum of N170,890,126.75 (excluding interest) in contravention of the bank’s rules and regulations. The offence is b said to have been committed between 10th September, 1990 and 19th June, 1991 while the accused was managing director of the Group Merchant Bank Limited. Section 12(1)(b) of the Banking Act provides as follows:– c “12(1) No manager or other official of a licensed bank (b) Shall grant any advance, loan, or credit facility to any person unless it is authorised in accordance with the rules and regulations of the bank, and d where adequate security is required by such rules and regulations, such security shall be obtained for the advance, loan or credit facility and shall be deposited with the Bank.” The punishment for this offence is N10,000 or imprisonment e for a term not exceeding three years and, in addition, any gains or benefit accruing to any person convicted under this section by reason of such contravention shall be forfeited to the Government of the Federation. f Although this count is brought pursuant to the Banking Act, the predecessor of BOFID, it is on the same premise as counts 11 and 13. These counts have the same ingredients. The companies involved are set out in the charge and are 11 g in number. 1. Pagade Chemical Ltd: By commercial paper transaction that is no commercial paper, this company got the approval of the accused and altogether carted away the h sum of N59,709,416.88. The accused had been shown in the evidence of PW4 to have co-signed commercial papers, the transaction of i which was procedurally and regularly issued to Arco Petrochemical by Group Merchant Bank Limited. All the procedures which the executive chairman, PW4, stated apply and also set out in exhibits P8 and P9 had been followed in that transaction. The accused, co-signed the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 135 a document in that but did not, in the case of this company, follow the procedure or any procedure. 2. Wolgade Chemicals and Pharmaceuticals Limited: b N6,000,000. Commercial paper that is no commercial paper as earlier shown was drawn altogether – no procedures followed, no security. The whole transaction shown in the batch documents, exhibit P50, clearly c prove the charge concerning this company. 3. Marriot Securities and Finance Services Limited: N18 million: The sum is beyond accused’s power of N4 million. This company was not even a customer of d the bank. Approval was also given by the accused for the irregular transaction as shown in the batch of documents, exhibit P48, no rules, written or unwritten, ordinarily applicable to such transactions relating to commercial e papers, were followed. PW4 set out the rules usually followed, so did the C.B.N examiner, PW5 of 17 years experience in banking, who also criticised the accused’s system in the f C.B.N/N.D.I.C Special Joint Examination Report (exhibit P106). With other evidence in the summary of evidence accepted by the Tribunal the rules were not followed. g 4. Cobik Supply and Trading Company Limited: The sum granted this company initially was N2,523,900 quite within the range of the powers of the accused who approved it. Other overdrafts also approved were within the accused’s powers but there were no collaterals, no h documentation, no appraisal, none of the policies followed which have formed the rules and regulations either by usage or specifically enacted in exhibit P9, were followed as shown in the batch of documents (ex- i hibit P53) in granting these facilities. 5. First City Fishing Company Limited: N3,307,461. The transactions, another irregular commercial paper transaction approved by the accused, are clearly shown in ex- j hibit P56. This, the approval by the accused to pay the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 136 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

debt of this company to Alpha Merchant Bank Limited a for N553,926.61 from Group Merchant Bank Limited funds and other transactions with it or without, did not follow the Bank’s policies as set out in the evidence of b witnesses accepted by the Tribunal. 6. Assurance Security Limited: N42,887,866.94. Another irregular use of commercial paper and other forms of obtaining advance fully established by oral and documen- c tary evidence, accepted by the Tribunal as earlier summarised. Exhibit P59, a batch of 86 pages, shows how various sums left the coffers of Group Merchant Bank Limited, d even when the account of the company was in debit, all approved by the accused. This includes N10m, N25m, N375,000, N.5m (called “loan”) for setting up of a mortgage finance company. No procedure for commer- e cial papers, loan, or advance were followed. The first two and the last sums above were all given ultra vires, being far above his lending limit of N4 million. No security, yet the sums were approved by the managing director, the accused. f 7. Pedamacgrek Shipping and Trading Company Limited: N1,425,000. The sum was within the lending limit of the accused. Out of this N940,000 did not require security as it had an equipment lease transaction covering it. The g balance of N485,000 approved by the accused as overdraft was not secured, no documentation or other procedures followed. 8. United Tarpauline Industries Limited: N491,000. An h overdraft as shown in exhibit P62 approved by the accused contrary to the bank’s policies at a time when the account was overdrawn, being N3,749,365.60 debit, bringing the total to N4 million. There is evidence, how- i ever, that a title document was later deposited for this facility by the company. 9. Textra Development Company Limited: N6,795,481.40. Exhibit P80 has the documentary evidence supported by j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 137 a the evidence of PW4 accepted by the Tribunal. Over- draft facilities approved were within accused’s lending powers, but he did not comply with the policies in ex- b hibit P9, the Group Merchant Bank Credit Policy Guide. No appraisal, no documentation and such sums as N3.5 million or N600,000, N1,050,000 etc. were approved, some, at a time the account was in debit as shown in exhibit P80. c There is evidence however that later there was a deposit of a title deed for these facilities. 10. Amalgamated Trustees Limited: N9,550,000. The trans- d action is contained in the batch of documents admitted as exhibit P65. It shows approval by the accused of N2.05 million, then N5 million (paid on the written instruction of the accused, another N1 million and e N1.5 million. The facility for this company was not secured. The sum of N5 million is surely in excess of the managing director’s lending power. He has not complied with the rules. f This company is also listed in count 14, the sum therein is N4.1 million also issued by cheque to the company on the instruction of the accused. We take this with that in count 13. For the same batch of documents, exhibit P65, g cover them and the same defect of ultra vires actions by the accused lending beyond his N4 million limit, no security, no rules or policy followed, all found proved. 11. ATIF Securities Limited: N20,000,000 was advanced to h this company. Documentary evidence once more shows that it was another irregular commercial paper transaction – four in number, each for N5 million. Evidence which the Tribunal believes shows that the procedures were never followed for the granting of commercial pa- i per and normally used by the bank as demonstrated by PW4 and explained by the C.B.N. expert on examination of banks, and as known in the banking industry. Exhibit P89 reflects the transactions – no information or ap- j praisal or invitation to investors, no security obtained. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 138 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The accused simply approved these facilities, far beyond a his lending powers. His explanation in his letter to the bank dated 27th October, 1994 has earlier been dealt with in this judgment. b They are unacceptable in law and in fact for reasons there given. The rules have been breached in respect of this company. Before concluding on this count, there is an important issue c which must be addressed. It was raised by the defence in its written submission on count 12 relating to the date of approval by the board of exhibit P8, approved on 24th Sep- tember, 1991, whereas the offence has allegedly been com- d mitted between 10th September, 1990 and 19th June, 1991. This was before the rules in exhibit P8 came into force. The prosecution countered in their reply on points of law by submitting that, where the accused is found to have e granted facilities beyond his lending powers, a verdict of guilty should be returned. This could very well be so but I must state with respect that it is not a complete answer to the point being made by the learned S.A.N. for the defence. f In the Tribunal’s view, if the contents of exhibit P8 was the only evidence of the rules and regulations relied on by the prosecution, the effect of the date on which exhibit P8 came into operation would be fatal to the case of the prosecution g in count 12 (only). There was, however, other evidence of documents containing the rules such as the accused’s contract of employment, the resolutions of the board in exhibit P10, the Credit Policy Manual (exhibit P9). There is also the h oral evidence of PW4 stating the rules and examples of their application. In particular, the transaction on commercial papers with Arco Petrochemical Limited given in evidence by PW4 took place about 3rd December, 1990 with Group Mer- i chant Bank Limited. (The dates ought to be noted.) To this, the accused was signatory. It went through all the systems in the rules for issuing commercial paper testified to by PW4. It answers the description of such a type of facility given by PW5, the C.B.N. examiner. It followed all the procedures. It j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 139 a set the pace for what the rules and regulations were in Group Merchant Bank. Thus, if exhibit P8 or P9 is discarded, as the defence would b have it done, the rules embodied therein are, as earlier stated, found elsewhere as given in evidence. The rules and regulations have been found breached in respect of the above companies, subject to what will be said presently c about two of the companies in this count. In summary, I would state that the facts are not in dispute. All the evidence, oral and documentary, tendered by the prosecution went in unchallenged and uncontroverted. That d the loan, advance or facility was made or approved by the accused in the manner shown in evidence has not been controverted. The summary of the evidence of the witnesses which the Tribunal accepts has earlier been set out. e Elsewhere this judgment deals with what looked like justification of his actions by the accused in his statement to the police and response to Group Merchant Bank’s letter of 21st October, 1994 to which he replied on 27th October, 1994, all f in evidence. He had said his limit did not include commercial papers, guarantees etc. We hold that it did. It must also be stated that the Tribunal is not unmindful of the assertion by the defence that some payments had been g made by some of the companies. This will be addressed at the appropriate time, although it must also be stated that sufficient details have not been put before the Tribunal. Sec- ondly, that the issues involved in the charge relate to the method and procedure for the initial grant which went en- h tirely against the rules of the bank. There are some companies in this count concerning which the Tribunal feels that it will not be entirely fair to find the accused guilty for the reason that the facilities were some- i what secured, albeit after the grant. These are United Tar- pauline Industries Limited and Textra Development Com- pany Limited. Let me mention at this point, that this company Textra is also listed in count 13 as owing another j N6,447,414.50, and it appears the title documents deposited [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 140 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. cover this too. The same reasoning applies to this and the a liability in count 13 has also been proved by the prosecution. It is also to be noted that all the evidence of the transactions with these companies are documentary and not denied b or countered in any way. The conclusion reached is that the prosecution has proved its case in respect of nine of the companies and we find the accused guilty. Count 13: This count is akin to count 1, both having been c charged under the same section 18(1)(b) of BOFID, already set out, and also count 12 which, though under the Banking Act, accuses the defendant of similar offences but in respect of different companies and at different times when each en- d actment was in force. The facts in the evidence of the prosecution witnesses which the Tribunal accept have been set out in respect of each company. They will not be repeated here. e The findings are hereby summarised in respect of the 15 companies listed in the count (exhibit P106) and the evidence of PW4 and PW5 is most vital. They identify the con- traventions. f 1. Assurance Securities Limited: The sum of N5,000,000 is involved. Exhibit P59, used in count 12 in respect of this company, covers this sum also. It was found there that the sum exceeded the accused’s lending powers, as no g security was obtained, the loan was unauthorised, breaching the rules and regulations of the bank. 2. Pagade Ventures Limited: N12,500,000. This covers letters of guarantee issued on 10th June, 1992 for h N7 million and N5.5 million on 27th July, 1992 approved by the accused and signed by him quite contrary to the rules given in evidence by PW1 and PW4, the rules and regulations in exhibits P8 and P9. The same i reasoning and decision regarding the tenor of guarantees viz., that it is a form of loan, earlier in this judgment apply here. There was no cash deposit or other security. A company with the type of account kept by this company cannot be a “most valued customer” of the bank to j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 141 a whom, according to the rules in exhibit 8, such facilities as guarantees were reserved by Group Merchant Bank Limited (see exhibits P8 and P9). We believe the prose- b cution witnesses that the rules have not been followed. Indeed, the guarantee crystallised, for the company did not honour its pledge to its debtors. Group Merchant Bank Limited had to pay for these grants which we hold c were unauthorised and against Group Merchant Bank’s rules. 3. Elsemco Textiles Limited: N4 million applied for on 26th May, 1991 and within accused’s powers but, without d waiting for documentation or appraisal, this was approved and without security. This was clearly contrary to the rules carefully outlined in the evidence of PW4 and in exhibits P8 and P9. e 4. Merchandise Mart Limited: N31,294,642.66. (i) Payments of various amounts making up this sum were approved at a time when the account of this company was in debit as shown in the batch of f documents admitted as exhibit P72, e.g. when a total of N19.73 million was approved. This is against the bank rules. (ii) No security obtained by the accused for the various g advances as required by the rules and credit policy of the bank. The various sums making up and their manner of grant and approval were shown in PW4’s uncontroverted evi- h dence as contrary to the procedure laid down in the credit policy manual and practice of the bank. These sums were approved and paid:– i 1. N19.73 million 2. N4 million 3. $10,000 pounds sterling from Group Merchant Bank’s London correspondent’s account j 4. N2,938,128.76 [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 142 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

5. N1.5 million a 6. N4.234 million 7. N400,000 8. N2.85 million b 9. N9 million 10. N856,000 Items 1, 3, 6 and 9 were indeed above accused’s lend- c ing powers. We find the charge relating to this company proved. 5. Heleena Farms Limited: N3,381,277, granted as shown in exhibit P76. d This account had debit balance of N5,340,105.38 as at 7th December, 1993 when the accused approved an overdraft of N281,277.39, quite against the rules. If any documentation and appraisal were made, according e to the rules the grant ought not to be made. Approval of a further sum of N3.1 million was made on the same date despite the fact that there was no formal request, no appraisal, no documentation, no security obtained. f All this is against the rules, although the sums were within the accused’s powers, the prosecution had testified that these formalities were required by the rules (see the evidence of PW4, the executive chairman of g Group Merchant Bank Limited and exhibits P8 and P9). The charge concerning this company has been proved. 6. Cobik Supply and Trading Company Limited: h N8,789,547 taken by way of overdrafts, not secured and approved by the board. Evidence given in respect of this company and the findings in count 12 are hereby adopted. i The charge concerning the above sum in respect of the company has been proved. 7. First City Fishing Company Limited: N913,947.49. This company also coming into count 13 had this sum j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 143 a approved by the accused as in count 12, without following the rules particularly those in exhibits P8 and P9 about advances and security. Exhibits P34 and P56 b clearly set out the position of this company. The advances were without security, contrary to those rules. 8. Positive Financial Trust Limited: The sum of N3 million, although within the lending power of the c accused, was without security. The approval was given by the accused contrary to the rules of the bank as given in evidence by PW4. 9. Textra Development Company Limited: As stated un- d der count 12, the facts and decisions therein also apply to this company. It deposited title deeds and it was decided to give the accused the benefit of the doubt in respect thereof. e 10. Reece Limited: The sum of N6,092,714.76 was involved and the transactions appear in exhibit P113. A guarantee, issued on the approval of the accused, crystallised and the sum debited to the account of Group Merchant Bank Limited in the beneficiary bank U.C.B. f Limited. As given in the evidence of PW4 accepted by the Tribunal:– (i) The grant was made when there was no operational current account for this company in Group g Merchant Bank Limited when the guarantee was issued. (ii) There was no collateral or any form of security. PW4 affirms and the Tribunal holds that the grant h was made without recourse to the rules and regulations. 11. Amalgamated Trustees Limited: N4.1 million. The findings and decisions in count 12 is adopted, also giv- i ing the accused the benefit of the doubt in respect of the issue of security. It is, however, noted that this amount is beyond the lending powers of the accused and contravenes the rules of the bank. The charge in j this count is proved against this company. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 144 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

12. F.D.B. Financial Services Limited: The sum involved a is N6,624,000. The facts accepted by the Tribunal have earlier been set out. Exhibit P96 shows the transactions:– b 1. In a manner hardly fitting with regular banking practice, approval is given for overdrafts to a company whose account is in debit. 2. On a sheet of paper N1.4 million was the sum c which the accused instructed staff to transfer to the account of this company, signed and dated it 19th February, 1992. PW4 testified that these were practices against the d rules of the bank. No appraisal, no documentation before the loans were granted, yet this was a company which hardly made lodgement in its account. e We find the charge proved in respect of this company. 13. K.I. Ogunlende (Loans): The amount involved is N11,850,732.30 being drawing from N12 million approved by the accused without authority as exhibit P85 f shows. The facts which the Tribunal accepts regarding this have been set out when summarising the evidence of PW4. No board approval. It is noted that this gentleman operates other accounts g in the bank: K.I Ogunlende (overdrafts), Reece Nigeria Limited and Textra Development Company Limited. (1) N12 million loan approved by the accused in De- cember, 1991. The sum is far beyond the powers h of the accused. The powers lay in the board and their approval was not obtained. (2) The Group Merchant Bank rules and regulations frown at loans to individuals (exhibit P9). The i C.B.N. Examination Report (exhibit P106) identified this on page 14 of his report as a contravention. The facility was therefore granted without authority and contrary to the rules. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 145 a 14. K.I. Ogunlende (Overdrafts): The sum involved came to a total of N24,556,974.71, approved by way of overdrafts. The breach of rules in respect of this b customer relates to approvals for further overdrafts given when the account was seriously in debit. This is brought out clearly by a perusal of exhibit P85 pages 40–43, 49, 59. When N16 million was approved c by the accused at page 72 of exhibit P85, there was a debit of N15,377 million in the account and when N17.668 million was the debit, more drawings were approved. Evidence shows that this is contrary to the d rules. The other breach is that the advance exceeded the lending limit of the accused and contrary to the rules, the approval of the board was not obtained. e The charge has been proved. 15. Savice Nigeria Limited: This company had an overdraft of N11,180,000 granted by the accused. f The breach identified was:– 1. No appraisal, no documentation; 2. no security, no cash collateral; g 3. grant made when account in debit. The evidence before the Tribunal was that every loan, or advance, whether below or above N4 million has to h go through the same process under the rules of the bank. The documents contained in exhibit P4 show that the rules were breached in respect of these companies’ advances. i The defence in this count, as in counts 2, 11 and 12 argued about the application of exhibit P9, the Credit Policy Man- ual. That issue has already been settled in those earlier counts, when it was decided that the manual applies. We j adopt our reasoning in respect of count 2 for this count. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 146 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The conclusion we reach in respect of count 13 then is that a the prosecution has proved its case, as required by law. The accused is found guilty. Count 14: Altogether 14 companies are concerned in this b charge, alleging that the accused had not taken all reasonable steps to secure compliance with the provisions of section 20(2)(a)(ii) of BOFID by Group Merchant Bank Limited which he managed in that, without prior approval in c writing of the C.B.N., the bank permitted to be outstanding as at 28th February, 1994 unsecured advances, loans and other credit facilities of an aggregate amount in excess of N50,000. d The total sum in respect of the 15 companies is N304,159,000 (including interests). It is necessary to observe that this count is akin to count 5 relating to Red Star Express in that they are charges under e the same section of BOFID which have been set out. The sections are section 20(2)(a)(ii) and section 46. The defence treated both counts 5 and 14 together in its submission. f What are the provisions not complied with? It is this, that without the prior approval of the C.B.N. in writing, the Group Merchant Bank “shall not permit to be outstanding any unsecured advances, loans or credit facilities to any g firms . . . or private companies which anyone or more of its directors is interested as director or any individual firm . . . or private company of which any of its directors is a guarantor”. h When some sifting out is done, it will be found that the same ingredients of the offence required in count 5 are to be established in count 14 and have indeed been established as follows:– i 1. That there is already proof that the accused was a director or officer of Group Merchant Bank Limited, a duly licensed Bank, being its managing director and chief executive and by the terms of his appointment he j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 147 a was responsible for the day-to-day management of the affairs of the bank. This was established in count 5 in particular and other counts; b 2. that the names of the directors of Group Merchant Bank Limited are in evidence and fully established; 3. that the names of the directors of the 15 companies are established by evidence which the Tribunal has c accepted and in each company, there are directors who are also directors of Group Merchant Bank Limited; 4. that these directors of Group Merchant Bank Limited who are directors of these companies are interested in d these companies as directors; 5. that the Central Bank of Nigeria Special Examination Report and the evidence of PW5, Richard Okodugba C.B.N. examiner, show that the C.B.N. did not give e any prior approval for any of the director-related facilities to remain outstanding; 6. that also the Special N.D.I.C. report establish that no such approval was given by the C.B.N.; f 7. that the various sums of money found advanced or loaned or for which credit facilities had been granted to these 15 director-related companies were unsecured. The accused mentioned (for the first time) that facili- g ties had been granted to directors. He admitted that they were unsecured when he said at the board meeting of 7th December, 1993 that the bank’s fundamental problem was that its loans were not being repaid . . . He asked directors whether they have assets they were h willing to use to secure the facilities granted them (see Minutes 22.1.13 and 22.1.14 in exhibit P10). All the sums including interest are as shown in their statements of accounts as at 28th February, 1994; i 8. that the total sum is in excess of N50,000. It is fully established under count 5; 9. that the accused, as the managing director and chief executive of the bank was, by his contract of employ- j ment the person who ought to take necessary action to [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 148 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

ensure compliance by the bank of the provisions afore- a said. It is obvious even to the managing director himself that that duty fell on him. For example, at the meeting of the board recorded on page 120 of exhibit b P10, minute 23.3 records, “managing director informed the board of the suspension of the bank from Foreign Exchange Market” (of course by C.B.N.). At page 122, minute 21.1.3, “the managing director gave the Board details of the bank’s position . . . the bank owes c N429 million to creditors . . .”; 10. that the facilities granted to all these 15 companies have been established to fall within the definition of advances, loans and credit facilities; d 11. in particular, that the C.B.N. Report (exhibit P106) clearly identified the contravention by the bank on pages 16–18. It identified unauthorised credit facilities e which include the names of these companies (Schedule III) and director-related overdue credit which include all the companies in count 14 (Appendix II), and said it accounted for 62% of the bank’s classified credits of N570,233,975; f 12. when the indebtedness of these companies including interest are added up the aggregate sum exceeds N50,000. g In the light of the foregoing, we come to the conclusion that the ingredients of the offence have been proved. The defence made the same submissions in respect of count 14 as in count 5. These have been addressed at length h under that count and our findings therein will only be adopted here. In conclusion, we hold that the prosecution has proved this count beyond reasonable doubt. i Count 15: This count accuses Mr Odebode with stealing N6.295 million contrary to section 390(7) of the Criminal Code, Cap 77 Laws of the Federation of Nigeria, 1990. He was said to have fraudulently caused the sum to be paid to j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 149 a the account of Car Link Limited, which sum belongs to Group Merchant Bank Limited. In the course of the trial of the accused, Chief F.R.A. Wil- b liams, S.A.N., for the defence, raised an objection to the jurisdiction of the Tribunal to try count 15. He addressed the Tribunal on this. The prosecution replied and the Tribunal adjourned the rul- c ing on this matter to another date while trial continued. Before the ruling could be delivered, Chief Williams informed the Tribunal that learned Counsel for both parties had agreed to let the ruling on the issue of jurisdiction be d taken along with the final judgment in the charge. The Tri- bunal noted this. In their written address both Emeka Ngige, Esq., and Chief Williams, S.A.N., re-addressed the issue and dwelt at length with it, citing authorities. e The summary of their submissions on this point has been set out earlier (supra) and the two issues raised by the defence will now be addressed. The issues were that the offence alleged against the ac- f cused is not an offence “relating to the business or operation of a Bank under any enactment”. (Therefore) it is the Attorney-General of Lagos State not the Attorney-General of the Federation who has the neces- g sary authority or competence to initiate criminal proceedings against a person alleged to have committed an offence such as the one charged. The premise for this submission includes:– h (i) the enactment in section 390(7) is an enactment relating to the offence of stealing; (ii) the attachment of special punishment for directors or other officers of companies who steal company i property does not convert the subsection . . . to an enactment concerning offences relating to the business or operation of companies or a bank. Learned Senior Advocate submitted that the case of Akwule j v. The Queen (1963) N.S.C.C. Volume 1 157 or (1963) [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 150 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

N.R.N.L.R. 105, decided by the Supreme Court, is judicial a authority showing that section 390(7) of the Criminal Code is state law. He cited other authorities. The learned Counsel for the prosecution countered that b stealing is both Federal and State Laws, drawing attention to the effect of section 2(1) of the Constitution (Suspension and Modification) Decree No. 107 of 1993 which confers on the Federal Government powers to legislate on any subject c whatsoever. He made other submissions. It appears to this Tribunal, however, that the crux of the matter here is to find what the law maker had in mind when he enacted section 3(1)(b), (c) and (d), particularly 3(1)(d) of d the Failed Banks . . . Decree which confers jurisdiction on this Tribunal. The issue is, can the offence of stealing charged in this particular case under section 390(7) be said to be an offence relating to the business or operation of a bank under an enactment and triable by this Tribunal. e The question in our view cannot be answered in isolation; it depends on the facts of each case. What is an offence “relating to the business or operation of a bank”? f “Relating to” is a vital phrase: what is its meaning. “Busi- ness or operation of a bank under any enactment” is another important phrase: what is its meaning? g The sections of the law under which the charge is laid are sections 383 and 390(7) which together show that this is a charge on “special case” stealing relating to a director or officer of a corporation or company. There is no doubt that Group Merchant Bank Limited is a company. It is a bank too h (I took the phrase “special case” from the title “Punishment in special cases” in section 390 of the Criminal Code, preceding the subsections.) The word “relate” is defined by Black’s Law Dictionary, i (revised 4ed) page1452 thus:– “To stand in some relation to have bearing or concern, pertain, refer; to bring into Association with or connection with; ‘Related’ means: standing in relation; connected, allied, akin.” j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 151 a To answer the question, whether the offence in count 15 can be said to relate to the business of a bank, the antecedents of this charge must be looked at vis-à-vis other counts. b The 15-count charge in Charge No. FBT/EZ/01c/95 came before this Tribunal after Group Merchant Bank Limited had failed. The Central Bank of Nigeria had initiated proceedings to take it over, for the price of N1. See the evidence of c PW1. In summary, it can be said that counts 1–15 charge the accused with financial malpractice in the bank, or that he mis- managed the funds of the bank in a manner which led to its d failure. The various acts and deeds he did while managing the bank and performing various things relating to the business of the bank were being complained of. Among the deeds was granting of unsecured loans, granting of ad- e vances, loans and other credits to persons without credit, granting of advances, loans and credit facilities to companies in which he had interest as director and/or shareholder. Hyperion Finance and Investment Limited is named as one f of the companies. In connection with it, the series of acts of the accused done in relation to the business of the bank were being complained of (see each count in the charge and especially counts 7, 9, 10 relating to acts relating to Hyperion). g The act charged about Hyperion were done during the accused’s tenure as managing director of the bank with the other acts relating to the business of the bank, Group Mer- chant Bank Limited, charged in counts 7, 9 and 10. h That in our view is sufficient reason to hold that the same acts charged in count 15 relate to the business of a bank. The reasoning can be taken further. It is observed that counts 7, 9 and 10 are charged under BOFID which, it may be argued, i was specifically named in the Failed Banks . . . Decree as one of those, the offences under which this Tribunal has jurisdiction to try. But it is important to realise that BOFID is named because j anything done under it also qualify to be described as [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 152 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. offences relating to the business or operation of a bank un- a der an enactment. We hold this view because of the use of the word, “other” in section 3(1)(d). This surely shows that what went before b 3(1)(d) via 3(1)(b) and 3(1)(c) are some “offences” also relating to the business or operation of a bank. Then section 3(1)(c) can be said to be a “rounding off” section which tries to incorporate species of similar kind as those that went be- c fore in section 3(1)(b) and 3(1)(c). This is what the “ejusdem generis” rule is all about. That rule enunciates that, “where a particular class is spo- ken off, and general words follow, the class first mentioned d is to be taken as the most comprehensive, and the general words treated as referring to matter ‘ejusdem generis’ with such class”. Lord Halsbury, L.C., in Thames Mersey Marine Insurance Company v. Hamilton (1887) 12 A.C. 484 at 490 put it thus:– e “. . . two rules of construction now firmly established . . . one is that words, however general, may be limited in respect to the subject matter in relation to which they are used. The other is that general words may be retracted to the same genus f as the specific words that precede them.” See also The Construction of Deeds and Statutes by Sir Charles B. Odgers (4ed) 133–135. Once the rule is applied, it is clear that the acts for which the accused is charged in g the other counts are similar acts of malpractices and mismanagement of the funds of a bank in the course of the accused’s services “relating to”, or “connected with”, or concerned with the business of a bank, Group Merchant Bank h Limited. The submission about “banks” and “banking” being on the Exclusive Legislative List since the Constitutions Order in Council of 1954, and yet section 390(4) of the Criminal Code was decided to be a State Law in the Queen v. Azu A. i Owoh and others (1962) All N.L.R. 563 (New Series Part 2) and section 390 in Akwule and others v. The Queen (1963) N.S.C.C. Volume 157 or (1963) N.R.N.L.R. 105 are subject to all the circumstances of each case. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 153 a If it can be established that the form or facts of the type of stealing shows that it was done in relation to “the business of operation of a bank”, then the matter would come within b section 3(1)(d). On the other hand, if it is stealing simpliciter, without qualifications the submission of the defence may hold ground. There have been new enactments since the above two c cases were decided. The Republican Constitution of 1963 has been replaced by the 1979 Constitution, some of whose provisions were scooped off by the Constitution (Suspension and Modifica- tion) Act, 1983 etc. The Banking Act of 1969 has been re- d placed by BOFID in 1991. The N.D.I.C. Decree came into operation in 1988, and now the Failed Banks . . . Decree, 1994 has come into force. Many changes have occurred which must of necessity cause a re-alignment to meet the e application of the new Constitution and statutes. It is in this way we viewed the submissions. We have also recognised what was correctly pointed out by the learned prosecutor concerning constitutional changes, caused by f military take-over of Government. In one swoop, they virtually turned the Constitution into a unitary, rather than a Fed- eral one, by the Constitution (Suspension and Modification) Act, 1983 etc. g There are provisions therein vesting the Federal Military Government with absolute powers to make laws with respect to any matter whatsoever. And another enacting that there shall be no question as to the validity of any Act or law not h inconsistent with the provisions of an Act, and that the provisions of an Act, shall prevail over those of the unsus- pended provisions of the Constitution etc. (see Cap 137) of 1990. i Thus it is not the same laws or Constitutions that now apply as did when the following were decided: Owoh’s case; Akwule’s case; Daboh’s case of (1977) All N.L.R. (2ed) 146; or Williams’s case of (1978) N.S.C.C. Volume 11 38 (cited by the defence). All these are good law with reference j to the laws and constitution applicable at the time. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 154 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

In the ruling of this Tribunal delivered on 8th January, a 1996 in the defence’s application for bail, it had come to the conclusion that the Failed Banks . . . Decree could be said to be re-enacting the various provisions in the offences created b by the statutes in section 3(1)(b), (c) and (d). We have no cause to differ from that view. It appears to us that the Failed Banks Decree would be incorporating any laws such as section 390(7) of the Criminal c Code when the Federal Military Government is exercising its powers under Cap 137 to even make laws “on any matter whatsoever”. The assertion about the Attorney-General of the Federation d not having powers to initiate prosecutions on enactments made by the legislature of a State only holds good when an accused is charged under State laws, in State courts. The argument of the defence as to whether the offence in e count 15 is an offence “relating to the business or operation of a Bank . . .” began to sound rather academic when we now re-read after many years the case of Akwule v. The Queen. That case was regarded as a locus classicus in law f school circles when the judgment was delivered in 1963. The argument based on The Queen v. Owoh and Akwule and others v. The Queen to show that the offence of stealing g in the Criminal Code is a State law leaves dangling the following obvious legal situations implicit in our laws and some arising from the change in the Constitution:– (1) Since the decisions were made, for example there are h the provisions such as that in section 274 of the Con- stitution. (2) The 1990 Laws of the Federation now incorporating the Criminal Code has re-established it as Federal i Law by powers given the Law Review Committee. (3) There is the Failed Banks Decree. (4) Decree No. 21 of 1990 in Volume 1 of the Laws of the Federation of Nigeria, 1990. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 155 a The application of these laws quickly cause the advertised effect of the two Supreme Court cases to recede to the background in the context of this case. b The Law Revision Committee derived its powers from section 274(2) and (4) of the Constitution and pursuant to this has power to insert the Criminal Code as one of the laws within the power of the Federal Government to make. See c also the definition of “existing law” in section 274(4)(b) of the Constitution. All these must be put together, side by side with the submission by the defence. The effect is that the defence is neu- d tralised. The conclusion we come to is that a charge of stealing, brought under the Criminal Code, can be initiated by the At- torney-General of the Federation, without recourse to the e Attorney-General of a State (see section 160 of the Constitu- tion). It can be tried under section 3(1)(d) of the Failed Banks . . . Decree. The objection to jurisdiction is therefore hereby overruled. f We now come to the issue of proof of the offence charged in count 15. In their submission, the prosecution have set out the ingredients of the offence which they ought to and did prove. g They urged the Tribunal to find the accused guilty as charged. As an alternative to the submission on the issue of jurisdiction, the defence has called on the Tribunal to consider h whether the prosecution has proved a case of stealing against the accused. They state that this was premised on the Tribu- nal rejecting the submission on jurisdiction. The aspect of the proof which the defence submits that the prosecution had i not proved is that the accused had any intent to defraud the Group Merchant Bank. This, it was submitted, had to be proved before the accused can be convicted of stealing. It was submitted that considering that one major business j of a bank is lending money to customers or other borrowers, [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 156 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. it was not enough to prove merely that the accused had lent a or sanctioned the lending of money to a borrower. It must be proved in addition that he made the bank’s money available to a customer or borrower with a fraudulent intent. One of b the ways of showing fraudulent intent is by demonstrating that there was no genuine lending or any intention that the borrower would repay the money or by demonstrating that no interest was charged or that the interest charged was ridiculously below the market rate. c It seems to the Tribunal, with respect, that some of the premises of the submission set out above did not get the facts of this sum of N6.295 million as given in evidence d right. Hyperion Finance and Investment Company Limited, a company in which there was overwhelming evidence and admitted by the accused that he, the accused had substantial interest in, was never a customer of the bank. The accused e and his wife were the only directors and shareholders as documentary evidence show in exhibits P24, Particulars of Directors, and P118, Return of Allotments. On 2 October, 1992 the accused wrote an internal memo f (exhibit P99) to his subordinate bank staff Kerry Oyakhire I.G. titled “Car Link Limited”. It stated “Please credit the account of Car Link with N6,295,000 and debit Sundry Deb- its Operations Account. A facility is being processed for g Hyperion Finance and Investment Company Limited which I will approve when I come back.” The accused signed it. The instructions were obeyed as shown in the advice to Car Link Limited (exhibit P99(11) and statement). It turned out that h Hyperion Finance and Investment Company Limited had purchased 30 units of Hyundai Excel and five units of Hyundai Elantra from Car Link Limited for the sum of N6,295,000 million for which this payment was made, as shown on exhibit P99(1) Pro forma invoice of 2nd October, i 1992 issued by Car Link Limited to Hyperion Finance and Investment Company Limited. No facility, PW4 testified, was ever processed for Hyperion Finance and Investment Company Limited as stated in exhibit P99 which had no j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 157 a account with the bank and none was being processed then or processed afterwards. Then confronted by the bank in their letter of 21st October, b 1994 (exhibit P101), the accused replied by exhibit P102 of 27th October, 1994, “the payment of N6,295,000 to Car Link Limited on behalf of Hyperion Finance and Investment Company Limited was an I.O.U. I took . . . This I.O.U. had c again been settled”. In his oral evidence PW4, the executive chairman of Group Merchant Bank Limited testified that to the best of his knowledge, there was no correspondence between his bank, Group Merchant Bank Limited, and Hype- d rion Finance and Investment Company Limited. Thus it was not a question of a customer and his bank or of borrowing and lending as this company is not a customer. No application or request for a loan was submitted by it. To e Car Link Limited, Group Merchant Bank Limited, on the instruction of the accused, simply paid its bill from the bank’s Sundry Debit Operations Account. The accused claims he paid back and the defence picks on PW4 and the f prosecution for not producing evidence that he had paid. Now that the defence has raised the issue, the Tribunal considered it. It has to be pointed out that the story of the transaction, the g particulars and all matters were within the knowledge of the accused. It is recalled that when pressed for an answer in cross-examination by the defence, about whether repayment had been made, PW4 stated that the accused said so but h added: “I don’t know that it was paid back with interest.” Watching the demeanour of the witness when answering this question, it was as if he was prepared to take the word of the accused for it though there was no proof. When asked i if he was aware of all director-related debts owed to Group Merchant Bank Limited, witness said he was aware of all except Hyperion Finance and Investment Company Limited. The question arises from the submission of the defence as j to evidence of repayment. As stated earlier, these are matters [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 158 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. within the knowledge of the accused. He asserts that he has a paid, when, how, any interest he did not say. On the basic principle of the law of evidence is that he who asserts must prove. Thus, if the accused said he had paid, the b onus was on him to prove it. Section 142 of the Evidence Act also provides that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him. We would state c with respect that the learned Senior Advocate for the defence was quite right when he said that the onus is on the prosecution to prove its case for stealing against the accused beyond reasonable doubt, but, in view of the state of the law d set out above, the onus of proving payment lies upon the accused, who asserts it. Again the premise for the assertion by the defence that the name of Car Link Limited or Hyperion Finance Company e was not on the list of debtors put forward by the Central Bank in exhibit P106 has also not been based on the facts of the case given by the prosecution witnesses. Car Link Lim- ited was never identified as Group Merchant Bank Limited’s f debtor vis-à-vis the Hyperion Finance issue of N6.295 million, paid from the Sundry Debits Account, nor would Hyperion Finance and Investment Company Limited appear when it was no customer, did not have dealings or any correspondence with Group Merchant Bank Limited. In the light of g this we could not understand the fault being found with exhibit P106. When we had a further look at exhibit P106, we indeed found that the Schedule which is IX to the Report at page 45 h is titled: “Schedule of other known losses as at 30th April 1994.” This is the schedule that reflects the statement in line 6 on page 40 referred to by the defence. This title clearly shows that the list is not exhaustive as it deals with “known i losses” as at particular date. There is nothing in exhibit 106 to suggest repayment by anybody or the relevant Schedule. We reiterate that the onus of proving repayment lies on the accused who asserts same. He has not discharged it. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 159 a It is necessary to state also at this point that, notwithstanding the fact that the evidence of the prosecution witness were uncontroverted, this Court took time to examine it b carefully, to ensure that t met the standard of proof beyond reasonable doubt, set by our laws. Much of the evidence was documentary, consisting of official C.B.N. and N.D.I.C. reports, records of the bank; of the Corporate Affairs Commis- sion; some documents and internal memos bearing the ap- c proval and signature of the accused etc. They weighed heavily in our decision. They could hardly be faulted. On the issue of intent to defraud which it was decided to d take as the final point in the submission on this count, it seems to us that the following circumstances relating to the removal of the N6.295 million from the funds of the bank by the accused must be noted. e The internal memo written by the accused and the authorising of the taking of the money was unlawful. Its contents of processing facilities for Hyperion were untrue. Then is the fact that Hyperion is not a customer of Group Merchant f Bank Limited, the accused did not go through the process of bringing this matter of his interest in Hyperion Finance and Investment Company Limited or any advances or credit facility, to the board of Group Merchant Bank Limited as required by law. Even when he, as managing director, was re- g porting the very precarious situation of the bank to the board, late in 1993 and it was decided by the board that every director must get his company or his person to pay up, the accused did not mention Hyperion Finance and Invest- h ment Company Limited or himself or any of his companies. The above facts cannot be evidence of lawful intentions. We found as a fact from the evidence of the witness that the irregular grants made by the management led by the ac- i cused who approved them and money taken out of the bank by way of unauthorised, unsecured and unlawful transactions by the directors, including the accused, led to the si- phoning away of depositors’ funds and the failure of Group j Merchant Bank Limited. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 160 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The acts listed above and the circumstances leave one in a no doubt that the sum of N6.295 million, not authorised by anyone, and taken for no purpose of the bank, was fraudulently removed. The accused said he took but put it back. b The learned prosecutor put the law correctly when he said that once the initial taking of the thing stolen was unlawful, it was immaterial that the accused intended to return it (see section 383(2)(f) of the Code). If it was a borrowing as his c Counsel suggests, where are the documents? If I.O.U. as the accused stated, where are the documents? When did he repay and how? The prosecution in our view has proved its case beyond all d reasonable doubt in count 15. The accused is found guilty in all 15 counts charged.

SENTENCE e Before proceeding to pass sentence on the accused person in this matter, this Tribunal considers it its duty to set out clearly its view regarding the procedures being adopted by the learned defence Counsel Chief F.R.A. Williams, S.A.N., f after judgment was delivered in this charge on 29th March, 1996 under the guise of plea for mitigation of sentence. Af- ter judgment was delivered on 29th March, 1996, the learned defence Counsel applied for an adjournment to another date g for sentence so as to come back because he was then too tired on that day to plead for mitigation on behalf of his client who had been found guilty of the charges against him. Secondly, the learned Senior Advocate considered it of ut- h most importance that this Court should know the true facts which could affect sentence. From the bar that day, surprisingly the learned Senior Advocate proceeded to state facts which were never given in evidence before the Tribunal. These facts relate to N6.295 million which the accused was i charged and found guilty of stealing in count 15. The Tribu- nal, however, obliged the learned Senior Advocate and adjourned the matter till today, 12th April, 1996 to enable him to come back to make a plea on behalf of the accused. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 161 a This morning, 12th April, 1996, shortly before the Tribunal was to commence sitting, a document filed by the defence the previous day, 11th April, 1996 was placed before me. It b was titled “NOTICE ON WHICH the accused PERSON INTENDS TO RELY for a plea in mitigation of sentence. Going through this, and also considering the statement of the learned Senior Advocate from the Bar on 29th March, 1996, it was found to contain facts and figures relating to the sum c of N6.295 million referred to above. There was also a letter dated 9th March, 1996 (copied to the Secretary to the Tribunal) written by Chief F.R.A. Wil- liams, S.A.N., to PW4 pointing out figures and listing docu- d ments which the accused Mr Odebode now wants PW4, the executive chairman of the bank, to now look for after judgment and where to find them. This was to unsever evidence that Odebode found guilty in its judgment of 29th March, e 1996 of stealing the sum in 1992 put it back in 1994 (after the collapse of the bank by the end of 1993). All these relate to information and evidence which this Tribunal had held in its judgment were in the possession of the accused and he had failed to produce them in evidence before the Tribunal. f The above and the entire documents in our view set out to make this Tribunal sit on appeal against its own judgment. That is totally contrary to the provision of the law. This Tri- bunal has become functus officio after delivering its judg- g ment. Secondly, the documents set out to re-open the proceedings to enable the defence lead evidence they refused to lead in respect of a matter upon which this law Court has already h made findings and given judgment based on the evidence placed before it. All parties to these proceeding before these findings were made, had been given every opportunity by the Tribunal as the records show to lead evidence and call i witnesses in accordance with the provisions of the law, the Failed Banks Decree, Rules of Procedure of Offences Before the Failed Banks Tribunal (see Schedule 2 of the Decree No. 18 of 1994). It is also quite against the provisions and traditions of the law to so re-open a case and to canvass j anew issues which had been canvassed on oath or not can- [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 162 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. vassed purposely at the trial, as the records show. It was for a the above reasons orally stated earlier this morning that this Tribunal also state that this was not permissible, saying that the matter ought now to go to the Appeal Tribunal not this b Tribunal any longer. I did then announce that we would proceed to listen to the defence’s plea in mitigation of sentence without the “notice” after which we would consider and pass sentence. I then also pointed out that this matter must come to an end and not to be dragged on any further. c Thereafter Chief Williams, S.A.N., addressed the Tribunal as set out in these records. We have carefully considered the issues raised in his written notes and additional oral submission in his plea for mitigation of sentence. The defence has d pleaded that counts 1–4 are charges which qualify for a fine. They are each a fine or a term of imprisonment. The Tribu- nal’s attention was drawn to the sentence passed by the Kano Zone on another director of the bank, Mr Christopher e Anyagbunam. We have carefully considered the guidelines in the written notes and additional oral submission and taken these into account. We have also taken into account the following facts:– f Like Mr Christopher Anyaegbunam (whose case Chief Williams raised here), the accused herein was a director, but unlike Christopher Anyaegbunam, he was also the managing director and chief executive of the bank, managing its affairs g from day to day, administering the bank and unlawfully approving all the transactions for which he was found guilty. We have also taken into account the effect of all these in- fractions of the law on the bank which has failed and the h huge losses thrust on the bank and the losses of depositor’s funds etc. in the bank that has failed due to the action of Mi- chael Odebode, the accused herein. We now pass the following sentence:– i Count 1 = N50,000 fine. Count 2 = 1 year imprisonment. Count 3 = N50,000 fine. Count 4 = N5,000 fine. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Federal Republic of Nigeria v. Michael Oladisun Odebode 163 a Count 5 = N5,000 fine. Count 6 = N5,000 fine. Count 7 = N5,000 fine. b Count 8 - Cautioned and discharged. Count 9 = N50,000 fine. Count 10 - 1 year IHL. c Count 11 = N100,000 or 1 year IHL. Count 12 - 1 year IHL. Count 13 - 1 year IHL. Count 14 - 1 year IHL. d Count 15 - 2 years IHL The fines are cumulative, the terms concurrent. The accused will therefore pay a total sum of N270,000 e and serve on the whole two years’ imprisonment (of the eight years). It is further ordered that the vehicles kept with the accused on bond by the police (to be produced when required) shall so remain on bond till some legal decision is reached to ascertain for what amount the accused may in- f demnify the bank against losses arising out of the unsecured advances, loans, or credit facilities in counts 11–13. This is however without prejudice to the bank liquidators or the bank’s obligation or rights to proceed against all or any g other directors who may be considered liable to indemnify the bank jointly or severally with the accused pursuant to section 20(6) of BOFID. This Tribunal does not consider itself in the present case in a position to determine this issue h of the extent of indemnity and will not make the order urged by the prosecution. The foregoing is the sentence and order of the Tribunal. [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

164 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Kurt Adolph GMBH v. Central Bank of Nigeria FEDERAL HIGH COURT, LAGOS DIVISION JINADU J b Date of Judgment: 12 APRIL 1996 Suit No.: FHC/L/CS/1196/94 Banking – Action against Federal Government, Central Bank or officers – Reliance on section 49(1) Banks and Other Financial Institutions Decree No. 25 of 1991 as de- c fence – Onus to prove “Good faith” therein – Who on – Sec- tion 147 Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990 Banking – Section 49 Banks and Other Financial Institu- d tions Decree No. 25 of 1991 – Purport of – Whether ousts the jurisdiction of court

Facts The Plaintiff claimed against the defendant the sum of e DM70,849,40 being the total value of goods supplied by the plaintiff to several Nigerian importers in reliance on the defendant’s negligent misstatement as contained in its form “M” to the effect that there was sufficient foreign exchange f available to cover the importers’ orders from the plaintiff. The defendant filed a motion on notice pursuant to Order 27 of the Federal High Court (Civil Procedure) Rules praying the court to strike out the suit on the ground that the g court lacks jurisdiction to entertain it because section 49 of Banks and Other Financial Institutions Decree No. 25 of 1991 ousted the jurisdiction of the court since in doing all that the plaintiff had alleged against the defendant, the defendant was acting in pursuance of the powers and functions h vested and conferred on it by that Decree and the Central Bank of Nigeria Decree No. 24 of 1991. The said application was filed after the defendant had filed its defence. i Section 49(1) of the Banks and Other Financial Institutions Decree No. 25 of 1991 reads:– “49(1) Neither the Federal Government nor the Bank nor officer of that Government or Bank, shall be subject to any j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

Kurt Adolph GMBH v. Central Bank of Nigeria 165 a action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution of, or connection with the execution or intended execution of any power con- b ferred upon that Government, the Bank or such officer, by this Decree. (2) For the purpose of this section, the Minister or any officer duly acting on his behalf shall be deemed to be an c officer of the Federal Government and the Governor, any Deputy Governor of the Bank or other employee thereof or any person holding any office therein or appointed by the Bank under subsection (2) of section 32 of this Decree shall be deemed to be an officer of the d Bank.” Held – 1. The provisions of section 49 of the Banks and Other Fi- nancial Institutions Decree do not oust the jurisdiction of e the court but rather provides a valid defence for the defendant from any adverse claim against it and this defence can only avail the defendant if the defendant’s acts are done in good faith. f 2. By virtue of section 147 of the Evidence Act a defendant relying on section 49 of the Banks and Other Financial Institutions Decree as defence has the responsibility of proving that the acts were done in good faith. g Application dismissed. Cases referred to in the judgment h Nigerian A.G. of Federation v. Sode (1990) 3 S.C.N.J. 14 A.G. of Lagos State v. Dosunmu (1989) 6 S.C.N.J. (Part 2) 153 i Aina v. The Trustees Nigerian Railway Corporation Pension Fund (1970) 1 All N.L.R 281 Anya v. Iyayi (1993) 7 N.W.L.R. (Part 305) 290 Foko v. Foko (1968) N.M.L.R. 441 at 444 j Inoma Biriye v. Omoni (1989) 5 N.W.L.R. (Part 119) 60 [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

166 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Odiwe v. Obor (1974) 1 All N.L.R. 436 a Wuraola v. Northern Assurance Co (1967) N.M.L.R. 31

Nigerian statutes referred to in the judgment b Banks and Other Financial Institutions Decree No. 25 of 1991, sections 2, 49 Evidence Act, Cap 112 Laws of Federation of Nigeria, 1990, section 147 c Counsel For the defendant/applicant: Adesanmi Kayode For the plaintiff/respondent: d Judgment JINADU J: In the particulars of claim the plaintiff claims:– “(a) The plaintiff’s claim against the defendant is for the sum of DM670,849.40 (Six Hundred and Seventy Thousand, Eight e Hundred and Forty-Nine D/Marks, Forty Fenning) being the total value of goods supplied by the plaintiff to several Nigerian Importers in reliance on the defendant’s negligent misstatement as contained in its Form ‘M’ to the effect that f there was sufficient foreign exchange available to cover the Importers’ order from the plaintiff. (b) Interest on the said sum of DM670,849.40 at the rate of 35% until the total liquidation of the debt. (c) The plaintiff also claims the cost of this action.” g The defendant brought this motion on notice praying for the following orders:– “(a) An order striking out this suit on the ground that this Hon- ourable Court lacks jurisdiction to entertain it because sec- h tion 49 of Banks and Other Financial Institutions Decree No. 25 of 1991 ousts its jurisdiction since in doing all that the plaintiff has alleged against the defendant in the statement of claim the defendant was acting in pursuance of the i powers and functions vested and conferred on it by that De- cree and Central Bank of Nigeria Decree No. 24 of 1991. (b) And for such further or other orders as the Honourable Court may deem fit and just to make in the circumstances of the case.” j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Jinadu J Kurt Adolph GMBH v. Central Bank of Nigeria 167 a There is a three-paragraph affidavit in support. The learned Counsel for the defendant who moved the application relied on the three-paragraph affidavit in support. He submitted b that it was never in dispute that the act of the Central Bank of Nigeria (henceforth to be referred to as “C.B.N.”) which the plaintiff complained about has been done pursuant to the powers and functions conferred upon it by statute, that is, the Central Bank of Nigeria Decree No. 24 of 1991 and the c Banks and Other Financial Institutions Decree No. 25 of 1991. He submitted that in the exercise of these statutory powers, section 49 of BOFID insulates C.B.N. from any action in court. He submitted that by that section C.B.N. is in- d sulated from any action while acting by virtue of the power conferred on it by the C.B.N. Decree and BOFID. He submitted that the words of these statutes are very clear and unambiguous and that they expressly oust the jurisdiction of e this Court over this matter and that they must be strictly construed. He referred to A.G. of Lagos State v. Dosunmu (1989) 6 S.C.N.J. (Part 2) 153 ratio 7 per Oputa JSC. He said one may ask what is the purport of an ouster clause and f he submitted that the purport is that the court must not look into what the statute forbids it to look into and must close its eyes to it. He referred to A. G. of the Federation v. Sode and others (1990) 2 S.C.N.J. 14 ratio 2 line 26. g In reply Mr Kayode for the plaintiff submitted that Order 27 which the defendant relied upon for this application had the implication that all the averments contained in the statement of claim were deemed to have been admitted by the h defendant and those facts were therefore uncontroverted. He submitted that the provisions of section 49 of BOFID were exclusive in themselves and did not relate to other laws. He also submitted that the inclusion of C.B.N. Decree No. 24 of 1991 in defendant’s application should be discountenanced i since it was the provisions of section 49 of BOFID that the defendant said ousted the jurisdiction of the court and that section 49 referred only to actions taken under BOFID alone. He referred to Anya v. Iyayi (1993) 7 N.W.L.R. (Part j 305) 290 at 316. He submitted further that the purport of [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Jinadu J 168 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. section 49 of BOFID was not to oust the jurisdiction of the a court. He then asked, assuming but not conceding that the provisions of BOFID applied to this case, did section 49 of BOFID oust the jurisdiction of this Court? He referred to b Kotoye v. Saraki where it was stated that where there was an ouster clause it should be interpreted strictly. He referred to Anya v. Iyayi (supra). He submitted that, since section 49 mentioned good faith, then the section did not oust the jurisdiction of the court. He then referred to the provisions of c section 7 of Decree No. 60 of 1991 which conferred jurisdiction on this Court to hear certain matters. He referred particularly to section 7(e). Learned Counsel then argued that this application could not be made now by the defendant af- d ter it had filed its statement of defence as the filing of a statement of defence meant that the defendant had joined issues with the plaintiff on the allegations contained in the statement of claim. He referred to Aina v. The Trustees Ni- e gerian Railway Corporation Pensions Fund (1970) N.S.C.C. 229. Learned Counsel submitted that this Court had jurisdiction to entertain this claim and that it was too late in time for the defendant to bring an application under Order 27 of the f Federal High Court (Civil Procedure) Rules, 1976. In his reply on point of law the learned Counsel for the defendant submitted that the admission of the allegations contained in the statement of claim was limited for the purposes g of this application. He submitted that section 49 of BOFID was restricted to that Decree. He referred to section 2 of BOFID to the effect that BOFID incorporated the C.B.N. Decree directly. He referred to Wuraola v. Northern Assur- h ance Co (1967) N.L.M.R. 31 where it was stated that a statute can incorporate another statute by reference. On good faith he submitted that the plaintiff did not allege bad faith and that where the plaintiff even alleged bad faith the onus i was on him to prove it. He said if section 49 of BOFID was construed it will be seen that there is a presumption of good faith. He disagreed with the submissions of the learned counsel for the plaintiff that this application was belated as nowhere in Order 27 was it stated that a demurrer must be j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Jinadu J Kurt Adolph GMBH v. Central Bank of Nigeria 169 a raised before a statement of defence was filed. He also submitted that the issue of jurisdiction was very fundamental and it could be raised at any time of the proceedings. He b urged the court to strike out the suit. I am in complete agreement with the learned Counsel for the plaintiff that a defendant intending to rely on the provisions of Order 27 of the Federal High Court (Civil Proce- c dure) Rules, 1976 which is an application in the form of a demurrer must not have filed a statement of defence by which issues were joined with the plaintiff. Therefore, a defendant proposing to come under that order for a dismissal of the suit must file the application after the filing of the d statement of claim but before filing a statement of defence. In Odiwe v. Obor (1974) 1 All N.L.R. 436 it was held that the principle of demurrer is that this must be raised before issues were joined, that is, after the statement of claim had e been filed but before filing the statement of defence (see also Foko v. Foko (1968) N.M.L.R. 441 at 444). This is because a demurrer is an allegation by the defendant, which, admitting the matters of fact alleged by the complaint or bill f to be true, shows that as they are there set forth they are insufficient for the plaintiff to proceed upon or to oblige the defendant to answer. In effect, it is an allegation that, even if the fact as stated in the pleadings to which objection is g raised is taken to be true, yet their legal consequences are not such as to put the demurring party to the necessity of answering them or proceeding further with the cause. See the Court of Appeal case in Inoma Biriye and others v. Omoni and others (1989) 5 N.W.L.R. (Part 119) 60. See also the h Supreme Court case in Aina v. Trustees of N.R.C. (1970) 1 All N.L.R. 281 where it was held that the whole basis of a demurrer is in effect to short circuit the action or by a preliminary point of law to show that the action cannot be i maintained. On this point therefore this application is misconceived and is therefore not properly before this Court and it ought to be struck out. With respect to the submissions that the provisions of sec- j tion 49 of the Banks and Other Financial Institutions Decree [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Jinadu J 170 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

No. 25 of 1991 ousts the jurisdiction of this Court, I do not a agree with the submissions. I have read the provisions of section 49 of BOFID, 1991 which provides:– “49(1) Neither the Federal Government nor the Bank nor offi- b cer of that Government or Bank, shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution of, or connection with the execution or intended execution of any power con- c ferred upon that Government, the Bank or such officer, by this Decree. (2) For the purpose of this section, the Minister or any officer duly acting on his behalf shall be deemed to be an d officer of the Federal Government and the Governor, any Deputy Governor of the Bank or other employee thereof or any person holding any office therein or appointed by the Bank under subsection (2) of section 32 of this Decree shall be deemed to be an officer of the e Bank.” I am of the view that rather than ousting the jurisdiction of the court the section provides a valid defence for the defendant from any adverse claim against it and this defence can only f avail the defendant if the defendant’s acts are done in good faith. I also hold that it is the responsibility of the defendant to prove that the acts were done in good faith. See the provisions of section 147 of the Evidence Act, Cap 112 Laws of g the Federation of Nigeria, 1990 which provides thus:– “147. Where there is a question as to the good faith of a transaction between parties, one of whom stands to the other in a position of active confidence, the burden of proving the good faith of the transaction is on the party who is in a h position of active confidence.” I am also of the view that the provisions of section 49 BOFID, 1991 does not purport to oust the jurisdiction of the court; therefore the question of the canon of construction to i apply in its interpretation does not arise. Having held that this application was brought belatedly because the defendant has joined issues with the plaintiff and also that the jurisdiction of this Court is not ousted by j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Jinadu J Kurt Adolph GMBH v. Central Bank of Nigeria 171 a the provisions of Decree No. 25 of 1991, I hold that this application is frivolous, vexatious and an abuse of the process of the court. It is hereby dismissed with N200 costs to the plaintiff. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

172 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Federal Republic of Nigeria v. Mallam S. Bello Abubakar SPECIAL APPEAL TRIBUNAL, LAGOS ZONE b AGBAJE J, BALONWU, S.A.N., ODUNLAMI J Date of Judgment: 16 APRIL 1996 Suit No.: SAT/MO/240/95

Banking – Brokerages – Payment of brokerages by bank – How done c Criminal law and procedure – Stealing – Money meant for payment of brokerages found in employee’s private account – Effect – Section 383(2)(f) Criminal Code – Duty of Trial Tribunal to return verdict of guilty or not guilty – Failure to d do so – Rules 8 and 9 Schedule 2 Failed Banks Decree No. 18 of 1994 (as amended) – Section 20(5) of Decree – When Trial Tribunal can have recourse to – Sentence – Trial Judge deeming it necessary not to impose sentence by virtue e of section 20(5) of the Decree – Necessity to indicate expressly or by necessary implication in judgment that it is equitable so to do – Institution of criminal proceedings under Failed Banks Decree No. 18 of 1994 (as amended) – Of- f fences charged relate to state offences – Competence of At- torney General of the Federation or any authorised person to institute proceedings – Source of – Sections 24(2), 28 Failed Banks Decree No. 18 of 1994 (as amended) g Failed Banks Tribunal – Jurisdiction of in criminal matter – Bank not adjudged a failed bank – Whether Tribunal can entertain – Section 3(1)(a) Failed Banks Decree No. 18 of 1994 (as amended) h Facts Pursuant to section 24(1) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 i of 1994, as subsequently amended (hereinafter referred to as the Decree) Mr Kehinde Sofola, S.A.N., on the authority of the Attorney General of the Federation and further to section 3(1)(d) of the Failed Banks Decree 1994 (as amended) instituted a prosecution before the Failed Banks (Recovery of j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

Federal Republic of Nigeria v. Mallam S. Bello Abubakar 173 a Debts) and Financial Malpractices in Banks Tribunal, Lagos Zone 1, hereinafter referred to as The Lower Tribunal, for the offences of:– b (a) conspiracy to commit a felony contrary to section 516 of the Criminal Code; (b) fraudulent false accounting contrary to section 438 of the Criminal Code; and c (c) stealing by a director or officer of the company contrary to section 390(7) of the Criminal Code; against Mallam S. Bello, who was at all time material, the managing director and chief executive of Gamji Bank Plc. d The charge against the respondent contained 22 counts. Count 1 charged the offence of conspiracy contrary to section 516 of the Criminal Code, counts 2–18, offences of stealing contrary to section 390(7) of the Criminal Code, e count 19 the offence of fraudulent false accounting contrary to section 438 of the Criminal Code; counts 20, 21 and 22 offences of false accounting by directors and officers of corporation or companies contrary to sections 435(1), 435(2)(b) f and 435(2)(c) of the Criminal Code respectively. The respondent pleaded “not guilty” to each of the 22 counts on 14th September, 1995 and, in his defence, he admitted in cross-examination that the Nigeria Deposit Insur- g ance Corporation (N.D.I.C.) carried out an inspection of Gamji Bank Plc, when he was its managing director and chief executive, and later submitted a written report of its inspection which he saw and read. The report was put in evidence h by the prosecution through the respondent in the witness box without objection from his Counsel and marked “exhibit TTT”. The report was censorious of the performance of the respondent as the chief executive of Gamji Bank Plc. i The respondent challenged the findings in the report. The Lower Tribunal did not attach much weight to the report because its maker was not called for cross-examination. The Lower Tribunal found counts 3, 6, 7, 8, 9 and 14 of j the charge proved and counts 1, 2, 11, 12, 13, 15, 17, 18, 19, [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

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20, 21 and 22 not proved. As regards counts 4 and 5 the a Lower Tribunal made no findings as to whether or not it found them proved. Counts 10 and 16 were struck out. The Lower Tribunal returned no verdict of “guilty” in re- b spect of the counts found proved and no verdict of “not guilty” in respect of those found not proved. The Lower Tribunal refrained from imposing sentence, in exercise of its discretion under section 20(5) of the Decree, c for the following reason, according to it, namely, the fact that the accused has completely repaid the sum of N57,585,226, involved in the crime as stated in counts 1, 20, 21 and 22 of the charge as per exhibits A and TT–T4. d Both parties appealed to the Special Appeal Tribunal. Section 20(5) of the Decree provides:– “Where, by reason of the confiscation or voluntary surrender of property, under this section, there is full or substantial recovery of e 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.” f Held – 1. Section 3(1)(b)–(d) of the Failed Banks Decree No. 18 of 1994 (as amended) which provides for the criminal jurisdiction of the Lower Tribunal does not say the juris- g diction can only be exercised in respect of a failed bank. This is unlike section 3(1)(a) of the Decree which relates to the civil jurisdiction on the Lower Tribunal and says it can only be exercised in respect of debts owed to a failed bank. In the instant case, although the Lower Tribunal h found that Gamji Bank was not distressed and had not failed within the meaning of that word in section 29 of the Decree, the Lower Tribunal still had jurisdiction to entertain the criminal proceedings. i 2. The provision in the criminal code relating to conspiracy, stealing, false entries and fraudulent false accounting are state laws. Consequently the offences charged herein are state offences, but the offences do not relate to j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

Federal Republic of Nigeria v. Mallam S. Bello Abubakar 175 a banks and banking but relate to the business or operation of a bank and therefore come within section 3(1)(d) of the Decree. b 3. By virtue of section 3(1)(b)–(d) of the Decree, the Failed Banks Tribunal can, in addition to trying the offences in Part III of the Decree, try offences specified in the Banks and Other Financial Institutions and Nigeria Deposit In- c surance Corporation Decrees and also try other offences relating to the business or operation of a bank under any enactment. 4. By the combined effect of rules 8 and 9 of Schedule 2 of d the Failed Banks Decree, the Failed Banks Tribunal is duty bound to return a verdict of guilty or not guilty as the case may be on each of the counts if its findings indicate a respondent is guilty or not guilty. In the instant e case, the trial Judge was in error in not returning a verdict of guilty or not guilty as the case may be. 5. In respect of count 3, since there was evidence before the Lower Tribunal that Gamji Bank, the employers of the f accused person kept an account in London with Ames Bank where monies meant for the training of bank staff were kept, the Lower Tribunal was right in rejecting the defence of the accused that he ordered the money meant for training the bank staff to be transferred to his per- g sonal account because at the material time the account number of the organisers of the course was unknown. 6. On the facts of this case, it will be equitable to impose sentence. However, the fact that the respondent has re- h funded in full the amount involved in the charge will go in mitigation of sentence and it will be equitable so to do since this is a redeeming feature of the case. 7. In the instant case, since the sum of N15,000,000 set i aside by the defendant for the payment of brokerages was traced to the accused’s personal accounts in Liberty Merchant Bank the defence of the accused that he paid the money to various persons as brokerages and accrued j interest could not be tenable because Gamji Bank did not [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

176 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

have records of such payments. The learned trial Judge a ought therefore to have found that the prosecution had proved its case beyond reasonable doubt. 8. None of the offences triable by the Failed Banks Tribu- b nal in section 3(1)(b)–(d) of the Failed Banks Decree is subordinate to the other. The trial Chairman therefore erred in saying that the accused person was not tried under the core offences triable by the Tribunal under the c Decree. 9. Per curiam “Part II of the Decree relates to recovery of debts owed to failed banks. This is not a case of a debt owed to a bank. It is a case of d an outright theft of a colossal sum of money belonging to a bank. It was not within the civil jurisdiction of the Lower Tribu- nal as contained in section 3(1)(a) already quoted above. In fact, its civil jurisdiction can only be exercised in respect of a failed bank which the bank, in question, Gamji Bank Plc, was not at e all times material to this case. This case properly fell within the purview of the criminal jurisdiction of the Lower Tribunal and not its civil jurisdiction, as the Lower Tribunal wrongly thought. It is pertinent to note here that section 3(1)(d) of the Decree f does not say that the Tribunal shall have power to try ‘other offences relating to banks and banking’ but ‘other offences relating to the business of or operation of a bank’. The Banks and Other Financial Institutions Decree, hereinafter referred to as BOFID provides for the offences relating to ‘banks’ and ‘bank- g ing business’. However, in the business or operation of a bank, offences may be committed by the director of a bank with respect to the commodity in which a bank deals, that is to say money, or with respect to the books which a bank keeps. Such offences do not h necessarily contravene the laws relating to banks and banking, but they have to do with something arising from the business or operation of a bank. Such offences may be stealing of the money from the bank, fraudulent false accounting and false en- i tries in the books of the bank. Laws relating to banks and banking regulate and control (1) the establishment of a bank; and (2) the banking business. They do create offences and penalties for the contravention of the regulations in that regard. Such a law is the BOFID.” j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

Federal Republic of Nigeria v. Mallam S. Bello Abubakar 177 a Sentencing the accused to three years’ imprisonment on each of the counts for which he was convicted. b Cases referred to in the judgment Nigerian Adereti v. A.G. Western State (1965) All N.L.R. 257 c Akwule v. Queen (1963) N.S.C.C. Vol. 157; 1963 N.R.N.L.R. 105 Asomougha v. Mandillas Ent. Ltd (1985) 3 N.W.L.R. (Part 12) 325 d Daboh v. The State (1977) N.S.C.C. Vol. II 309 at 322 Enekebe v. Enekebe (1964) 1 All N.L.R. 103 Kudoro v. Alaka (1956) 1 F.S.C. 82 e Resident, Ibadan Province v. Lagunju (1954) 14 W.A.C.A. 549 at 554 Solanke v. Ajibola (1969) N.W.L.R. 253 The State v. Williams (1978) N.S.C.C. Vol. 38 at 45 f Thomas v. Police (1949) 12 W.A.C.A. 490 Williams v. Voluntary Funds Society (1982) 1–2 S.C. 145 g Foreign Evans v. Bartlam 1973 A.C. 473 Osenton v. Johnson (1942) A.C. 130 at 138 h Nigerian statutes referred to in the judgment Constitution of the Federal Republic of Nigeria 1979, sections 160(1)(a), 190(1)(a), 274(1) i Criminal Code Act, Cap 77 Laws of the Federation of Nigeria, 1990, sections 309(7), 382, 383(2)(f), 435(1), (2)(b) and (c), 438, 516 Evidence Act, Cap 112 Laws of the Federation of Nigeria, j 1990, sections 19, 20(3)(a), 21 [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

178 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Failed Banks (Recovery of Debts) and Financial Malprac- a tices in Banks Decree No. 18 of 1994 (as amended), sections 3(1)(a)–(d), 5(1), 20(1) and (5), 24(1) and (2), 28 Recovery of Public Property (Special Military Tribunal) b Act, Cap 389 Laws of the Federation of Nigeria, 1990, section 20(a) and (d)

Nigerian rules of court referred to in the judgment c Failed Banks (Recovery of Debts) and Financial Malprac- tices in Banks Decree No. 18 of 1994 (as amended), Sched- ule 2, Rules 8 and 9 d Counsel For the appellant: Sofola, S.A.N. For the respondent: Williams, S.A.N. (with him Rhodes, S.A.N.) e Judgment AGBAJE J: Pursuant to section 24(1) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks f Decree No. 18 of 1994, as subsequently amended, hereinafter referred to as the Decree, Mr Kehinde Sofola, S.A.N., on the authority of the Attorney-General of the Federation and further to section 3(1)(d) of the Failed Banks Decree, 1994 g as amended, instituted a prosecution before the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Tribunal, Lagos Zone 1, hereinafter referred to as the Lower Tribunal, for the offences of:– h (a) conspiracy to commit a felony contrary to section 516 of the Criminal Code; (b) fraudulent false accounting contrary to section 438 of the Criminal Code; and i (c) stealing by a director or officer of a company contrary to section 390(7) of the Criminal Code; against Mallam S. Bello, hereinafter referred to as the defendant. j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 179 a It was the contention of the prosecutor that all the offences charged were triable in the Lower Tribunal under section 3(1)(d) of the Decree. b The charge against the defendant contained 22 counts. Count 1 charged the offence of conspiracy contrary to section 516 of the Criminal Code, counts 2–18, offences of stealing contrary to section 390(7) of the Criminal Code, c count 19 the offence of fraudulent false accounting contrary to section 438 of the Criminal Code, counts 20 and 21 the offences of false accounting by directors and officers of corporations or companies contrary to sections 435(1), d 435(2)(b) and 435(2)(c) of the Criminal Code respectively. The defendant pleaded “not guilty” to each of the 22 counts on 14th September, 1995. The defendant, at all times material to the case for which he stood trial, was the e managing director and chief executive of Gamji Bank Plc. On 15th September, 1995, the next day, the Lower Tribunal, presided over by Justice R.N. Ukeje, began to take evidence in the case. On 20th September, 1995, the prosecution closed its case after calling nine witnesses and putting in f evidence several exhibits. The defence opened on 3rd October, 1995. On that day the defendant began to give evidence in his own behalf in the g witness box. He concluded the whole of his evidence on 6th October, 1995 and closed his defence. He admitted in cross- examination that the Nigeria Deposit Insurance Corporation (N.D.I.C.) carried out an inspection of Gamji Bank Plc, when he was its managing director and chief executive, and h later submitted a written report of its inspection which he saw and read. The report was put in evidence by the prosecution through the defendant in the witness box without objection from his Counsel and marked exhibit TTT. The i report was censorious of the performance of the defendant as the chief executive of Gamji Bank. The defendant challenged the findings in the report. The Lower Tribunal did not attach much weight to the report be- j cause its maker was not called for cross-examination. Chief [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 180 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Sofola, S.A.N., submitted before us that the report was ten- a dered to contradict the vaunts of the defendant in the witness box that he made the bank and that the Lower Tribunal should have used it for that purpose. We agree with the Lower Tri- b bunal as to the evidential value of exhibit TTT, seeing that its maker was not called to be cross-examined on it. What is more, the prosecutor, when he opened in the Lower Tribunal his case against the defendant, the latter c having pleaded not guilty, did not make the report of the N.D.I.C. part of the evidence he intended to lead to prove the guilt of the defendant as provided for by section 4(1) of the Rules of Procedure, under which the Lower Tribunal op- d erated, contained in Schedule 2 to the Decree. It was later tendered by the prosecutor as we have just said through the defendant. This disposes of the submission of Mr Sofola, S.A.N., that the Lower Tribunal should have used exhibit e TTT against the defendant on the issue of sentence, if and when that stage is reached in this judgment. Counsel for both sides later addressed the Lower Tribunal. Because of one of the issues arising for determination in this f appeal, it is necessary to highlight the following submission of Chief Rhodes, S.A.N., Counsel for the defendant in the Lower Tribunal, in his address to the Tribunal, namely:– “I commit to the court the provisions of section 20(5), that section g talks of equity. It permits the Tribunal where there is full or substantial recovery of the amount involved in the offence, if it deems it equitable to reduce or decline to impose the penalty specified for the offence.” h In reply to this submission, Mr Kehinde Sofola, S.A.N., submitted that the provisions of section 20(5) could not avail the defendant in this case. The Lower Tribunal adjourned the case for judgment till i 13th October, 1995. On that day it delivered its judgment in the case. From the whole of the record of proceedings before us, the judgment of the Lower Tribunal appears to be contained in j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 181 a two separate documents. At pages 222–225 of the entire record of proceedings in this case we have a judgment, delivered on 13th October, 1995, by the presiding Judge. And b then we have a separate document, not made a part of the entire record of proceedings, to which we have just referred, of 74 pages containing a judgment the lower Tribunal delivered on 13th October, 1995. c In our view, the judgment at pages 222–225 of the entire record of proceedings is pre-occupied with the issue of sentence, regard being paid to the provisions of section 20(5) of the Decree. On the other hand in the 74-page judgment, a separate document, the presiding Judge reiterated the whole d of the evidence for the prosecution and the defence, oral and documentary. She set down the submissions of Counsel before her including the submissions as regards section 20(5) of the Decree. The learned presiding Judge then proceeded e to consider the 22 counts more or less one by one. She also dealt with the issue of sentence. On count 1, she found no evidence to prove the offence charged and discharged the defendant on that count. On f count 2, the presiding Judge found that, in the absence of documentary evidence, the case of the prosecution, that the defendant transferred a sum of $17,570 dollars, belonging to his employers, Gamji Bank Plc, to his personal account at g Lloyds bank, Edgware Road London, was not proved beyond doubt. As regards, counts 3 and 16, which charged the defendant with dishonestly transferring to his account at Lloyds Bank h (supra), the sum of £25,000 sterling belonging to his employers, standing to their credit at Ames Bank Ltd, the presiding Judge held that the evidence of PW1 and exhibits K– K1 (telex message from Ames Bank) put it beyond controversy that there were instructions by the defendant to trans- i fer the credit balance in question, at Ames Bank, to the account of SBA Ventures Ltd at Lloyds Bank, owned by him. The presiding Judge rejected the defence of the defendant in respect of the count. She went on to hold that the prosecu- j tion had substantially discharged the burden in this count by [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 182 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the mere fact that the defendant had repaid it as per exhibit a K before her. As regards counts 4 and 5, the Lower Tribunal did not make a finding as to whether or not the prosecution proved its case. b As regards counts 6 and 7, charging fraudulent transfer of the sum of N6.5 million, belonging to Gamji Bank Plc, to the account of SBA Ventures Ltd, a company owned by the defendant, with the Bank of the North, Balogun Branch, La- c gos, the Lower Tribunal found, on the oral and documentary evidence before it, that the sum did go out of the bank and was traced to the defendant’s account with the Bank of the North. It held that the prosecution had proved the two d counts. As regards counts 8 and 9, the Lower Tribunal found that the prosecution had proved, by the credible evidence of PW7 and the documentary evidence before it, that the de- e fendant did indeed recover the sums designated in these counts, N3.1 million, and lodged them in his personal account, receiving the interest on them both upfront and as and when due. f Count 10, which charged the defendant with dishonestly, on 18th September, 1993, causing to be paid to the account of SBA Ventures Ltd, a company owned by him, with the Bank of the North, an unnamed amount, belonging to the g defendant’s employers, Gamji Bank Nigeria Plc, was held by the Lower Tribunal to be lacking in essential particulars and consequently created no offence whatsoever. It was struck out. h As to count 11, which related to stealing by the defendant on 14th October, 1993, of the sum of N250,000, from his employers, Gamji Bank Nigeria Plc, the Lower Tribunal found the evidence in respect thereof was scanty. It accepted i the evidence of the defendant that the amount in question was used for the payment of interest. As to count 12, which charged the defendant with unlawfully paying into his SBA Ventures account (supra) the sum of N2,087,560, belonging to Gamji Bank, the excess realised from the sale of j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 183 a DM250,000, the Lower Tribunal found that the only evidence before it from PW1 was to the effect that the DM250,000 were sold and that the naira value was credited b fully to Gamji Bank’s account. The count was consequently held not proved by the prosecution. As to count 13, which charged the defendant with causing the sum of N2.5 million, belonging to his employers Gamji c Bank Plc, to be paid into the account of SBA Ventures Ltd, owned by him, the Lower Tribunal found that the amount in question was the subject matter of exhibit CC77, and that there was no other evidence of a memo for N2.5 million, said to be interest expenses, dated 11th January, 1993, con- d cerning the amount. As to count 14, which charged the defendant with dishonestly causing to be unlawfully paid to the account of SBA e Ventures Ltd owned by him, with the Bank of the North, the sum of N3,316,626.08, belonging to his employers, Gamji Bank Nigeria Plc, the Lower Tribunal found the count proved on the oral evidence of PW1 and PW2 and the documentary evidence, exhibits 55, 56, D4, JJ21. The Lower f Tribunal rejected the evidence of the defendant in respect of the transaction. Count 15, which charged the defendant with dishonestly paying into the SBA Ventures Ltd account with Meridian g Merchant Bank, the sum of N450,000 belonging to Gamji Bank, his employers, was held not proved, primarily because there was no evidence, at all, before the Lower Tribunal relating to any transaction in the Meridian Merchant Bank. h Count 16 was struck out because it was a duplication of the offence charged in count 3, which the Lower Tribunal had already dealt with. Count 17 charged the defendant with converting to his own use on or about 29th August, 1992 at i Lagos, a sum of N200,000 belonging to his employers, Gamji Bank Plc. The Lower Tribunal found the count not proved because the evidence in respect of it only stated the amount was withdrawn from the bank but there was no fur- j ther evidence regarding the sum of money. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 184 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Count 18 charged the defendant with dishonestly convert- a ing the sum of N2,000,000 belonging to his employers to his own use. The Lower Tribunal found the charges not proved because the prosecution led no evidence concerning it before b it, although the defendant said, in his evidence, that it was a brokerage payment. As to count 19, which charged the defendant with an offence of fraudulent false entries, the Lower Tribunal found it c not proved, because there was no evidence before it, as to any false entry in respect of the moneys said to be paid to depositors. The Lower Tribunal further held that the books of the bank containing the alleged false entries were not brought before it. Counts 20, 21 and 22, which charged of- d fences of fraudulent false accounting were held not proved because there was no evidence before the Lower Tribunal to support the charges as laid in the counts. The Lower Tribu- nal found that there was no evidence before it showing e (1) that the defendant omitted either to make a full and true entry in respect of a transaction in the books and accounts of the bank or direct such an entry to be made therein; or (2) that the defendant made or was privy to making a false f entry in any books, documents or accounts of the bank. In sum, the Lower Tribunal found counts 3, 6, 7, 8, 9 and 14 of the charge proved and counts 1, 2, 11, 12, 13, 15, 17, 18, 19, 20, 21 and 22 not proved. As regards counts 4 and 5 g the Lower Tribunal made no findings as to whether or not it found them proved. Counts 10 and 16 were struck out. We have taken the trouble to set down the findings of the Lower Tribunal, because the complainant has appealed h against the judgment of the Lower Tribunal which found some counts not proved and the defendant besides the points as to jurisdiction of the Lower Tribunal to try the case before it, taken by him in his appeal, has appealed on the merits against the judgment of the Lower Tribunal, which found i some counts proved. The Lower Tribunal returned no verdict of “guilty” in respect of the counts found proved and no verdict of “not guilty” in respect of those found not proved. j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 185 a The issue of sentence appears in the judgment forming part of the entire record of proceeding and in the 74-page judgment standing alone. The issue centres round the undoubted b discretion which, admitted by both parties to this appeal, the Lower Tribunal had in the matter. The discretion is, again, undoubtedly provided for by section 20(5) of the Decree. We have found it necessary to reproduce below verbatim, c how it came about that the Lower Tribunal, in its judgment, exercised its discretion, in the matter of sentence, in the manner it did:– “I do find justification to resort to the provisions of section 20(5) d of the Decree for the following reasons (which have emerged from the following evidence before the Tribunal):– (i) Gamji Bank Plc is not distressed and has not failed within the meaning of the Failed Banks Decree section 29. e (ii) PW1 and PW4 (Wara) concede that 5 branches of the bank and 2 cash points were opened and the asset base and the Deposit standing of the Bank increasing during accused’s tenure of 2½ years. (iii) The Board of the Bank accepted that in paying 10% broker- f age, the accused, though he paid in good faith, paid a level of brokerage was (sic) too high. The Board accepted a brokerage of 8% (sic) and ordered that the accused refunds the excess (2%) (sic) – exhibits T–T4. g (iv) PW1, PW2 and PW3 concede that no depositor complained that they were not paid their deposits or their interest. (v) This case arose as the accused posits, as a result of ‘BOARDROOM SQUABBLES’. There is independent evidence to that effect per exhibits R–R12 Minutes of the h Board Meeting held at Sokoto on 6th July, 1993, per exhibit ‘R’, wherein it was recorded as follows:– ‘In conclusion, the sub-committee in its report drew the attention of the Board to a personal misunderstanding i between S.D. Umar, a Board Member and the MD/CEO and appealed to the Board to make efforts at reconciling them in the interest of the Bank.’ The Board deliberated on that recommendation but nevertheless, inter alia, decided that the MD/CEO should pro- j ceed on compulsory leave forthwith. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 186 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(vi) The accused was not charged under any of the provisions of a the CORE offences created by the Decree. He was tried under the residuary offence created under the Criminal Code, by virtue of omnibus provisions of section 3(1)(d). (vii) The Tribunal would have been assisted by the exhibit TTT, b the N.D.I.C. Expert Report which was not tendered by the maker, who was therefore not subjected to cross- examination. That did affect the weight to be attached to it. I therefore refrained from using either in favour of or c against the accused. And yet there was sufficient material therein for either of those purposes, had the document been properly tendered. (viii) The reference to and reliance extensively on exhibits T–T4 (Report of the settlement Meeting) and in particular the ad- d mission of the accused regarding the sums therein and his payment of the sum total of N35,298,254 per exhibit T3– para.6.7, finds legal support in sections 19, 20(3)(a) and 21 of the Evidence Act Cap 112 Laws of the Federation of Ni- geria, 1990 – which relate to admissions and effect of ad- e missions by Parties to a suit. In Ajiboye v. The State (1994) 8 N.W.L.R. (Part 364) 587 wherein the Court of Appeal relying on the Supreme Court decision in Orizu v. State held to the effect that repayment upon demand, of money unlaw- f fully taken ameliorates the offence of stealing under section 382(2) of the Criminal Code. (ix) To my mind, the fact and the peculiar circumstances of this case strongly suggest a case that more appropriately belongs to Part II of the Decree, that is, the Civil Recovery of Debts, g rather than resort to criminal prosecution. It is for that reason that I shall refrain from returning a verdict of ‘Guilty’ on the accused. I shall however, make appropriate Orders under the Decree for the Recovery of sums outstanding from the N57,585,226, as charged. ‘That sum per exhibit h before the Tribunal is N8 Million.’ 3 Orders In view of the fact that the accused has completely repaid the sum of N57,585,226 involved in the crime, as stated in Counts 1, 20, 21 i and 22 of the charge and per exhibits A and T1–T4 I shall have recourse to section 20(5) of the Decree and shall refrain from imposing the prison sentences and penalties prescribed by section 20(1). Accordingly, in terms of section 15 of the Decree the accused is hereby granted 21 days from the date of this judgment in terms of j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 187 a section 12(2) of the Decree, within which to pay onto the Tribunal, the outstanding sum of N8 Million (Eight Million Naira). (i) If by the 2nd day of November the accused has not paid the Tribunal the said sum of N8 Million, the Tribunal shall in b terms of section 25 of the Decree, order the sale of the accused’s Property at Plot 834 Area 2, Garki, Abuja, more particularly described in exhibit 000. (ii) The shares in Gamji Bank Plc registered in the name of c SBA Ventures Limited worth N10.26 Million is hereby forfeited to the Bank. (iii) For the reasons aforesaid, I shall have resort to section 20(5) of the Decree and I shall refrain from imposing the penalties created under section 20(1). In its place ‘hereby d order the forfeiture of the Shares and repayment of the outstanding balance which is hereby put at N8 Million’.” It will be seen that for the reasons marked (i)–(ix), the Lower Tribunal refrained from returning a verdict of e “guilty” on the defendant on the counts it found proved. It will be seen, too, that the Lower Tribunal refrained from imposing sentence, in exercise of its discretion under section 20(5) of the Decree, for the following reason, according to f it, namely, “in view of the fact that the accused has completely repaid the sum of N57,585,226, involved in the crime as stated in counts 1, 20, 21 and 22 of the charge as per exhibits A and TT–T4 I shall have resort to section 20(5) g of the Decree and shall refrain from imposing the prison sentence and penalties prescribed by section 20(1)”. Both parties, as we have said earlier on in this judgment, have appealed against the judgment of the Lower Tribunal. h The grounds of the appeal of the complainant, leaving out their particulars, are as follows:– (1) The Tribunal erred in law by discharging the accused on count 1 and thereby came to a wrong decision in the i case. (2) The Tribunal seriously erred in law in holding that the case against the accused more appropriately belongs to civil recovery of debts and for that reason refrained from j returning a verdict of guilty and thereby failed to convict [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 188 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

and sentence the accused on some of the counts as a charged and this led to a miscarriage of justice. (3) The Tribunal misdirected itself in law and in fact by holding that:– b “In view of the fact that the accused has completely repaid the sum of N57,585,226 involved in the crime, as stated in counts 1, 20, 21 and 22 of the charge and per exhibit A and T1–T4, I shall have recourse to section c 20(5) of the Decree and shall refrain from imposing the prison sentence and penalties prescribed by section 20(1)” and thereby came to a wrong decision in the case and this has occasioned a serious miscarriage of justice. d (4) The Tribunal erred in law in refusing to consider exhibit TTT, the N.D.I.C. Report, and thereby came to an erroneous decision in the case. (5) The Tribunal erred in law in holding that the case of the e prosecution in respect of some of the counts has not been proved beyond reasonable doubt and thereby came to a wrong decision in the case. (6) The judgment is unreasonable and cannot be supported f having regard to the evidence. The grounds of the appeal of the defendant, original and additional are as follows, leaving out their particulars:– “GROUND I: The learned trial Judge erred in law by holding g that the prosecution had proved its case against the accused person in Counts 3, 6, 7 and 14 of the charge when the evidence before the Tribu- nal was not properly evaluated nor was the accused person’s defence in any of the above h counts properly considered. GROUND II: The learned trial Judge erred in law when she failed to give the accused person benefit of the doubt as required by law. i GROUND III: The learned trial Judge erred in law by holding that the prosecution has proved the offences of stealing in Count 3 by the mere fact that the accused has repaid the money when there was no proof of fraudulent intent. j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 189 a GROUND IV: The learned trial Judge erred in law by holding that the prosecution had proved its case under counts 6 and 7 by the mere payment of the sum in exhibits ‘JJ18–JJ19’ to SBA Ventures Ac- b count in Bank of the North when there was no proof of any fraudulent intent. GROUND V: The learned trial Judge erred in law when she held that the explanation of the accused person c in respect of Count 3 is not convincing without stating her reasons or even explanation, even though she later held that the prosecution has substantially discharged the burden in this count notwithstanding the conflicts. d GROUND VI: The learned trial Judge erred in law in holding that the offence of stealing was proved in Count 14 when there was no proof of fraudulent intent. GROUND VII: The Tribunal below ought not to have embarked e on the trial of the accused because all the offences contained in the charge are offences against various sections of the Criminal Code of Lagos State over the trial of which the said Tribunal had no jurisdiction to entertain or em- f bark upon. GROUND VIII: The Attorney General of the Federation or his agent or representative has no authority or locus standi to initiate proceedings for the trial of of- g fences against enactments made by or having effect as law made by the Legislature of Lagos State. GROUND IX: The Tribunal below has no jurisdiction to entertain or to have undertaken the trial of the 22 h count charge before it.” Briefs of arguments have been filed on both sides and a reply brief by the complainant. We heard arguments on the complainant’s appeal and the i defendant’s appeal. As we indicated in our ruling, refusing the defendant’s application on the issue of jurisdiction, taken on his behalf by his Counsel, Chief F.R.A. Williams, S.A.N., that the issue be isolated and tried first, we would j now proceed to decide first the issues of jurisdiction raised [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 190 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. in this appeal. Four of such issues are raised by the defen- a dant in this appeal. The first of such issues relates to the jurisdiction of the Lower Tribunal to try the charge for which the defendant b stood trial. The issues involved in the objection of the defendant to the jurisdiction of the Lower Tribunal to try the case, now before us on appeal, are succinctly put thus at Page 4 Part I of the defendant’s brief, paragraph 1.3:– c “The major issue raised and considered in this part of the Brief concerns the jurisdiction of the Tribunal below to entertain the trial of the 22 counts charge before it. It is (a) a two pronged attack on two aspects of jurisdiction over the subject matter and (b) lack of competence on the part of the party who has invoked or pur- d ported to invoke the jurisdiction of the Tribunal. In regard to (a) the case argued on behalf of the accused is that the Tribunal has no jurisdiction to try offences created by the Criminal Code of Lagos State. In regard to (b) argument is that it is the Attorney-General of e Lagos State and not the Attorney-General of Federation who has the competence or locus standi to initiate proceedings.” Before we consider the arguments on both sides on the issues of jurisdiction, we would like to set down the following provisions in the Decree, on the jurisdiction of the Lower f Tribunal. Firstly, section 3(1) of the Decree, which provides for the powers of the Lower Tribunal:– 3(1) “The Tribunal shall have power to:– (a) recover, in accordance with the provisions of this De- g cree, the debts owed to a Failed Bank, arising in the ordinary course of business and which remain outstanding as at the date the bank is closed or declared a Failed Bank by the Central Bank of Nigeria; h (b) try the offences specified in part III of this Decree; (c) try the offences specified in the Banks and Other Finan- cial Institutions Decree No. 25, 1991 and the Nigeria Deposit Insurance Corporation Decree, 1988; and (d) try other offences relating to the business or operation of i a bank under any enactment.” Next, section 5(1) of the Decree, providing for a right of appeal from the decision of the Lower Tribunal to this Special Appeal Tribunal:– j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 191 a “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 b Property (Special Military Tribunal) Decree, 1984, as amended, in accordance with the provisions of that Decree.” The Decree provided that the right of appeal can be exer- c cised by the prosecution. We have set down the relevant provisions in the Decree on the issues of jurisdiction in question. We can now turn to the consideration of the arguments relating to them. d Chief F.R.A. Williams, S.A.N., Counsel for the defendant referred us to a paragraph in the brief filed in support of the appeal by the complainant which says:– “The Decree gives power to the Lower Tribunal to try other of- e fences relating to the business or operation of a Bank under any enactment see section 3(1)(d).” Any enactment:– “under the provision must in our respectful submission include the f Criminal Code, the Penal Code etc, provided the offence charged must relate to the business or operation of a Bank.” Chief Williams, S.A.N., accepts this submission or, at least does not dispute it. He submits, however, that the submis- g sion raised two questions which go to the jurisdiction of the Lower Tribunal to try the case against the defendant, namely:– “(i) Whether the offences alleged against the defendant on the h 22 count charge (or any of such offences) are offences relating to the business or operation of a bank and (ii) If the answer to question (i) is in the affirmative, whether it is the Attorney-General of the Federation or the Attorney- General of Lagos State who has the competence or locus i standi to initiate a prosecution.” Counsel submitted that the offences alleged in the 22-count charge are all charged as contravention of the Criminal Code which, according to counsel, must mean the Criminal Code j of Lagos State, He submitted that all the offences are part of [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 192 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the Laws of Lagos State or Laws which take effect under a section 274(1) of the 1979 Constitution as if they were laws enacted by the Legislature of Lagos State. He referred to the Criminal Code printed in the revised edi- b tion of the Laws of the Federation, 1990. The Criminal Code is a schedule to the Criminal Code Act, Cap 77 Laws of the Federation of Nigeria, 1990. Chief Williams, S.A.N., called our attention to section 2(1) and (2) of the Criminal Code c Act itself which says as follows:– “(1) The provisions contained in the Code of Criminal Law set forth in the Schedule to this Act, and hereinafter called ‘The Code’ shall, except to the extent specified in subsection (2), be State Laws with respect to the several matters therein d dealt with. (2) The provisions contained in the Code which relate to any matter contained in the First Schedule to the Constitution of the Federal Republic of Nigeria shall be the Laws of the e Federal Republic of Nigeria with respect to the several matters therein dealt with.” He then submitted that the provisions in the Code, not relating to any matter contained in the First Schedule to the Con- stitution of the Federal Republic of Nigeria, were State f Laws. He submitted that offences of conspiracy, stealing, fraudulent false accounting and keeping fraudulent accounts were offences which were and had always been State laws. He referred us to the case of the Queen v. Owoh (1962) All g N.L.R. (Part 2) 653, a judgment of the Federal Supreme Court at 655–656 where Brett FJ said as follows:– “The sections creating these offences (conspiracy to steal, contrary to section 516 of the Criminal Code, conspiracy to defraud con- h trary to section 422, cheating contrary to section 421, stealing contrary to section 390(4), forgery contrary to section 467(2) and ut- tering contrary to section 488) are not laws with respect to any matters in the Exclusive Legislative List in the Schedule to the Constitution of the Federation (words in brackets ours but supplied i from the judgment of Brett FJ).” Chief Williams, S.A.N., referred us to item 5, part 1 of the Exclusive Legislative List in the Second Schedule to the 1979 Constitution which includes “bank” and “banking”, j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 193 a and submitted that no State of the Federation has the legislative competence to enact a law with respect to offences relating to “bank” and “banking”. b It is pertinent to note here that section 3(1)(d) of the De- cree does not say that the Tribunal shall have power to try “other offences relating to banks and banking” but “other offences relating to the business of or operation of a bank”. c The Banks and other Financial Institutions Decree, hereinafter referred to as “BOFI Decree”, provides for the offences relating to “banks” and “banking business”. However, in the business or operation of a bank, offences d may be committed by the director of the bank with respect to the commodity in which a bank deals, that is to say money, or with respect to the books which a bank keeps. Such offences do not necessarily contravene the laws relating to banks and banking. But they have to do with something aris- e ing from the business or operation of a bank. Such offences may be stealing of the money of the bank, fraudulent false accounting and false entries in the books of the bank. Laws relating to banks and banking regulate and control (1) the f establishment of a bank; and (2) the banking business. They do create offences and penalties for the contravention of the regulations in that regard. Such a law is the BOFI Decree. In Akwule and others v. The Queen (1963) N.S.C.C. Vol- g ume 157 or (1963) N.R.N.L.R. 105, to which Chief Williams, S.A.N., called our attention. Sir Adetokunbo Ademola CJF said, as regards section 315 of the Penal Code of Northern Nigeria creating the offence of the Criminal breach of trust:– h “We are of the opinion that section 315 of the Penal Code is constitutionally valid in so far as it includes bankers in the category of persons liable to heavier punishment for criminal breach of trust. We are of the view that it is not legislation in respect of banks and banking but merely an incidental provision in penal Legislation i enacted for the peace and good government of Northern Nigeria. We therefore reject the submissions of counsel that this Legisla- tion is invalid in respect of bankers and that it is null and void.” We agree with Chief Williams, S.A.N., that the provisions in j the Criminal Code relating to conspiracy, stealing, false [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 194 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. entries and fraudulent false accounting are State laws. So in a our judgment, the offences charged in this case are State offences. But the offences, in our judgment do not relate to banks and banking but relate to the business or operation of b a bank. Having held that the offences charged in this case are State offences, that is offences created by the laws of a state, and that the offences charged relate to the business or operation c of a bank, the question then arises as to the competence or locus standi of the Attorney-General of the Federation or any legal practitioner in Nigeria, acting on his authority, to institute criminal proceedings for the offences charged, in this case, in the Lower Tribunal. d Chief Williams, S.A.N., called our attention to section 160 of the 1979 Constitution. Subsection (1)(a) thereof provides that the Attorney-General of the Federation shall have power to institute and undertake criminal proceedings against any e person before any court of law in Nigeria other than a court- martial in respect of any offence created by or under any Act of the National Assembly or Decree. There is section 191(1)(a) of the same Constitution which provides that the f Attorney-General of a state shall have power:– “(a) to institute and undertake criminal proceedings against any person before any Court of Law in Nigeria other than a court-martial in respect of any offence created by g or under any law of the House of Assembly.” The decisions in Daboh and another v. The State (1977) N.S.C.C. Volume II 309 at 322 and The State v. Williams (1978) N.S.C.C. 38 at 45, to which Chief Williams called h our attention, are on the same lines as the constitutional provisions of sections 160(1)(a) and 190(1)(a) of the 1979 Con- stitution. These constitutional provisions have not been suspended by Decree No. 1 of 1984. So, ordinarily, it is only the Attorney-General of the Lagos State who is competent to i institute criminal proceedings for offences created by State laws, as in this case. Mr Kehinde Sofola, S.A.N., has drawn our attention to the nature of the criminal proceedings in this case. The criminal j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 195 a proceedings were instituted by Mr Sofola, S.A.N., on the authority of the Attorney-General of the Federation against the defendant, pursuant to section 24(1) of the Decree. Section b 24(2) of the Decree says:– “Prosecutions for offences under this Decree shall be instituted before the Tribunal in the name of the Federal Republic of Nigeria by the Attorney General of the Federation or such officer in the Federal Ministry of Justice as he may authorise so to do and in ad- c dition thereto, he may (b) If a Tribunal so directs or if the Central Bank of Nigeria or the Nigeria Deposit Insurance Corporation so requests authorise any other legal practitioner in Nigeria.” d Mr Sofola, S.A.N., then reminded us of the supremacy of the provisions of a Decree over any constitutional provision. He referred to the case of Labiyi v. Anretiola (1992) 8 N.W.L.R. (Part 258) 139 at 162 Supreme Court decision, on the point. e We are of the clear view, because of the provisions of section 24(2) of the Decree, that the Attorney-General of the Federation or any legal practitioner in Nigeria, acting on his authority, is competent to institute the criminal proceedings f in this case in respect of the state offences charged. It is also our view that any constitutional provisions and any law saying the contrary are void to the extent of the inconsistency. See also section 28 of the Decree. g Another point as to jurisdiction, which we allowed Chief Williams, S.A.N., to raise, even though it was not specifically set out in the defendant’s brief of arguments, is that the complainant has no right of appeal against the order of the Lower Tribunal made on sentence. He submitted that this is h so because it cannot be said that, by that order on sentence, the Lower Tribunal gave a judgment against the complainant against which the complainant could appeal, by virtue of section 5(1) of the Decree. i We have shown, earlier on in this judgment, that in the Lower Tribunal, Chief Rhodes, S.A.N., counsel for the defendant there, submitted that the defendant could avail himself of the provisions of section 20(5) of the Decree, on j which the orders in respect of sentence was eventually [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 196 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. grounded. Mr Kehinde Sofola, S.A.N., the prosecutor sub- a mitted in the Lower Tribunal that the said section would not apply to the defendant. The Lower Tribunal rejected the submission of Mr Sofola, S.A.N., and accepted that of Chief b Rhodes, S.A.N., and, as we have just said, based its order, as regards sentences, on the said section 20(5). There is thus, in our view, a judgment against the complainant on the issue of sentence against which the complainant could appeal to this Appellate Tribunal by virtue of section 5(1) of the Decree. c Another point as to jurisdiction taken in the defendant’s brief is that, because Gamji Bank Plc has not been shown to be a failed bank, the Lower Tribunal had no jurisdiction to d entertain the criminal proceedings, the subject-matter of this appeal, in respect of the offences relating to the business or operation of the bank. The Lower Tribunal found specifically that Gamji Bank Plc was not distressed and had not failed within the meaning of that word in the Decree. We are e satisfied that this point as to the jurisdiction of the Lower Tribunal to entertain the case before it is misconceived. It seems to us that it confuses the civil jurisdiction of the Lower Tribunal with its criminal jurisdiction. f We have set down, earlier on in the judgment, the jurisdiction of the Lower Tribunal, as provided for by section 3(1) of the Decree. Section 3(1)(a) relates to the civil jurisdiction of the Lower Tribunal and it says it can only be exercised in g respect of debts owed to a failed bank. Section 3(1)(b)–(d) of the Decree provides for the criminal jurisdiction of the Lower Tribunal. Nothing in this section h says the jurisdiction can only be exercised in respect of a failed bank. And yet another point of jurisdiction, taken in the brief of arguments of the defendant, is this. It is submitted that be- i cause none of the 22 counts of the charge was laid under the Decree or any enactment cognisable by the Decree, the Lower Tribunal had no jurisdiction to try the case now on appeal before us. It is further submitted that “other offences” in section 3(1)(d) of the Decree, on a true and proper j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 197 a construction of section 3(1)(b), (c) and (d) of the Decree can only mean (1) offences under section 3(1)(b) – offences specified in part III of the Decree; and (2) offences under b section 3(1)(c) – offences specified in BOFI Decree and N.D.I.C. Decree. We reject this submission without the slightest hesitation, having regard to the clear wording of section 3(1)(d) of the c Decree, which, for ease of reference, we reproduce again below. Section 3(1)(d) “The Tribunal shall have power to:– (d) try other offences relating to the business or operation of a bank under any enactment” (italics by d us for emphasis). All the points raised as to jurisdiction, in our judgment, fail. The way is now clear for us to consider the appeals before us on their merits. e We have set down earlier on in this judgment, the grounds of appeal in respect of the complainant’s appeal and those in respect of the defendant’s appeal. Briefs of arguments, as we have already said, have been filed. f The issues arising for determination in the appeal of the complainant on his grounds of appeal, according to the complainant’s brief are:– “(1) Whether the Lower Tribunal was in error in its failure to g return a verdict on each of the 22 counts charged and to pass a sentence in respect of each count on which a conviction is recorded. (2) Whether the Lower Tribunal was right to have made the order which it made in this case purportedly under h subsection (5) of section 20 of the Decree.” The defendant, in his brief of arguments, appears to admit it that these two issues are the issues arising for determination in the complainant’s appeal. i The issue arising for determination in the defendant’s appeal, on his grounds of appeal, according to him, is, as follows, in his brief of arguments:– “Whether the learned trial Judge was right in holding that the j prosecution had proved its case against the accused in counts 3, 6, [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 198 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

7 and 14 when the evidence before the Tribunal was not properly a evaluated nor was the defence of the accused person in respect of the above mentioned counts considered.” In the complainant’s reply brief, it is submitted that a verdict b of “guilty” should have been returned by the Lower Tribunal on each of the following counts, namely, counts 3, 6, 7, 8, 9 and 14 and that of “not guilty” on each of the counts 1, 11, 12, 13, 15, 17, 18, 19, 20, 21 and 22 in line with its finding on the counts. It appears to us that it is conceded by the c complainant that counts 10 and 16 were properly struck out by the Lower Tribunal. Because, in our view, the complainant’s appeal and the defendant’s appeal are interwoven, we shall consider the issues d raised in the two appeals pari passu. We take issue 1, in the complainant’s appeal which we have copied above, first. It raises the question of the obligation on the Lower Tribunal to return a verdict on each of the e 22 counts in the charge before it. In this regard, we refer to the Rules of Procedure for the trial of criminal cases before the Lower Tribunal, contained in Schedule 2 to the Decree. Section 8 of Schedule 2 provides that at the close of the case for the prosecution and the defence, the Lower Tribunal f shall retire or adjourn to consider its findings. Section 9 of the same Schedule 2 says:– “After the Tribunal has made its findings the Tribunal shall announce such findings, and when the accused is found guilty, it g shall impose the appropriate penalty prescribed in this Decree and issue appropriate order accordingly.” It appears clear to us, on a consideration of sections 8 and 9 of the Schedule, containing the Rules of Procedure applica- h ble to this case, now before us on appeal, that the Lower Tribunal was duty bound to return a verdict of guilty or not guilty, as the case may be, on each of the 22 counts charged in this case. i In its 74-page judgment the Lower Tribunal gave its reasons for resorting to the provisions of section 20(5) of the Decree in this case. It went on to say that it was because of this that it refrained from returning a verdict of “guilty” on the defendant. Section 20(5) of the Decree, which we shall j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 199 a consider in depth later on in this judgment, contains nothing permitting the Lower Tribunal to refrain from returning a verdict of guilty on the defendant. In fact, section 20(5) of b the Decree can only be invoked at the sentence stage of the criminal proceedings, that is to say, after an accused person, facing trial in the Lower Tribunal, shall have been found guilty or convicted of the offence with which he is charged. c We are satisfied that the Lower Tribunal was clearly in error in refraining from returning a verdict of guilty on the defendant on each of the counts its findings indicated the defendant was guilty. Equally, in our view, the Lower Tribunal d ought to have returned a verdict of “not guilty” on each of the counts its findings indicated the defendant was not guilty. We now turn to the point also arising under this issue. This e point relates to the contentions, in this appeal, as to the proper verdict which the Lower Tribunal ought to have returned, in this case, on each of the 22 counts charged. The complainant contended in respect of each of counts 2, 3, 4, f 5, 6, 7, 8, 9, 14, 17, 18, 19, 20, 21 and 22, that the verdict which ought to have been returned by the Lower Tribunal was one of “guilty”. The essence of the appeal of the defendant is that the Lower Tribunal was wrong in its findings g which tended to suggest that the defendant was guilty on counts 3, 6, 7 and 14 and that the proper verdict which the Lower Tribunal ought to have returned in respect of each of those counts was one of “not guilty”. h We shall proceed to consider the submissions in respect of counts 2, 3, 4, 5, 6, 7, 8, 9, 14, 17, 18, 19, 20, 21 and 22, taking the counts one by one or some together. As to count 2: The pith of the submission of the complain- i ant on this count is that once it was proved that the sum of N17,570, the subject-matter of the charge, money belonging to Gamji Bank Plc, the employers of the defendant, got into his private account, the onus shifted on him to show, on a j balance of probabilities, that he had some lawful reason to [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 200 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. have the money there and to use it for his personal purposes, a as he admittedly did. We reject this submission. The onus was on the prosecution to prove every ingredient of the offences charged be- b yond reasonable doubt. Save as to the defence of insanity, put up by an accused, in a murder case, the onus of establishing it on a balance of probabilities being on him, the burden of proof in a criminal case is on the prosecution and c does not shift. The standard of proof is proof beyond reasonable doubt. The other exception to the rule, that the burden of proof in a criminal case is always on the prosecution and never shifts, d relates to situations where statutes provide that certain things shall be done except the persons doing them hold licences, authorising them to do so. In a prosecution for the contravention of any of such statutes it has been held by the courts e that the onus is on the accused person to prove that he holds the requisite licence to do the act. The defence of the defendant to this count was that thieves broke into his house, stole his wife’s jewellery and that he f believed that Gamji Bank Plc, his employers, had to recoup him for the loss his wife suffered and that, in fact, he got the approval, albeit, orally, of the chairman of the bank before he got the money. Once this defence was raised, it was for the prosecution to negative it. g The Lower Tribunal held that because it was not proved by the prosecution that the chairman of the bank did not give the defendant the oral approval he contended for, it had doubts about the count and that it was not proved. h We are satisfied that, on the law, the Lower Tribunal was right in the decision it gave on count 2. We uphold its finding that the count was not proved and hereby enter a verdict of “not guilty” on that count as the Lower Tribunal should i have done. As to count 3, we have said earlier on in this judgment that the Lower Tribunal found, on the oral and documentary evidences before it, that it was beyond controversy that the j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 201 a defendant gave instruction for the transfer of the subject- matter of the count to his personal account. The money was in fact traced to his personal account. It is clear to us that the b defendant, by placing the money in his personal account, had it at his will. The complainant submitted that this is sufficient evidence of fraudulent intent on the part of the defendant. c He referred us on the point to section 383(2)(f) of the Criminal Code which says:– 383(2) “A person who takes or converts anything capable of being stolen is deemed to do so fraudulently if he does d so with any of the following intents:– (f) in the case of money, an intent to use it as the will of the person who takes or converts it, although he may intend afterwards to repay the amount to the e owner” and the case of Thomas v. Police (1949) 12 W.A.C.A. 490. The defendant challenged the findings on this count on two grounds, namely:– f (1) that the defence of the defendant was not properly considered; and (2) that there was no evidence of fraudulent intent on the g part of the defendant. As to the first ground, the Lower Tribunal placed the evidence relating to the defendant’s defence before it, which was that he ordered the money meant for the training of the h bank staff to be transferred to his personal account because, at the material time, the account number of the organisers of the course was not known. The defendant himself admitted that Gamji Bank Nigeria Plc kept an account in London with Ames Bank where monies meant for the training of the bank i staff were lodged. Little wonder, the Lower Tribunal held that the explanation of the defendant in his evidence was un- convincing. The money for the training of Gamji Bank staff could only properly be in the account of Gamji Bank kept j for that purpose with Ames Bank, pending its transfer to [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 202 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. those entitled to it, the organisers of the training course and a not in the personal account of the defendant. By having the money in his personal account, the defendant had the amount charged in this count at his will. Intent b to defraud, in our judgment, had been established by the prosecution (see again section 383(2)(f) of Criminal Code quoted above). The conclusion we reach on count 3 is that the finding of c the Lower Tribunal on that count is correct. We hereby return a verdict of “guilty” on that count against the defendant which the Lower Tribunal ought to have returned. We dismiss the appeal of the defendant against the decision of the d Lower Tribunal on that count. We take counts 4 and 5 together. The amount involved in the two counts, N15,000,000, was money belonging to the defendant’s employers. It was traced to the personal account e of the defendant at Liberty Merchant Bank and the Bank of the North.

The evidence for the prosecution was that the defendant f ordered that the amount be set aside against brokerages. The Lower Tribunal on the evidence before it found that the payment of interests and brokerages was a practice that had gained acceptance within the Nigerian banking system. g The corollary of this finding is that the records of the brokerages paid and to whom they are paid must exist in the bank paying them, since the practice is not a hidden thing. In the instant case, the sum of N15,000,000, designated as h money for brokerages, was found in the defendant’s personal account. Thus the defendant had the money at his will. Payment of brokerages, if paid by the bank should pass from the bank to the depositors paid who must be known to the i bank. The defence of the defendant was that the whole of the money involved was paid by him to various persons as brokerages and accrued interest on their deposits. j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 203 a Gamji Bank Plc had no record of such payments. The defendant’s evidence was that only his personal name or that of his company featured in the transactions for reason of b confidentiality. So the depositors who were paid, according to him, were unknown and unnamed. On the undisputed fact, that the sum of N15,000,000 set aside albeit by the defendant, for the payment of brokerages c was traced to his personal accounts, the Lower Tribunal ought to have found that the prosecution had proved its case on counts 4 and 5 because there was no record of any payment of brokerages to which the amount related and the defendant’s evidence was that unnamed depositors were paid d the amount by him. The Lower Tribunal ought to have rejected the defence of the defendant on counts 4 and 5 which, as we have shown e was flimsy. Accordingly, we find the defendant guilty on counts 4 and 5 on the printed evidence in respect of these counts. We take counts 6 and 7 together. The Lower Tribunal f found the counts proved on its findings that the amount involved, N6.3 million belonging to Gamji Bank Plc, his employers, was traced to the defendant’s personal account, in the Bank of the North. The defendant has appealed against g the decision of the Lower Tribunal on these counts, contending that it did not advert its mind to the need to prove fraudulent intent on the part of the defendant, an essential ingredient of the offence charged, which, according to him, was not established by the prosecution. h We have held earlier on in this judgment, that the fact that the defendant had the money of his employers in its private account meant that he had it at his will and that this is sufficient evidence of fraudulent intent on his part to ground a i conviction for theft of the money. The decision in Adereti and another v. A.G. Western State (1965) All N.L.R. 257, to which Counsel for the defendant called our attention is, in our judgment, inapposite here. There a bank manager, in ex- j ercise of his discretion, granted an overdraft to a customer, [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 204 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. in breach of instructions, unlike here where the managing a director of the bank in question transferred the money belonging to the bank to his personal account. We uphold the finding of the Lower Tribunal on counts 6 b and 7. We hereby return a verdict of “guilty” on each of these counts against the defendant which the Lower Tribunal ought to have returned. We reject the defendant’s appeal against the decision of the Lower Tribunal on the two c counts. We now come to counts 8 and 9. The Lower Tribunal found that the prosecution had proved its case, by the credible evidence of PW7 and the documentary evidence before d it, showing that the defendant did indeed recover the sums designated in the two counts and did place them in his personal account, receiving interests on them both upfront and as and when due. e The defendant has not appealed against this finding. The Lower Tribunal ought to have returned a finding of guilty against the defendant on the two counts. We hereby enter a verdict of guilty on each of the counts. f We shall treat counts 11, 12 and 13 together. The Lower Tribunal found that there was no evidence in proof of any of the three counts. The finding is supported by the printed evidence in this case. We hereby return a verdict of “not guilty” g against the defendant on each of the three counts. We now come to count 14, which the Lower Tribunal found proved. The amount involved was N3,316,620. The h evidence for the prosecution was that PW2 calculated interest due on Continental Merchant Bank’s share deposit account as N276,403,13. The defendant changed the figure, or, according to him, recalculated the interest due. He substituted N3,316,626 for the original figure of N276,404.13. i PW2 raised a cheque for the sum of N276,404.13 in favour of Continental Merchant Bank for the interest due to it. The cheque was sent to that bank. Another cheque for N3,316,626 was raised on the recalculated figure by the j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 205 a defendant. This amount was traced to the defendant’s personal account in the Bank of the North. The original calculations by PW2 and the recalculations by b the accused were on exhibit J. The transaction to which the figures on exhibit J relate is the interest on Continental Mer- chant Bank’s share deposit account. It was the defence of the defendant that he used the amount c for public relations, in the form of press conference and gift items. The Lower Tribunal was not satisfied with the defence of the defendant. d The defendant has appealed against the decision of the Lower Tribunal on this count, contending that the prosecution led no evidence, whatsoever, to show that the defendant acted fraudulently or dishonestly in directing the transfer of e the sum involved into his own account. We have held that the fact that money belonging to Gamji Bank Plc was transferred by the defendant to his personal account is evidence that the defendant had the money at his f will. This is evidence of intent to defraud on the part of the defendant (see section 383(2)(f) of the Criminal Code). Again, according to exhibit J, the document with reference to which the cheque for N3,316,626 was raised, the money g was due to Continental Merchant Bank for the interest. That bank was paid the amount calculated by PW2. The defendant transferred the amount, he recalculated to his personal account for a purpose, according to him, not connected with h or related to that for which the amount was raised. He said he used it for public relations. We are satisfied that the prosecution had led sufficient evidence of fraudulent intent against the defendant on this count. We uphold the find- i ings of the Lower Tribunal on this count and dismiss the appeal of the defendant against the decision of the Lower Tri- bunal on the count. We hereby return a verdict of guilty against the defendant, which the Lower Tribunal ought to j have returned. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 206 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

We shall take counts 15, 17, 18, 19, 20, 21 and 22 together. a In each of these counts the Lower Tribunal found that the prosecution had not proved its case against the defendant. There are no indications in the complainant’s brief and reply b brief that the complainant is challenging or seriously challenging the finding of the Lower Tribunal on each of these counts. In any case, the decision is, in our view, amply supported by the printed evidence in this case. It is only now for c us to return a verdict of not guilty on each of the counts, which the Lower Tribunal ought to have recorded. In sum, we have upheld the findings of the Lower Tribunal on counts 3, 6, 7, 8, 9 and 14 and returned a verdict of d “guilty” on each of the counts. We have upset the findings of the Lower Tribunal on counts 4 and 5 that the prosecution had not proved its case and substituted findings to the contrary and returned a verdict of “guilty” on each of the two e counts. We have affirmed the decision of the Lower Tribunal on counts 1, 2, 11, 12, 13, 15, 17, 18, 19, 20, 21 and 22 and returned a verdict of not guilty on each of the counts. f We now come to issue 2, raised in the complainant’s brief, namely:– “Whether the Lower Tribunal was right to have made the order which it made in this case, purportedly under subsection (5) of g section 20 of the Decree.” This issue raised the question of the appropriate sentence or sentences to be passed on the defendant on the counts on which he has been found guilty or convicted. The counts are h 3, 4, 5, 6, 7, 8, 9 and 14. The Lower Tribunal declined to impose any sentence on the defendant in respect of the counts it found the case of the prosecution proved. It did this in purported exercise of its i discretion in that regard in section 20(5) of the Decree. It is this purported exercise of its undoubted discretion in the matter, under the subsection in question, that is being challenged by the complainant in his appeal to us in this case. j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 207 a We have stated earlier on in this judgment, the reasons given by the Lower Tribunal for resorting to section 20(5) of the Decree. Both sides to this appeal are agreed that a discre- b tion, in the matter of the sentence to be imposed in this case, on the defendant, is vested in the Lower Tribunal by the said section 20(5). Both sides are, equally, agreed that the questions raised by c issue 2, which we are now considering, are:– (i) Did the Decree give to the Lower Tribunal a discretion in the matter and did it exercise it? (ii) Was the discretion, if exercised, exercised, arbitrar- d ily or judicially? (iii) Has the complainant, alleging a wrongful exercise of the discretion on the part of the Lower Tribunal, e shown that, in the exercise of it, it committed a breach of any relevant or material principle? We have already answered question (i) in the affirmative. We will now proceed to the consideration of questions (ii) f and (iii) which must necessarily be taken together. A number of decided cases has been placed before us to guide us in coming to a correct decision on questions (ii) and (iii). The complainant directed us to (i) the case of Solanke g v. Ajibola (1969) N.M.L.R. 253 where the Supreme Court held that appeals on the exercise of a trial Judge’s discretion could be entertained where in exercising his discretion the learned trial Judge had acted under a mistake of law or in h disregard of principle or under a misapprehension of the facts or had taken into consideration irrelevant matter or on the ground that injustice could arise; and (2) the case of Evans v. Bartlam (1973) A.C. 473 where the House of Lords i in England held that they had the power and the duty to interfere in the exercise of discretion on the ground that the decision would result in injustice being done. For his part, Counsel for the defendant has put before us in j this regard, the following decisions:– [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 208 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(a) The case of The Resident, Ibadan Province and another a v. Lagunju (1954) 14 W.A.C.A. 549 at 554 where it was stated:– “The exercise of a discretion may of course be reviewed by b this Court on appeal but it is the practice not to interfere if the discretion has been judicially exercised that is to say bona fide and not arbitrarily or illegally and without reference to extraneous matters even although we might feel in any case that the course ultimately adopted by the court be- c low is not the one we could have then” and (b) to the decisions in the following cases: Osenton v. Johnson (1942) A.C. 130 at 138; Kudoro v. Alaka d (1956) 1 F.S.C. 82; Enekebe v. Enekebe (1964) 1 All N.L.R. 102 (S.C.); Williams v. Voluntary Funds Society (1982) 1–2 S.C. 145 and Asomougba v. Mandillas Ent. Ltd (1985) 3 N.W.L.R. (Part 12) 325 (CA) to the effect e that an appellate court or tribunal is not to substitute its own discretion for that of the court or tribunal and that it can only interfere if it reaches a clear conclusion that the discretion was exercised on wrong principles or ar- f bitrarily and not judicially and judiciously. We think that the starting point in the consideration of questions (ii) and (iii) is to reproduce section 20(5) of the Decree which says:– g “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 h subsection (1) or in any other enactment.” In the forefront of the submissions of Mr Sofola, S.A.N., on the questions we are now considering, is the submission that the operative clause in section 20(5) of the Decree is the i clause containing the expression, “if it (the Tribunal) deems it equitable”. In other words, Counsel submits that that expression has the principal relevance in the resolution of the questions now at issue. He submits that there is no indication whatsoever in the judgment of the Lower Tribunal that it j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 209 a adverted its mind to this most relevant factor, before reaching the conclusion not to impose any sentence on the defendant. He submits that the reasons the Lower Tribunal gave b for its decision on the point in question are improper, irrelevant and inadequate and therefore inequitable. Counsel submits that the relevant factors which the Lower Tribunal should have considered but did not consider on the c issue are:– (a) the mischief at which the Decree is aimed; (b) the large amount of money for which the defendant is convicted as having stolen; d (c) the flagrant betrayal of the trust reposed in the defendant by his stealing the money of the bank entrusted to his care. Because of the foregoing, counsel submitted that the Lower e Tribunal exercised its undoubted discretion in the matter not judiciously or judicially. He asked us to interfere with it and impose the appropriate sentences for the offences for which the defendant has been found guilty. He said the sentence f should be a custodial sentence in respect of each count of which he has been found guilty. Chief Williams, S.A.N., Counsel for the defendant, submitted that, having regard to the reasoning of the Lower Tri- g bunal at pages 69–74 of its judgment, the exercise of the discretion in question in favour of the defendant, was a judicial and judicious decision which the Lower Tribunal reached after considering all the relevant issues and that it h could not be said to have reached it arbitrarily or by taking into consideration any extraneous or irrelevant issue. He therefore urged this Appeal Tribunal not to interfere with the exercise of the discretion. He submitted that the issue now before us is not whether this Appellate Tribunal might have i exercised the discretion the other way but whether the Lower Tribunal exercised it judicially and judiciously. We agree with Mr Sofola, S.A.N., that the expression “if it (the Tribunal) deems it equitable” in section 20(5) of the j Decree has the principal relevance in the consideration of [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 210 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the exercise of the discretion by the Lower Tribunal under a section 20(5) of the Decree not to impose the penalty specified in section 20(1) of the Decree or in any other enactment in the present case now on appeal before us. So, in our b judgment, before the Lower Tribunal came to the decision it had to indicate expressly or by necessary implication from what it said in its judgment, that it considered it equitable to do so. c The Concise Oxford Dictionary defines the word “equitable” as “fair”, “just”. In a criminal case, Mr Sofola, S.A.N., reminded us, a decision must be fair or just, not only to the accused, but also to the complainant and the interests it represents. d The above principal factor in section 20(5) of the Decree is separate and distinct from the other relevant factor in the section, namely, “there is full or substantial recovery of the amount involved in the offence”. e Mr Sofola, S.A.N., has submitted to us that there is no indication in the judgment of the Lower Tribunal that it adverted its mind to this factor having the principal relevance in its decision to decline to impose the prescribed penalty. f Let us now examine the relevant portions of the judgment of the Lower Tribunal and find out whether this submission is well founded or not, bearing in mind what we have just said in this regard, namely, it must indicate expressly or by g necessary implication from what it said, that it considered it equitable to decline to impose the prescribed penalty. At page 73 of the judgment of the Lower Tribunal, under the paragraph headed “Orders”, it said:– h “In view of the fact that the accused has completely repaid the sum of N57,585,226 involved in the crime, as stated in counts 20, 21 and 22 of the charge and per exhibits A and T–T4, I shall have recourse to section 20(5) of the Decree and shall refrain from imposing the prison sentences and penalties prescribed by section 20(5).” i Here, the Lower Tribunal did not allude to the clause in section 20(5) which says “if it (the Tribunal) deems it equitable”, let alone express any view on it, before reaching its decision. The Lower Tribunal, however, also gave reasons for j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 211 a resorting to the provisions of section 20(5) at pages 71–73 of its judgment. At the end of its reasoning in that passage, the Lower Tribunal said: “It is for that reason that I shall refrain b from returning a verdict of guilty on the accused.” Earlier on in this judgment, we have held that the Lower Tribunal misdirected itself, in law, as to the purport of section 20(5) of the Decree, pertaining to the discretion in question. Be that as it may, we shall examine the reasons the Lower Tribunal c gave at the said pages 71–73 and find out if there is anything there suggesting or tending to suggest that, before reaching its conclusion to decline to impose the prescribed penalty, it deemed or considered it equitable to do so. d The passage in the context directly relevant in our judgment, to the issue of sentence, for the offences the defendant committed, is the reference to the case of Ajiboye v. The State (1994) 8 N.W.L.R. (Part 364) 587 where the Court of e Appeal, relying on the Supreme Court decision in the Orizu case, held to the effect that repayment upon demand of money unlawfully taken ameliorates the offence of stealing under section 382(2) of the Criminal Code. f The same thing may be said of reason (iv), in the context which simply says: “The accused was not charged under any of the provisions of the Core offences created by the Decree.” There is nothing there to suggest that it was present to the mind of the Lower Tribunal that it had to deem it equitable g not to impose any sentence. We are therefore satisfied that the Lower Tribunal did not direct its mind directly or by necessary implication to the factor, having the principal relevance in this matter, before h reaching its decision now before us on appeal. This decision of ours is enough, on the authorities placed before us, to come to the conclusion that the decision of the Lower Tribunal not to impose any sentence on the defendant i was not a judicial and judicious exercise of its discretion in that matter. We are also satisfied that the Lower Tribunal even took into consideration irrelevant matters before making this de- j cision. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 212 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

All the factors numbered (i), (ii), (iii), (v) and (vi), con- a tained in the reasoning of the Lower Tribunal at pages 71– 73 for its decision to resort to section 20(5) of the Decree, which we have copied earlier in this judgment, do not relate b to the degree of culpability of the defendant for the offences for which he had been convicted. Nor do they constitute sin- gly or taken together redeeming features of the offences the defendant committed. This being the case, we fail to see their relevance on the issue of sentence, let alone a decision c to decline to impose a sentence or sentences on the defendant for the offences he committed. As to reason (iv) at page 72, which might be relevant to the issue of sentence, as we have said above, the Lower d Tribunal in our judgment, misdirected itself as to the gravity of the offence in this case. It said that the defendant was not charged under the core offences triable by the Lower Tribu- nal under the Decree. The offences under section 3(1)(b) and e (c) of the Decree are not called core offences. Nor are the offences under section 3(1)(d) of the Decree under which the defendant was tried and convicted said to be subordinate to those in section 3(1)(b) and (c). f Reason (ix) at page 73 is, in our view, a misdirection in law and in fact. It says “To my mind the fact and the peculiar circumstances of this case suggested a case that more appropriately belongs to Part II of the Decree, that is civil recovery of debts rather than resort to criminal prosecution”, g giving another reason for resorting to section 20(5) of the Decree. Part II of the Decree relates to recovery of debts owed to failed banks. This is not a case of a debt owed to a bank. It is h a case of an outright theft of a colossal sum of money belonging to a bank. It was not within the civil jurisdiction of the Lower Tribunal as contained in section 3(1)(a) already quoted above. In fact, its civil jurisdiction can only be i exercised in respect of a failed bank which the bank in question, Gamji Bank Plc, was not at all times material to this case. This case properly fell within the purview of the criminal jurisdiction of the Lower Tribunal and not its civil jurisdiction, as the Lower Tribunal wrongly thought. j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Federal Republic of Nigeria v. Mallam S. Bello Abubakar 213 a We would therefore allow the complainant’s appeal against the decision of the Lower Tribunal not to impose sentences on the defendant. We hereby set aside that deci- b sion. We shall now proceed, in virtue of our powers under section 20(a) and (d) of The Recovery of Public Property (Spe- cial Military Tribunal) Act, to consider the appropriate sen- c tences to be passed on the defendant. We must necessarily bear in mind section 20(5) of the Decree. The offences of which the defendant has been found guilty relate to property of a bank. The offences, stealing of the d money of his employer, Gamji Bank Plc, relate to the business or operation of the bank. The defendant was at all times material to this case the managing director and chief executive of the Bank. The money had been entrusted to him e for management, according to sound banking principles and practice. We must remind ourselves that the banking industry can only thrive in an atmosphere where the public confidence in f it is strong or, at least, unshaken. Sound banking is also in- dispensable to the survival of a nation’s economy. The collapse of a bank is not only not good for a nation’s economy, it brings in its wake untold hardship to its deposi- g tors who lose their money. Any act which brings or tends to bring about loss of public confidence in a bank must be frowned at. Such acts are acts which affect or tend to affect adversely the liquidity of the bank. Stealing of large sums of h money belonging to a bank, like in the instant case, is one of such acts. It is all the more reprehensible because it was committed by one to whom the money was entrusted for management. i The turpitude of the defendant in stealing the moneys of his employer, Gamji Bank Plc, in the manner he did so, stares everybody in the face. The turpitude remains, notwithstanding the fact that he has more or less refunded the j amount involved in the charge. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 214 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

This, therefore, in our judgment, is not a case where it can a be properly said that one considers it equitable not to impose a sentence. In our judgment, a custodial sentence alone can meet the justice of this case and serve as a deterrent to the b class of the defendant in the banking industry, with an incli- nation to help themselves to the money of the bank in their care and custody. One of the mischief’s the Decree is aimed at is the subject matter of this case. Inadequate punishment c will defeat that object. The fact that the defendant has refunded in full the amount involved in the charge will certainly go in mitigation of sentence. In our judgment, it will be equitable to do so, for it is d a redeeming feature of the case. The sentence prescribed for the offence the defendant committed in the Criminal Code is seven years’ imprisonment. The sentence of this Appeal Tribunal on the defendant is e that he is sentenced to three years’ imprisonment on each of counts 3, 4, 5, 6, 7, 8 and 14 for which he has been convicted. The sentences shall run concurrently. We are indebted to counsel on both sides for the able assis- f tance they have given us both in their written briefs and oral submissions in open court. It is, in fact, in deference to the industry which the learned and eminent Senior Advocates, who argued this appeal before us, undoubtedly put into the g preparation of their case and their presentation to us that we have written this detailed judgment in the hope that no submission of theirs would fail to receive our consideration. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 215 a Wema Bank Limited v. BBC Brown Boveri Nigeria Limited b COURT OF APPEAL, LAGOS DIVISION PATS-ACHOLONU, MUSDAPHER, UWAIFO JJCA Date of Judgment: 16 APRIL 1996 Suit No.: CA/L/25/90 c Banking – Account – Opening of a new account by bank and payment of cheque into account – Duty of care of bank – Ex- tent of – When bank can be said to be negligent – Proof of d Tort – Negligence – Meaning of – When action for negligence will lie

Facts e The respondent had never been a customer of the appellant. It executed a contract for the National Electric Power Au- thority (NEPA). He was issued a cheque with a face value of N172,219 as a consideration for the work. It was discovered f that all the necessary signatures that should be appended to such a cheque were not fully endorsed. The respondent sent one of its staff, Mr Ugwumadu, to National Electric Power Authority (NEPA) to obtain the complete signatures of the g cheques. For a long time nothing further was heard by the respondent company and it wrote NEPA reminding it that it was yet to get the regularised cheque back. It was to its amazement that it learnt that the cheque had been paid into a bank as early as 5th September, 1983 when the cheque was h first issued on 26th May, 1983. It was further discovered that an account was opened with appellant’s bank with that money – ostensible by Ngwumadu who appeared to have vanished into thin air, in the name of the respondent com- i pany. The respondent demanded payment of this money claiming it never opened any account with the appellant bank. The basis for the demand for the return of the money is that the bank did not avail itself of the necessary pre- j requisite conditions for opening an account of a corporate [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

216 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. body such as demanding important documents as the Memo- a randum and Articles of Association and resolution of the company as well as the names of the directors of the company. It alleged that the account was opened with fake b names and documents. The appellant, on the other hand, maintained that it made all the necessary enquiries and saw all the documents that it would ordinarily demand before opening the account in the c corporate name of the respondent and stated that the account was opened by Messrs. Akinpelu and Uwalaka who the respondent denied knowing, or being the staff of the company. The appellant insisted that, if the respondent had been care- d ful enough, the fraud by Akinpelu and Uwalaka would have been detected. It declined all liabilities arguing that for a cheque first made out on 25th May, 1983 it was only in Feb- ruary, 1984 that the respondents appeared to have woken up e from their slumber. The learned trial Judge entered judgment for the respondent on its claim for the sum of N172,219 with interest for the tort of negligence. The appellant appealed to the Court of f Appeal. Held – 1. The fact that a cheque bearing the plaintiff’s name as g drawee was brought to the notice of the defendant established a relationship which demanded that there was a duty of care to be exercised in regard to the cheque. That duty is fulfilled if the cheque is not paid into another h person’s account but the plaintiff’s. The duty requires that if an account in the plaintiff’s name is going to be opened so that the cheque may be paid in, necessary information to support the request for the opening of such i account ought to be sought and obtained by the defendant. 2. In the instant case, the appellant complied with these two conditions. They were not expected to go beyond what j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 217 a they did to turn themselves into detective investigators before opening that account and dealing with the cheque in the absence of any veritable fact arousing suspicion. b 3. Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable c man would not do. 4. The general concept of reasonable foresight is the criterion of negligence and is fluid in its application; it has to be fitted to the facts of the particular case. d 5. Negligence is not established by proving that the loss might possibly and with extraordinary foresight and prudence have been avoided. 6. In the instant case, to have attributed negligence to the e appellant bank in the circumstances of this case was tantamount to expecting them to have acted with extraordinary foresight and prudence or even with a sense of premonition. The evidence adduced by the appellant f showed that they acted reasonably and prudently. 7. The wholesome manner in which the appellant took to know who were the people who approached it to open an account in the name of the respondent company testifies g that it did what was expected of it, i.e. to request for the necessary documents. Equally the process of demanding to see important documents in this direction readily pro- claims that the appellant felt it owed a duty of care to the h respondent which was why it took time to make the demands of the documents. 8. It will be setting an awfully super-standard performance to expect a bank to conceive in all likelihood that the i person or persons about to open an account on behalf of a company are a bunch of crooks even after satisfying itself by looking at all the necessary documents and everything appears to be in order. j Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

218 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Cases referred to in the judgment a Nigerian Abusomwan v. Mercantile Bank Ltd (No.2) (1987) 3 b N.W.L.R. (Part 60) 196 Imo Concorde Hotel Ltd v. Anya (1992) 4 N.W.L.R. (Part 234) 210 at 220 Nigerian Bottling Co Ltd v. Ngonadi (1985) 1 N.W.L.R. c (Part 4) 739 United Bank for Africa Ltd v. Auhoru (1990) 6 N.W.L.R. (Part 156) 254 Ward v. Tresco Stores Ltd (1976) 1 All N.L.R. 219 d

Foreign Anns v. Morian London Borough Council (1978) A.C. 728 Deyong v. Shenburn (1946) 1 A.E.R. 226 e Donoghue v. Stevenson (1932) A.C. 562 Hart v. Lanci and Yorks Rail Co (1869) 21 L.T. 261 Weller v. Foot and Mouth Disease Research Institute (1965) f 3 All E.R. 560

Book referred to in the judgment Bingham’s Motor Claims (7ed) page 4 g Clerk and Lindsell on Torts (14ed) paragraph 659 page 474 Counsel For the appellant: Olowoyeye For the respondent: Princewill h

Judgment PATS-ACHOLONU JCA: (Delivering the lead judgment): This is a case in which the full facts shall be dutifully set i down in order to examine, understand and appreciate its nu- ances having regards to the pleadings and the testimony of the parties, and determine on whose side the case prepon- derates. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 219 a The plaintiff/respondent who claims it was not and has never been a customer of the appellant’s bank stated that it was issued a cheque with a face value of N172,219 as a con- b sideration for work it performed for NEPA which inciden- tally is not a party in the action. However, it was later found that all the necessary signatures that should be appended to such a cheque were not fully endorsed and so one Mr Ug- wumadu, a staff of the respondent, was detailed to obtain the c complete signatures of the cheque. For a long time nothing further was heard by the respondent company and it wrote NEPA reminding it that it was yet to get the regularised cheque back. It was to its amazement that it learnt that the d cheque had been paid into a bank as early as 5th September, 1983 when the cheque was first issued on 26th May, 1983. It was further discovered that an account was opened with appellant’s bank with that money – ostensibly by Ngwumadu who appeared to have vanished into thin air, in the name of e the respondent company. The respondent demanded payment of this money claiming it never opened any account with the appellant bank. The basis for the demand for the return of the money is that the bank did not avail itself of the f necessary pre-requisite conditions for opening an account of a corporate body such as demanding important documents as the Memorandum and Articles of Association and resolution of the company as well as the names of the directors of the g company. It alleged that the account was opened with fake names and documents. The appellant, on the other hand, maintained that it made all the necessary enquiries and saw all the documents that it h would ordinarily demand before opening the account in the corporate name of the respondent and stated that the account was opened by Messrs Akinpelu and Uwalaka who the respondent denied knowing, or being the staff of the company. i The appellant insisted that if the respondent had been careful enough, the fraud by Akinpelu and Uwalaka would have been detected. It declined all liabilities arguing that for a cheque first made out on 26th May, 1983 it was only in Feb- ruary, 1984 that the respondents appeared to have woken up j from their slumber. The evidence of both parties which are [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA 220 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. mostly documentary were in line with the nature of the a pleadings and centred largely on what a bank proposing to open an account for an incorporated body should do and what document it should demand. The appellant, as defen- b dant, stated through its witnesses including a lawyer that all due processes and care were taken and exercised. In his judgment, the court below held inter alia as follows:– c “Under item 5 of exhibit 16 the applicant was requested for to give particulars of another Bank with which an account is maintained or kept. UNION BANK OF NIG. LTD 40, MARINA, LAGOS was given. Item 8 of exhibit 16 requires names of two referees; none was d given. Exhibits 18 and 18A were identifications for Simeon Olu Akinpelu and Johnson Ogbonna and not for BBC Brown Boveri Nigeria Limited. They were for them in their individual or personal capaci- e ties, not for them as signatories for a company or for and on behalf of a company. In company matters a director, and/or a shareholder is a different entity from the company itself. Exhibits 18 and 18A were dated 6th September, 1983 and 5th September, 1983 and stated ‘the two per- f sons is (sic) known to me I consider him/her suitable to operate a current account in your bank’. There is no evidence before me that references about the referees were taken or checked. There is rubber stamp that reads ‘consid- g ered suitable to introduce current account customer/Signature verified on the attached form’. At the bottom of the rubber stamps are TAB 9983 in exhibit 18 but (sic) TAB in exhibit 18A. Though in exhibit 16 the particulars of another bank with which the applicants maintain an account was given as UNION BANK h OF NIG. LTD 40, MARINA, LAGOS, no reference about the new customer was taken before AKINPELU and OGBONNA commenced operating account 5085 on 12th September, 1983 when cash of N12,000 was drawn as shown in exhibit 19 and until 25th i November, 1983, when by cheque No. 116387 was used to collect N400. I hold and find as a fact that the defendant did not take reference from any other bank about its new customer for which company it opened an account on 5th September, 1983. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 221 a The 1st defence witness from the legal department testified that the department made search from the Company Registry. In exhibit 13A the company to be searched was A/C 5085 BROWN BOVERI NIG. LTD and recorded the entry passed on 13th Sep- b tember, 1983. This legal department did not query the difference between BROWN BOVERI NIG. LTD and not BBC BROWN BOVERI NIG. LTD so the search was not connected with BBC BROWN c BOVERI NIG. LTD but for BROWN BOVERI LTD with entry passed on 13th September, 1983. By exhibit 19 the account has already been operated before the result of the search by the legal department. d From the catalogue stated above by me applying the case of UNIC v. Muslim Bank (1972) 4 S.C. 69 at 77 I rule that the defendant has not complied with the usual practice of bankers not to open an account for a new customer without obtaining a reference and without due inquiry as to the customer’s standing. e In the instant case no reference was made or received be it BBC BROWN BOVERI NIG. LTD or BBC BROWN BOVERI NIG. LTD. The particulars from the record showed incorporation of 24th February, 1977 and the company was to open a new account in 1983. Prudence dictates that the defendant should have asked f for the previous banker of its new customer between 1977 and September, 1983, or enquire that the company was operated between the period without or through any bank. I therefore hold that the defendant as in Agbonmagbe Bank Ltd v. g CFAO (1967) N.M.L.R. 173 owed a duty of care to the plaintiff which duty of care was broken by not taking reasonable steps as a prudent banker in opening the account 5085 following irregularities enumerated above by me in the opening of account 5085 at the IKEJA BRANCH of the defendant. h The plaintiff suffered loss of N172,219 by the wrongful act of the defendant in paying the cheque not to the rightful beneficiary but to a wrong person. The loss has resulted in damage to the plaintiff and to which the plaintiff needed to be compensated.” i Dissatisfied with the judgment of the court below, the appellant filed five grounds of appeal from which it conceivably framed two issues – the same as the respondent. The real issue as I see it is this: “Whether the appellant was j negligent in its handling of the cheque matter knowing fully [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA 222 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. well that it owes a duty of care to the respondent and a whether the facts adduced disclosed contributory negligence by both parties.” The rather bizarre situation which was responsible for the b institution of the action in court was the detestingly ingen- ious act of stealing by Ugwumadu. Unknown to the respondent, he conspired as it turned out with some persons to open an account in a name corresponding to the respon- c dent’s and for some unaccountable reasons managed to hoodwink the appellant and succeeded in opening an account in the name of the respondent which money the conspirators managed to spirit away before ever it was detected. d The cheque was first issued on 26th May, 1983; later it was given to Ugwamadu to approach NEPA for regularisation but when the regularisation appeared to be taking a long time the respondent wanted to know from Ugwumadu what e was responsible for the delay. I shall set out plaintiff’s averment as pleaded in paragraph 8 of the further amended statement of claim. “Para 8: The said Mr Ugwumadu for a long time deceived the company by informing it that the regularisation re- f quested was yet to be done by the National Electric Power Authority because the relevant file was missing. After a while he was asked again about the cheque he had said that the responsible officer was on g leave. The plaintiff says that it was not unusual for it to wait for one year to get its bill paid by the National Electric Power Authority.” When nothing was forthcoming, the respondent became sus- h picious and demanded to know from NEPA by a letter dated 29th February, 1984 what actually was happening and it was to learn by a reply letter dated 16th March, 1984 and received on 20th June, 1984 that the cheque had long been i paid and value given to it since 5th September, 1983. Now the cheque was used in opening an account in the name of the respondent company during the time of waiting to know what really happened. The respondents in their claim alleged that the appellants were unduly negligent in that they did not j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 223 a take the necessary steps to protect their neighbour – being themselves. In Donoghue v. Stevenson (1932) A.C. 562 the Court of Appeal gave a new dimension to the tort of negli- b gence by its juristic definition of a neighbour. The law of negligence was given a boost by the judicial activism dis- played by Lord Atkin when he made a notable pronouncement in an action founded on tort. Prior to the famous pronouncement of Lord Atkin it was not thought that the duty c of care extended to the limit finally settled by that court (see the legal postulation of Brett M.R. in Heaven v. Pender (1883) 11 Q.B.D. 503 at 509). However, the society was ready to receive the wide construction as to whom a duty of d care is owed when Lord Atkin exploded in Donoghue v. Ste- venson (1932) A.C. 562 at 580:– “There must be and is some general conception of relations giving rise to a duty of care of which the particular cases found in the e books are but instances . . . The rule that you are to love your neighbour becomes in law you must not injure your neighbour and the lawyers question who is my neighbour? Receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your f neighbour. Who then in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omission which are called in question.” g Now in Donoghue’s case, the plaintiff sued the manufacturer of ginger beer for negligently leaving a snail in a bottle of ginger beer which he drank in a friend’s house. He could not sue the company for breach of contract and so decided to sue h in tort. The widening of the horizon of the law of negligence was not based on mere proximate ground as it was formally thought which was why the statement of Brett M.R. in Heaven v. Penders did not overly attract the attention of the i legal profession. I think the overall juristic definition of who is a neighbour as described by Lord Atkin in Donoghue’s case (supra) and the biblical description send across the message that a per- j son must take great care that he should not by any act of [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA 224 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. omission or commission engage in an action which would be a detrimental to his fellow being or a juristic person who may be affected by any untoward act. In other words, we must within the context of the biblical definition and Donoghue’s b case’s amplification or expatiation endeavour to be our brother’s keeper where our acts which, if unwittingly done, might jeopardise the interest of another due to lack of care. The concept of a neighbour in juristic parlance can be said to have its inception in the sociological reality of mankind that c people aggregate to form a country or society and one has to exercise care that he does not engage or indulge in acts that would militate against the interest of the neighbours. Applying the law in this case the respondent is saying that d the appellant owes a duty of care to it and it was in its failure to exercise care that it negligently ran foul of the legal duty of care. In its further amended statement of claim the respondent pleaded as follows:– e “Particulars of Negligence Paragraph 24(i)–(x):– (i) Failure to confirm (sic) to the necessary banking practice in dealing with new customers. f (ii) Failure to obtain necessary reference before opening the account for BBC Brown Boveri (Nig.) Ltd. (iii) Failure to obtain and sight the original certificate of incorporation of the company. (iv) Failure to obtain a certified true copy of the resolution of g the Board of directors stating:– (a) Authority to open account (b) Mode of operation and attesting authorised signatures (v) Failure to obtain evidence of compliance with the provi- h sions of the Nigeria Enterprises Promotion Act, 1977. (vi) Failure to obtain Resident permit of the Expatriate director. (ix) Failure to demand and obtain Memorandum and Articles of Association of the company duly certified by the registrar i of companies or duly attested by a Notary Public after the original must have been sighted. (x) Failure to make necessary enquiries when the date on the cheque to be deposited was 26th May, 1983 and the date for opening the account was 2nd September, 1983. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 225 a By setting these particulars down the rule of evidence prescribes that these should be proved to show how and why the act of the appellant was negligent.” b Now was there a duty of care owed by the appellant to the respondent? The respondent had never been a customer of the appellant and therefore a bank-customer relationship cannot be imputed. How then could the appellant owe a duty of care? In this respect I have to consider whether the ac- c count opened in the name of the respondent from the facts at its disposal, the appellant could have been labelled negligent in that it did not adequately and consciously and carefully address itself on the implication of opening that account. d The complaint and the consequent claim in damages would necessarily involve, I believe, some conscientisation of the frame of mind of the bank. In Deyong v. Shenburn (1946) 1 A.E.R. 226 the appellant and the respondent agreed that the appellant should perform some pantomime acts in his thea- e tre. During the rehearsal, the appellant’s stage-wearing dress and some valuable property were stolen. He sued the respondent for negligence claiming that he owed him a duty of care. In the Court of Appeal Du Parcq LJ stated as follows f after agreeing with the decision in Heaven v. Pender (supra) and Donoghue v. Stevenson (supra):– “It is not true to say that wherever a man finds himself in such a position that unless he does a certain act another person may suffer or that if he does something another person will suffer then it is his g duty in the one case to be careful to do the act and in the other case to be careful not to do the act. Any such proposition is much too wide. One has to find that there has been a breach of a duty which the law recognised, and to see what the law recognises, one has to look at the decision of the courts. There has never been a decision h that a master must merely, because of the relationship which exists between a master and servant, take reasonable care for the safety of his servant’s belonging, in the sense that he must take steps to ensure so far as he can that no wicked person shall have an opportunity of stealing the servant’s goods.” i I might here refer to the illuminating decision of Widgery J in Weller v. Foot and Mouth Disease Research Institute (1965) 3 All E.R. 560 at 570:– “The duty of care arose only because a lack of care might cause di- j rect injury to the person or property of someone and the duty was [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA 226 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

owed only to those persons or property [which] were foreseeably a at risk. The decision in Hedly Byrne and Co Ltd v. Heller and Partners Ltd (sic) (1963) 2 All E.R.475 does not depart in any way from the fundamental that there can be no claim for negligence in absence of a duty of care owed to the plaintiff. It recognises that a b duty of care may arise in the giving of advice even though no contract or fiduciary relationship exists between the giver of the advice and the person who may act on it and having recognised the existence of the duty it goes on to recognise that indirect or eco- c nomic loss will suffice to support the plaintiff’s claim. What the case does not decide is that an ability to foresee indirect or economic loss to another as a result of one’s conduct automatically imposes a duty to take care to avoid that loss.” d Contrast this case with Ward v. Tresco Stores Ltd (1976) 1 All N.L.R. 219 where a plaintiff took an action against the store owners on the ground that she slipped and fell on a slippery floor arising out of spilt yoghurt which had not been cleaned. Although the store owner maintained that the floor e was normally cleaned about five to six times a day, the Court of Appeal held, by a majority judgment (Ormold LJ dissenting) that the store owners were liable as they owed a duty of care to any one entering the store. If an ill wind blow f a suffocating stench from the direction of someone selling Akara balls and a groundnut seller with the result that the potential buyers could not stop by to buy their favourite snacks does the dirty man owe a duty of care to the akara g sales girl? I would say no. Care must be taken to see that a clear understanding of the ramifications of the decisions in Donoghue v. Stevenson and subsequent like decisions are well understood and applied; otherwise we shall let loose a wide geese and the court will be filled with suits from all h manner of nondescript charlatans and miscreants. In his evidence in the court below, one Godwin Osadebe for the plaintiff/respondent said:– i “My Company is the Secretary to the plaintiff Company . . . The Chairman of the Company is Shehu Mallami. The directors of the Company as of present are Alhaji Shehu Mallami, Jocked managing director, Ohi Olisa Ismail and Swiss non-Resident in Nigeria . . . To the best of my knowledge, there was no resolution j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 227 a between May, 1983 and September, 1983 wherein the defendant was appointed bankers of the plaintiff. During the period, my company Harban Secretaries was plaintiff’s secretary and has been so since 1977 till today.” b In his evidence Miss Adeola Olojo a senior legal officer attached to the appellant bank said that they normally conducted searches and she tendered exhibits 13 and E13 which are meant to show that a search was conducted in respect of c opening of an account for the respondent. Mrs Aderanke, also of the bank testified how she asked for and was given a resolution to authorise the opening of an account with the respondent’s bank. The main body of exhibit 14 which ap- d proved the resolutions reads as follows:– “Extract from the Minutes of the Board of Directors Meeting. The Meeting started as scheduled and the most important item was discussed and finished. It was unanimously agreed that an account e should be maintained at the Wema Bank, Ikeja with Mr Simeon Olu Akinpelu (General Manager) and Mr Johnson Uwalaka Og- bonna (Accountant) as the signatories to the said account. It was also agreed that the account should be used for the day-to-day expenses of the company and all outstanding cheques should be paid f into the said account.” She compared the original certificate of incorporation with the photocopy and was satisfied that it was not a fake. Ac- cording to her, several documents she requested for were g made available and these she tendered in the court. Having satisfied herself that all the documents needed for opening a corporate account like the respondent’s were not faked she caused account 5085 in the name of the company to be opened. h One interesting feature of this case is that the respondent did not in any way attempt even in the slightest degree to prove the particulars of negligence pleaded. Nevertheless, the pleading having been set out, the appellant’s witnesses i dutifully and carefully answered all the allegations of gross negligence. I think the wholesome meticulous manner in which the appellant took to know who were the people who approached j it to open an account in the name of the respondent company [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA 228 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. testifies that it did what was expected of it, i.e. to request for a the necessary documents. Equally the process of demanding to see important documents in this direction readily pro- claims that the appellant felt it owed a duty of care to the re- b spondent which was why it took time to make the demands of the documents. It will be setting an awfully super- standard performance to expect a bank to conceive in all likelihood that the person or persons about to open an account on behalf of a company are a bunch of crooks even c after satisfying itself by looking at all the necessary documents and everything appears to be in order. Barring any eventualities it could not but open an account on the face of the documents shown to it (see Motor Traders Guarantee d Corporation v. Midland Bank Ltd (1937) 4 All E.R. 90 at 96). In Imo Concorde Hotel Ltd v. Anya (1992) 4 N.W.L.R. (Part 234) 210 at 220 the Court of Appeal stated as follows:– “To succeed in an action in negligence the plaintiff or the com- e plainant must establish three essential ingredients, to wit, the existence of a duty to take care owing to the complainant by the defendant, failure to attain the standard of care prescribed by the law and damage suffered by the complainant which is causally connected with the breach of duty to take care”. f From the evidence adduced and the circumstances of the case, I am satisfied that the appellant went the extra mile to make sure that it did not buy a pig in a poke. To expect more g from it, is to be unrealistic and to use super human effort, or have the foreseeability not usually associated with mortals of this world. In my opinion the appellant was not negligent. It discharged its duties as a banker creditably. h As for the question of contributory negligence it is indeed a non-issue in this case. This is a plain case of theft by Ug- wumadu and his cohorts. It is a criminal matter. However, the respondents can pursue the case against Ugwumadu and i his fellow conspirators. I am satisfied that the appellant did all that was expected of it. It is simply not liable. In the final analysis the appeal succeeds and the judgment of the learned trial Judge is hereby j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 229 a set aside. The respondents shall pay costs assessed at N3,000. MUSDAPHER JCA: I have had the honour to read in advance b the judgment of my lord Pats-Acholonu JCA, just delivered. I respectfully agree with the conclusion arrived thereat. I have nothing to add. I abide by the consequential orders contained. c UWAIFO JCA: The plaintiff/respondent was issued a cheque dated 26th May, 1983 for N172,219 by the National Electric Power Authority (NEPA) drawn on the Central Bank of Ni- geria. The cheque was collected by one Mr G. Ugwumadu, d whose official duty it was to do so on behalf of the plaintiff. When he was about to lodge the cheque with the plaintiff’s bank it was discovered that only one signature instead of two was appended on it by NEPA. e The plaintiff made a photostat copy of the cheque and instructed Mr Ugwumadu to return it to NEPA for the second signature. This was done. But rather than Mr Ugwumadu paying the cheque into the plaintiff’s usual bank account, he f contrived a plan to open an account in the name of the plaintiff with another bank. He chose the defendant bank’s branch at Ikeja. In conspiracy with one Simeon Olu Akink- pelu and one Johnson Uwalaka Ogbonna, an account was g successfully opened early in September, 1983, the said two persons being made the authorised signatories to the account. The defendant/appellant say that the said Akinpelu and h Ogbonna were presented as general manager and accountant respectively of the plaintiff company. In support of the request to open an account in the name of the plaintiff company by them, the following were submitted: (1) The original Certificate of Incorporation of the plaintiff company i which was sighted and returned, that fact having been endorsed on a photostat copy of the said certificate; (2) extracts from the minutes of the board of director’s meeting, conveyed by a letter dated 2nd September, 1983 with j the plaintiff company’s reference number to the Ikeja branch [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 230 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. of the defendant bank, wherein Akinkpelu and Ogbonna a were described as the authorised signatories to the account proposed to be opened; (3) a copy of the Memorandum and Articles of Association of the plaintiff company duly signed b by the subscribers. The identities of the two proposed signatories were subsequently verified by referees in the appropriate forms supplied by the defendant bank. The passport photographs and c usual signatures of the proposed signatories were obtained. The account was opened on 5th September, 1983 and cash and the said cheque lodged. The defendant bank went further to search and confirm the due incorporation of the d plaintiff company, an exercise I would consider gratuitous having regard to the Certificate of Incorporation produced before the bank. The first withdrawal was on 12th Septem- ber, 1983. As at 30th December, 1983 up to when the ac- e count was operated, the credit balance stood at N27.52k. It was not until 26th February, 1984 that the plaintiff made inquiries from NEPA about the cheque when it became suspicious of the delay. On 20th June, l984 the plaintiff re- f ceived a letter dated 16th March, 1984 from NEPA that the required second signature had since been appended to the cheque and that it had since September, 1983 been paid. The police were called in and upon investigation it was discovered that an account had been opened with the defendant’s g Ikeja Branch and the said cheque paid into it. The plaintiff, having waited in vain for the police to indicate the steps being taken for possible prosecution, demanded through their solicitors from the defendant, a refund of the amount of h N172,219 involved together with 6% per annum interest from 5th September, 1983 until judgment and thereafter 4% per annum until the judgment debt and costs were paid. Then followed the suit which gave rise to this appeal. i The plaintiff relied on negligence on the part of the defendant, the particulars of which were pleaded as follows:– “(i) Failure to conform to the necessary banking practice in dealing with new customers. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 231 a (ii) Failure to obtain necessary reference before opening the account for BBC Brown Boveri (Nigeria) Limited. (iii) Failure to obtain and sight the original Certificate of Incor- b poration of the company. (iv) Failure to obtain a certified true copy of the resolution of the Board of directors stating:– (a) Authority to open account. (b) Mode of operation and attesting authorised signatures. c (v) Failure to obtain evidence of compliance with the provisions of the Nigerian Enterprises Promotion Act, 1977. (vi) Failure to obtain from the Registrar of Companies a certified true copy of the list of directors of the company. d (vii) Failure to obtain resident Permit of the Expatriate director. (ix) Failure to demand and obtain Memorandum and Articles of Association of the company duly certified by the Registrar of Companies or duly attested by a Notary Public after the e original must have been sighted. (x) Failure to make necessary enquiries when the date on the cheque to be deposited was 26th May, 1983 and the date for opening the account was 22nd September, 1983.” f The plaintiff did not make even the slightest effort to lead evidence in support of the alleged negligence of the defendant. The particulars of negligence pleaded turned out to have been done for mere fancy. The four witnesses who testified for the plaintiff ended up giving evidence incapable of g supporting the claim to any degree. On the other hand, the defendant bank led evidence particularly through their second witness, Mrs Aderonke Akinremi, an employee at the Ikeja branch in charge of the opening of current accounts h and keeping Treasury Books. She testified as to the procedure normally followed by the defendant bank in opening a current account for customers. That was the procedure adopted in the present case. I have earlier stated the document called for and seen by the defendant, and the steps i taken by them before a current account was opened in the name of the plaintiff company. There is nothing to show that the defendant bank were negligent. There is nothing in this case to show that there were any legal requirements which j the defendant bank failed to satisfy themselves on. What [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 232 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. they did was probably the best a prudent banker would do in a the circumstances. However, the learned trial Judge found the case proved. He held that the defendant bank were negligent. He observed b inter alia as follows:– “The plaintiff suffered loss of N172,219 by the wrongful act of the defendant in paying the cheque not to the rightful beneficiary but to a wrong person. The loss has resulted in damage to the Plaintiff c and to (sic) which the plaintiff needed (sic) to be compensated . . . From the foregoing I enter judgment for the plaintiff against the defendant for the sum of N172,219 being damages for negligence on the part of the defendant in breaching the duty of care owed to the plaintiff when the cheque of which the plaintiff was the benefi- d ciary was unlawfully used in opening account 5085 at the Ikeja Branch of the defendant on 5th September, 1983.” The judgment debt of N172,219 was to attract interest of 4% from the date of judgment until full payment thereof. e The defendant in their appeal against the judgment have raised the issue whether the plaintiff proved its case based on the grounds that the defendant were negligent. The further issue is whether there was no contributory negligence f on the part of the plaintiff. The real issue is whether the defendant were negligent in opening an account in the name of the plaintiff in order to credit it with a cheque issued in its name having regard to g the facts made available to them. Before going into that I find it irresistible to say at once that the learned trial Judge misapplied the case of United Nigeria Insurance Co Ltd v. Muslim Bank (West Africa) Ltd (1972) 4 S.C. 69 which he strongly relied on. In that case the Supreme Court observed h at 77–78, which observation also reveals the relevant facts, as follows:– “It is clear law that if X draws a crossed cheque marked ‘A/C Payee only’ on the Y bank in favour of Z and sends it by ordinary i post in the course of which it is stolen and comes into W’s hands who personates Z by forging his signature and opening an account with a banker with the stolen cheque, the banker will be liable in negligence and will not be protected under section 82 of the Bills of Exchange Act, 1882 if he fails to make necessary inquiry about j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 233 a W’s identity or character before collecting the cheque for W’s account: Lagbroke and Co v. Iodd (1914) 111 L.T.43, approved in Lloyds Bank v. Savory (1933) A.C. 201. b We, therefore, hold that the defendant/respondent bank was negligent in not obtaining satisfactory references when opening the savings account for Mr Olatunde Odubiyi or when the latter came to deposit the cheque for £550 two days later especially as they had failed to make an initial inquiry about the prospective customer. c The defendant/respondent had failed to observe the standard expected of the reasonable banker.” It is clear from the above that (1) a cheque marked “A/C payee only” was permitted to be credited to the account of a d person not the payee; and (2) no necessary inquiry was made about the identity or character of the said person. In the present case the cheque in question was lodged into the payee’s account which had been opened upon request. Secondly, the defendant made all necessary inquiry and received what e looked like genuine information and particulars before opening the said account. The case of the United Insurance Com- pany Ltd v. Muslim (West Africa) Bank Ltd (supra) does not therefore compare with the present case. f The plaintiff’s suit is founded on the tort of negligence. As stated at paragraph 659 page 474 of Clerk and Lindsell on Torts (14ed):– “The tort is traditionally described as damage, which is not too g remote caused by a breach of duty of care owed by the defendant to the plaintiff. This formula yields six ingredients of liability. (1) A duty of care situation, i.e. recognition by law that the careless infliction of the kind of damage in suit on the type of person h to which the plaintiff belongs by the type of person to which the defendant belongs is actionable. (2) Foreseeability that the defendant’s conduct would have inflicted on the plaintiff the kind of damage in suit. (This is what is implied in the statement that the duty of care has to be ‘owed’ to the plaintiff). (3) Proof that the de- i fendant’s conduct was careless, i.e. that it failed to measure up to the standard and scope set by law; breach of duty. (4) There must be causal connection between the defendant’s carelessness and the damage. As long as these four requirements are notified, the defendant is liable in negligence. Only then do the remaining consid- j erations arise, namely, (5) the extent of the damage attributable to [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 234 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

the defendant; and (6) the monetary estimate of that extent of a damage.” The Supreme Court in Abusomwan v. Mercantile Bank Ltd (No.2) (1987) 3 N.W.L.R. (Part 60) 196 at 208–209 seems b to have adopted the reasoning of Lord Wilberforce in Anns v. Morian London Borough Council (1978) A.C. 728 at 751–752 that in order to establish whether a duty of care arises in a particular situation, it is not necessary to bring the c facts of the situation within those of previous situations in which a duty of care has been held to exist. But rather:– “First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient rela- d tionship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the later – in which case a prima facie duty of care arises. Secondly, if the first question is answered af- e firmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty of the class of person to whom it is owed or the damages to which a breach of it may give rise.” f In the present case, the first question is what was the relationship or neighbourhood which ought to impel the defendant to act with care towards the plaintiff as regards the cheque? In my view, the fact that a cheque bearing the plaintiff’s name as drawee was brought to the notice of the de- g fendant established a relationship which demanded that there was a duty of care to be exercised in regard to the cheque. That duty is fulfilled if the cheque is not paid into another person’s account but the plaintiff’s. It goes beyond that. The h duty requires that if an account in the plaintiff’s name is going to be opened so that the cheque may be paid in, necessary information to support the request for the opening of such account ought to be sought and obtained by the defen- i dant. The defendant certainly, in my opinion, complied with these two conditions. They did not, therefore, breach, that duty of care towards the plaintiff. They were not expected to go beyond what they did to turn themselves into detective investigators before opening that account and dealing with j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA Wema Bank Limited v. BBC Brown Boveri Nigeria Limited 235 a the cheque in the absence of any veritable fact arousing suspicion. How then can the defendant be said to have been negli- b gent? What did they do or omit to do to constitute negligence? In Bingham’s Motor Claims (7ed) page 4, the following passage appears:– “Negligence is the omission to do something which a reasonable c man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do. Blyth v. Birmingham Water Works Co. (1856) 11 Ex 781, 25 LJ Ex. 212, WR 204. Negligence may be said to consist in a failure to exercise due care d in a case in which a duty to take care exists. The general concept of reasonable foresight is the criterion of negligence and is fluid in its application; it has to be fitted to the facts of the particular case; Lord Wright in Bourhill v. Young (1943) e A.C. 92 at 107. Negligence is not established by proving that the loss might possibly and with extraordinary foresight and prudence have been avoided: Rothschild v. Royal Mail Steam Packet Co (1851) 18 L.T. 334; Hart v. Lanci and Yorks Rail Co (1869) 21 L.T. 261.” f I am in no doubt that the judgment of the learned trial Judge (Onalaja J) cannot stand in the face of the evidence. Negli- gence was not established against the defendant/appellant by the plaintiff/respondent. The onus is on the person alleging g negligence to lead evidence in proof of the particulars of negligence (see Nigerian Bottling Co Ltd v. Ngonadi (1985) 1 N.W.L.R. (Part 4) 739). To have attributed negligence to the defendant bank in the circumstances of this case was tan- h tamount to expecting them to have acted with extraordinary foresight and prudence – or even with a sense of premonition. The evidence adduced by them showed that they acted reasonably and prudently. The issue of contributory negligence on their part will not arise because when a person who i has the burden of leading evidence in proof of negligence, as the plaintiff in this case, fails to do so there can be no question of contributory negligence on the part of the defendant (see United Bank for Africa Ltd v. Auhoru (1990) 6 j N.W.L.R. (Part 156) 254 at 275). In any case, contributory [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 236 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. negligence was not pleaded and relied on by the defendant a and could not therefore have been properly considered. I too will allow the appeal, set aside the judgment of the lower court and dismiss the suit with costs of N3,000 in favour of b the defendant/appellant. Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION)

National Bank of Nigeria Ltd v. Trans Atlantic Shipping Agency Ltd 237 a National Bank of Nigeria Limited v. Trans Atlantic Shipping Agency Limited b COURT OF APPEAL, IBADAN DIVISION MUKHTAR, ADAMU, OKUNOLA JJCA Date of Judgment: 6 MAY 1996 Suit No.: CA/I/133/93 c Banking – Negligence – Negligent act of employee of banker – Effect on the employers Banking – Vicarious liability of banker – How determined – Wrongful act of bank employee – When binding on the bank d Facts Certain persons without the knowledge of the respondent opened an account with the appellant in the name of the re- e spondent and same was opened without strict compliance with the laid-down procedures of the bank. The cheque belonging to the respondent was cleared through the account. The respondent thereafter sued the appellant for the total f sum of the cheque paid by the appellant to the unknown persons. The High Court gave judgment in favour of the respondent herein, the appellant dissatisfied, appealed to the Court of Appeal. g Held – A bank is vicariously liable via its servant where there has been non-compliance and failure to strictly adhere to the banking regulations and rules relating to the procedure and h documents required for the opening of a bank account by a corporate body as such amounts to negligence. Appeal dismissed. i Cases referred to in the judgment Nigerian A.C.B. Ltd v. Apugo (1995) 6 N.W.L.R. (Part 399) 65 j Adimora v. Ajufo (1988) 3 N.W.L.R. (Part 80) 1 [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION)

238 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Brown v. Citizens Life Assurance Co (1902) 2 W.S.W.R. a 212 Ebueku v. Amola (1988) 2 N.W.L.R. (Part 75) 128 Habib (Nig.) Bank Ltd v. Koya (1992) 7 N.W.L.R. (Part b 251) 43 Mutual Aids Society Ltd v. Akerele (1965) 1 All N.L.R. 336 Nsirim v. Nsirim (1990) 3 N.W.L.R. (Part 138) 285 c Nwabuoku v. Ottih (1961) 2 S.C.N.L.R. 232 Obi v. Owolabi (1990) 5 N.W.L.R. (Part 153) 702 Okupe v. Ifemembi (1974) 3 S.C. 97 Foreign d McGowan v. Dyer (1873) L.R. 8 Q.B. 141

Book referred to in the judgment Clerk and Lindsell on Torts (14ed) paragraphs 859, 991–994 e and 1007

Counsel For the appellant: Jegede (with him Fashakin) f For the respondent: Oyesanya

Judgment g MUKHTAR JCA: (Delivering the lead judgment): In the court below the respondent who was then the plaintiff instituted an action against the appellant and one of its servants. Someone forged a letter bearing the plaintiff’s name to the h second defendant informing it that it had appointed it as its bankers. This was unknown to the plaintiff. The bank opened an account No. 00051 in the plaintiff’s name without satisfying and complying with many of its regulations, with unknown persons as signatories to the said plaintiff’s ac- i count. On various dates cheques were drawn by persons unknown to the plaintiff from the account after a cheque for N300,000 payable to the plaintiff’s company had been credited into its account by its employee, called Friday Essien. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA National Bank of Nigeria Ltd v. Trans Atlantic Shipping Agency Ltd 239 a According to the plaintiff the second defendant is thus accountable to the plaintiff for the whole sum of N300,000 being proceeds of the cheque, for reasons of the first defen- b dant’s negligence in its failure to verify, investigate and comply with banking regulations. Consequently the plaintiff claimed jointly and severally against the defendants as follows:– “1. The sum of N300,000 being proceeds of U.B.A. cheque No. c ZN611680 dated the 9th December, 1983 issued in favour of the plaintiff but negligently received by the defendants into account No. 00051 opened by the defendants on behalf of unknown persons who operated the same in the name of d unknown and fictitious person/s inter alia as Trans Atlantic Shipping Agency Limited or Trans Atlantic Shipping Agencies Limited. 2. Interest at the rate of 6% per annum on the said sum of N300,000 from the 14th December, 1983 until judgment is e delivered in this suit and thereafter at 10% until the said sum of N300,000 is paid in full to the plaintiff.” The second defendant denied that it acted negligently in opening the said account, allowing it to be operated by per- f sons unknown to the plaintiff and consequently resulting in the plaintiff’s loss of N300,000. The plaintiff and the second defendant exchanged pleadings to wit there was the plaintiff’s reply to statement of g second defendant. The first defendant did not file any defence. The plaintiff and the defendant adduced evidence, which the learned trial Judge evaluated. At the end of the day the plaintiff’s case was found proved and judgment was h given in its favour. Aggrieved by the judgment the second defendant has appealed to this Court on eight grounds of appeal. In compliance with Order 6 of the Court of Appeal Rules, 1981 the appellant and respondent exchanged briefs of argument which were adopted at the hearing of the ap- i peal. As is the practice, the appellant raised four issues for determination from the grounds of appeal, and the respondent raised three issues in their brief of argument. I will adopt the appellant’s issues, and will deal with them indi- j vidually as the appeal progresses. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA 240 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Before I proceed with the arguments I would like to con- a sider some points raised in the respondent’s brief of argument. In the said brief of argument, what looked like a prelimi- b nary objection (though not so called) was raised on some of the appellant’s grounds of appeal and formulated issues in the appellant’s brief of argument. Learned Counsel’s submission on this is that all the issues with the exception of is- c sue no. 1 are either largely misconceived or irrelevant to the matters raised. The question here is, is the respondent permitted to raise such preliminary objection the way he did, without filling d either a motion or a notice of preliminary objection on the grounds of appeal he is seeking to attack? I think not, for Obaseki JCA (as he then was) in the case of Nsirim v. Nsirim (1990) 3 N.W.L.R. (Part 138) 285 said:– e “In my opinion, there is substantial merit in the contention of the respondent. Being a preliminary objection, the objection should have been by motion on notice before the hearing of the appeal so the argument on it can be heard by the court. While notice of objection may be given in the brief, it does not dispense with the f need for the respondent to move the court at the oral hearing for the relief prayed for.” I am guided by the above statement (see also A.C.B. Ltd v. Apugo (1995) 6 N.W.L.R. (Part 399) 65 and Sylvanus Obi v. g Chief Owolabi (1990) 5 N.W.L.R. (Part 153) 702). In this respect I am discountenancing the reliefs sought in respect of the grounds of appeal and issue in the respondent’s brief of argument, for countenancing the issues sought to be ig- h nored will result in striking out related grounds of appeal. The appellant’s first issue is whether the trial court misconceived the issues which arose from the pleadings and the claim of the respondent. The issue borders on the age-long i elementary principle of pleadings which have often times been described as a vital part of litigation, in that it is notice of the facts on which parties intend to reply and prove their case. A deviation from the pleadings is not permissible in law, hence the often repeated and over-flogged principle of j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA National Bank of Nigeria Ltd v. Trans Atlantic Shipping Agency Ltd 241 a the law that parties are bound by their pleadings (see Ebueku v. Amola (1988) 2 N.W.L.R. (Part 95) 128 and Adimora v. Ajufo (1988) 2 N.W.L.R. (Part 80) 1). In this appeal learned b Counsel for the appellant has argued that the respondent’s adduced evidence is at variance with its pleadings, in that, in its pleadings it pleaded negligence on the part of the appellant in the opening account, whereas in the trial the evidence points at fraud. It is learned counsel for the respondent’s ar- c gument that the respondent pleaded both fraud and negligence, although as per paragraph 25 of the claim, the respondent’s case was based on the tort of negligence. At this juncture it will be helpful to look at the respon- d dent’s pleadings. It is a fact that the pleading contained more of allegations of negligence by the appellant, but there is also an element of fraud, as is averred in the following paragraph of the statement of claim:– e “12. The plaintiff relying upon procedure laid down in the said company mandate instructions pleads that, for perpetration of fraud on the said plaintiff by the person/s unknown who opened or operated the said account No. 00051 in the name f of Trans Atlantic Shipping Agency (or Agencies) Ltd.” The above averment, to my mind, are as clear as crystal, as far as the issue of fraud is concerned, so contrary to the argument and view of learned Counsel for the appellant that g the respondent did not plead fraud, it did actually plead fraud (vide the above reproduced paragraph of the statement of claim). This therefore puts to rest the quarrel that the learned trial Judge should not have based his judgment inter h alia on the evidence of fraud. As I said earlier on, the respondent’s case is hinged primarily on negligence, as is evidenced in a substantial part of its pleadings and evidence in support, with paragraph 24 accentuating and highlighting the alleged negligence. Paragraph 24 of the statement of claim i reads:– “24. Failure of the bank to comply with any of the procedures pleaded in paragraph 23 above and hereby averred by the plaintiff to be relevant to opening a new account for a cus- j tomer or a corporate body is an act of negligence which [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA 242 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

renders the bank accountable to the plaintiff for the sum of a N300,000 being the proceeds of the cheque aforesaid.” Learned Counsel for the appellant has argued in his brief of argument that there is no shred of evidence before the court b to support and or establish negligence. In reply learned Counsel for the respondent has submitted that their fifth witness has shown that the appellant through its servant had a duty of care to discharge to the public, and even called PW4, c a banker, on that duty of care. Indeed PW5 in his evidence testified inter alia thus on page 77 of the printed record of proceedings:– “Exhibit ‘H’ did not emanate from the plaintiff’s company; the let- d ter headed paper is not the plaintiff’s. There is no one by the name of Felix Ewoh in the plaintiff’s company. Neither is there any Adekunle Robberts in the plaintiff company as Project Manager. As at 12/12/83 the date on exhibit ‘H’ – Company had one Mr La- lit Malhotra as the managing director. I was familiar with his hand e writing. I could recognise any document signed by him. The signature on exhibit ‘H’ said to be that of managing director (M.D.) is not that of Mr Lalit Malhotra. I do not know any of the signatories to exhibits J, L and M in connection with the plaintiff’s company. None of exhibits J, L and M emanated from my company. As at f the time of this event the secretary to the plaintiff was the firm of Adedolapo Fayomi and Company. The plaintiff company had no dealing with any of the signatories to exhibits J, L and M . . . exhibits F and G are not the Memorandum and Articles of Associa- tion, or the Certificate of Registration of our company. Their com- g pany did not write any letter of introduction to the second defendant. The rubber stamp impression placed on exhibits L, D–D2 is not that of my company.” The above evidence was not challenged nor debunked by the h appellant’s counsel in the cross-examination. It has been reiterated in a host of authorities by this Court and the Su- preme Court that admissible evidence that is relevant to the issues in a case and that has not been successfully attacked i or contradicted remains credible and reliable evidence which ought to be used and relied upon by a trial Judge (see Nwabuoku v. Ottih (1961) 2 S.C.N.L.R. 232; (1961) 1 All N.L.R. 487; Okupe v. Ifemembi (1974) 3 S.C. 97 and Habib (Nig.) Bank Ltd v. Koya (1992) 7 N.W.L.R. (Part 251) 43). j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA National Bank of Nigeria Ltd v. Trans Atlantic Shipping Agency Ltd 243 a In this respect the reproduced evidence supra is good and credible evidence. This evidence reconciled with the evidence of PW4, a professional banker, who testified on the b procedure and documents required for the opening of an account by a corporate body in any bank where the corporate body wishes to open the account, shows that the appellant failed to comply with the laid-down procedures when the purported respondent’s account was opened. The non- c compliance and failure to strictly adhere to the banking regulations and the rules by the appellant’s servant therefore amounted to negligence on the part of the appellant via its servant through whom he was vicariously liable. Moreover, d a perusal of the evidence of the sole defendant witness discloses admission of the negligence of the appellant’s servant. On page 106 of the printed record of proceedings can be found the following pertinent piece of evidence:– e “The first defendant did not follow the procedure in opening the account of the plaintiff’s company in this case. Yes the first defendant did open other company account and followed the normal procedure.” f Suffice it to say that the above has abundantly supported the plaintiff’s case. A party can take advantage of the oppo- nent’s case that supports his case, and it will be correct for the learned trial Judge to make use of such evidence where g he finds it relevant and reliable. The requirements of the tort of negligence as is described in paragraph 859 of Clerk and Lindsell on Torts (14ed) states:– h “The tort is traditionally described as a damage which is not too remote, caused by a breach of a duty of care owed by the defendant to the plaintiff.” For the foregoing argument I would say the answer to the i issue is in the negative and so grounds of appeal no. (1) and (8) to which the issue is married fail, for I fail to see how the learned trial Judge erred. The next issue formulated is whether the judgment of the j criminal court, exhibit P, operated as issue estoppel against [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA 244 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the plaintiff. It is learned counsel for the appellant’s case a that exhibit P, the judgment in a criminal case against one Friday Essien, an employee of the respondent and Victor Adebayo Owoade, the servant of the appellant satisfy all b conditions required to raise an issue estoppel. In exhibit P Victor Adebayo Owoade, the first defendant, was convicted of the offence of conspiracy and stealing. The contention of the learned Counsel for the appellant is that it was not open to the respondent to re-open the issue and make a case c against the first defendant. He placed reliance on the cases of Fadiora v. Gbadebo (1987) 3 S.C. 219 and Crown Estate Commissioner v. Dorset County Council (1990) 1 All E.R. 19. To succeed in raising an issue estoppel the following re- d quirements must be met, namely:– 1. The earlier judgement in the earlier action must have been final, conclusive and on the merits. e 2. The earlier action and the later one must be the same. 3. The parties in both actions are the same. The learned counsel for the respondent has submitted that the parties in exhibit P and the present action are not the f same. Indeed, the opposing parties are different, and I disagree with the learned appellant’s Counsel submission that the respondent is a privy of the Commissioner of Police. Be- sides, a finding of fraud by the Magistrate’s Court will not g estop the High Court from making another finding of negligence on the same facts, for they are two separate and distinct issues. In the light of the foregoing reasons I resolve this issue in favour of the appellant. Its related grounds of h appeal nos. (2) and (6) fail. Issue no. 3 is whether the appellant could be affixed with civil liability for the deliberate and fraudulent act of the first defendant. i (a) Was the first defendant acting within the scope of his authority? (b) Was the appellant estopped from denying liability for its employee’s action? j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA National Bank of Nigeria Ltd v. Trans Atlantic Shipping Agency Ltd 245 a In arguing this issue learned Counsel for the appellant ve- hemently argued the scope of liability of the appellant to his servant’s act of fraud or whatsoever. He referred to a long b line of authorities like Cheshire v. Bailey (1904–7) All E.R. 882; Armages Ltd v. Mundogas A.R. (1986) 2 All E.R. 385; Ruben v. G.T. Fingall Consolidated (1904–7) All E.R. Rep 460; Salawu v. Union Bank of Nig. Ltd (1986) 4 N.W.L.R. (Part 38) 701; Morris v. Martin and Sons (1965) 2 All E.R. c 725 and McGowan v. Dyer (1873) L.R. 8 QB 141, from which he copiously reproduced portions in his brief of argument. I have gone through the facts and decisions on the cases and my view is that they are distinguished from the d instant case, in that in this case the first defendant was employed by the appellant, and at that material time of the inci- dent, that is the crux of this appeal, he was authorised by the appellant to be in charge of one of its branches, to wit he had authority to transact any business on behalf of the appellant e inclusive of the act of opening accounts for its prospective customers, and to receive and pay money to and from the said customers. Even though he was not a cashier he was the overall boss in that branch, through whom many transactions f had to pass. As the representative or agent of the appellant, even if he carried out instructions that were contrary to the appellant’s, he reached out to do so in the name of the appellant who employed him and placed him there on its behalf, g and part of his function was to open accounts even though he deviated from the set-down procedure for doing so. That a wrongful act of a servant is within the ambit of a servant’s employment is a matter that is a question of fact. h The test that is oftentimes adopted is that a servant’s wrongful act is deemed to be in the course of his employment if it is either:– (a) a wrongful act authorised by the master, or i (b) a wrongful act and unauthorised mode of doing some act authorised by the master. See Mutual Aids Society Ltd v. Akerele (1965) 1 All N.L.R 336 and Brown v. Citizens Life Assurance Co. (1902) 2 j W.S.W.R. 212. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA 246 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Blackburn J in the Mcgowan and Company Ltd’s case (su- a pra) discussed the issue of liability to the third persons as is set out in Story on Agency in the following words:– “In Story on Agency, the learned author states, in section 452, the b general rule is that the principal is liable to third person in a civil suit ‘for the frauds, deceipts, concealment, misrepresentations, torts, negligence and other malfeasances or misfeasances, and omissions of duty of his agent in the course of his employment, although the principal did not authorise or justify, or participate, in, c or indeed know of such misconduct, or even if he forbade the acts, or disapproved of them’. He then proceeds in section 456: ‘But although the principal is thus liable for the torts and negligence of his agent yet we are to understand the doctrine with its limitations that the tort of negligence occurs in the course of the agency. For d the principal is not liable for the torts or negligence of his agent in any matter beyond the scope of the agency, unless he has expressly authorised them to be done, or he has subsequently adopted them for his own use and benefit.’” e Perhaps, if one looks carefully at the evidence of the appellant’s witness one will be able to determine whether or not the first defendant exceeded the scope of his authority. In his cross-examination on page 107 of the printed record of pro- f ceedings DW1 testified inter alia:– “First defendant was the one who was empowered to open a company’s account in December as it was he who was posted there. It was he who opened the account No. 00051 . . . This case is in con- g nection with a sum of N300,000 paid into our Ogun State Hotel Annex. It was paid into the annex by exhibit C. It was not paid into the personal account of first defendant. The proceeds of the cheque for N300,000 was collected by the Headquarters and our branch so advised. The proceeds were not collected by the first de- h fendant it was paid into the National Bank and collected by the National Bank. The proceeds were collected and paid into account No. 00051. Exhibit D–D2 were all approved by Mr Owoade. He had the power to approve such payments.” i As can be seen from exhibits D–D2, the beneficiaries of the proceeds of the N200,000 in exhibit C are not the first defendant, and the exhibits so confirm. It is also confirmed that every one of the transactions was in the appellant’s name. So to say that the appellant is not responsible for the tort or j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA National Bank of Nigeria Ltd v. Trans Atlantic Shipping Agency Ltd 247 a negligence of the first defendant (by failing to adhere to the procedures laid down for opening an account), and that his action was beyond the scope of his authority is inconceiv- b able. After all, under normal circumstances it was the duty of the first defendant to do all he did in respect of account no. 00051 at that material time. On this score I hold that the appellant is liable to the respondent for the loss occasioned by it. I also subscribe to the learned trail Judge’s opinion in c his judgment when he said inter alia:– “I am of the view that in this case the act per se was a lawful one and that the first defendant acted ostensibly within the scope of his employment and authority. No doubt he acted negligently, impru- d dently and nay fraudulently but this as said earlier is just a servant’s wrongful mode of carrying out an authorised act and would not absolve the master.” I must point out here that the case at hand is hinged heavily e on negligence of the first defendant, not the crime. In the light of the above discussions I am satisfied that grounds of appeal (3) and (4) to which the above issue is married fail. The final issue in the appellant’s brief of argument is f whether the loss occasioned to the respondent was caused or contributed to by the respondent. In determining this issue, one must consider the evidence of the respondent’s accounts manager, PW5, on his duties and whether the action he took g on discovering the non-payment of the said money into their U.B.A. account, which was their actual bank, was timeous. The relevant portion of his evidence reads:– “His specific instruction in respect of exhibit ‘A’ was to collect it h from Inlak Limited our sister company and deposit it into our account at the United Bank for Africa Lagos Central Branch. During a year ending at the time of this incidence he had carried on such assignment as this almost daily. During this period of about a year we had not had cause to doubt him on performance of his du- i ties. He was throughout this period working under my direct supervision and throughout this period I had not had any cause to doubt his integrity. He was to go and collect the cheque on 9th December, 1983. I first discovered an irregularity in our account around 10th January, 1984. We do monthly reconciliation of ac- j counts and use bank statements for this purpose. We got such S/M [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA 248 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

from the Bank around every 8th–12th of each month. As soon as I a got exhibit ‘B’ I took it and the ledger for reconciliation and it was that very day I discovered the discrepancy. Immediately I reported to my Financial Controller at about 4 p.m. on that day. He immediately telephoned the bank but did not get them. On the 2nd day b he sent one Benson Orubela an Accounts Manager and a senior employee of the bank to the bank . . . It was discovered there was a discrepancy.” Then under cross-examination he said:– c “He brought a teller to show that a cheque for the sum of N300,000 had been lodged into the company’s account. I saw that the paying teller was stamped. This was about the 9th December, 1983.” d Surely, the above pieces of evidence are enough to exoner- ate or absolve the respondent of any contributory negligence. The fact that Friday Essien showed him a teller that was stamped as evidence of payment to the bank, that the e statement of account from which payments can be confirmed usually sent around 8th–12th of every month, and that the company immediately reported the discrepancy PW5 discovered on the reconciliation of accounts, to their f bankers U.B.A. after going through its bank statement (exhibit B) on its receipt on 9th January, 1984 is evidence enough of its prompt action. Moreover, Friday Essien had been carrying out such assignments for over a year prior to this discovery with no incidence whatsoever, so the respon- g dent had no cause to doubt his integrity. If he had given PW5 any cause to suspect him in the past, then it probably could be said that he should have taken a more stringent pre- caution of cross-checking from U.B.A. if the said sum of h N300,000 had been paid, to make assurance doubly sure, earlier than 9th January, 1984 when the fraud was discovered. At least there is no evidence that such doubt or suspicion ever existed to warrant such an exercise. In the circum- i stances I fail to see how blame of the loss of the loan can be apportioned to the respondent. I refuse to subscribe to the appellant’s Counsel’s submission that the respondent was negligent in entrusting a large sum of money to Friday Es- sien or employing him and assigning such errands to him. It j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA National Bank of Nigeria Ltd v. Trans Atlantic Shipping Agency Ltd 249 a was as though it gave the sum to him in cash to pay to the bank; it was a cheque. All things considered I doubt if an all its imagination the respondent’s other servants could fathom b that Friday Essien would have gone to the extent he did to defraud his employer. Any reasonable man will agree that the procedure he took would have seemed farfetched and indiscernible to any one. The cases of Fitzgerald v. Lane and another (1988) 2 All E.R. 961, and Morris v. Martin c and Sons at 732 (supra) are indistinguishable from the cases at hand. The respondent referred to sections 8 and 9 of Cap 126, Torts Law of Ogun State on the issue of contributory negligence and how they ought to be made. Unfortunately I d have not been able to lay my hands on the said law. Be that as it may, I think what is of primary concern is whether there was contributory negligence here, and I have already signi- fied that there wasn’t. Learned Counsel also referred to Clerk and Lindsell (14ed) paragraphs 991–994 and 1007. I e will reproduce the portion of such paragraphs that I find pertinent below. Paragraph 991 states inter alia:– “Under the present Law, contributory negligence is not a defence to an action of negligence (save where it constitute the sole cause f of the damage). The Law Reforms (Contributory Negligence) Act, 1945, section 1(i) provides, ‘where any person suffers damages as a result partly of his own fault and partly of the fault of any other person, a claim in respect of that damage shall not be defeated by g reasons of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent that as the court thinks . . .’.” It is worth mentioning here that the appellant did not appeal h against damages. “994 The standard of care in contributory negligence is what is responsible in the circumstances and this in most cases correspond to the standard of care. Negligence does i not depend on a duty of care, it does depend on foreseeability . . .” “1007 The burden of proving contributory negligence in the plaintiff rests on the defendant. But this may be inferred from the plaintiff’s own evidence, or on a balance of j probabilities from the facts.” [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Mukhtar JCA 250 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The surrounding circumstances and the facts of this case as a contained in the printed record of proceedings before this Court are such that cannot convince any court of law that the respondent contributed to the negligence of the appellant b and its servant’s action. For the foregoing reasoning I would say the answer to the issue is in the negative, and so ground (7) of the appeal to which it is related fails. The end result is that the whole appeal fails in its entirety, and is thus dis- c missed. The judgement of the lower court is hereby affirmed, and the costs assessed at N1,000 in favour of the respondent against the appellant. OKUNOLA JCA: I have had the preview of the judgment of d my learned brother, Mukhtar JCA, in this appeal. I am in full agreement with his reasoning and conclusion in the said judgment which I hereby adopt. I also dismiss the appeal and abide by the orders made in the leading judgment in- e cluding the order as to costs. ADAMU JCA: I agree. Appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

Central Bank of Nigeria v. Ivory Merchant Bank Ltd 251 a Central Bank of Nigeria v. Ivory Merchant Bank Limited b FEDERAL HIGH COURT, LAGOS DIVISION BELGORE CJ Date of Judgment: 8 MAY 1996 Suit No.: FHC/L/CS/1338/95 c Banking – Central Bank of Nigeria – Application under section 36(a) Banks and Other Financial Institution Decree No. 25 of 1991 to purchase bank for nominal fee of N1 earlier granted by Court without opposition by Counsel appear- d ing for bank – Shareholders of Bank seeking to set aside earlier order on grounds that they were not heard before earlier order given – Shareholders further alleging that Counsel did not oppose the earlier order because he was appointed by Interim Management Board constituted by e Central Bank – Whether earlier order will be set aside – Relevant considerations Banking – Central Bank of Nigeria – Application under sec- f tion 36(a) Banks and Other Financial Institution Decree No. 25 of 1991 to purchase Bank for nominal fee of N1 – Need to give bank sought to be purchased opportunity to be represented before order is made, section 37(1) Banks and Other g Financial Institution Decree No. 25 of 1991 Judgments and Orders – Modification of – Review of – Setting aside of – Principles governing Natural Justice – Audi alteram partem – Principles applicable h Facts The Central Bank of Nigeria in an earlier application to the Federal High Court applied under section 36(a) of Banks i and Other Financial Institutions Decree No. 25 of 1991, for an order that the applicant or a person nominated by it may purchase and or acquire the respondent for a nominal fee of N1 (one naira) only for the purpose of restructuring and sub- j sequent sale of it. [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

252 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

At the hearing, a Counsel appeared for the respondent, a Ivory Merchant Bank Limited, who did not oppose the application. The Court therefore gave the order sought. In the present suit, the shareholders of the respondent brought an b application asking the court to set aside its earlier decision on the ground that they were not given a hearing before the order was made. They alleged that earlier on the Central Bank had appointed an Interim Management Board to man- c age the affairs of the bank and it was this body that appointed the Counsel who appeared for the bank and did not oppose the application. Hence, that Counsel could not be said to be representing the interests of the shareholders but d that of the Board which was under the Central Bank. They averred that an order obtained in such circumstances should be treated as a nullity and set aside. Counsel for the Central Bank however, asserted that the Judge could not set e aside this order being functus officio. Held – 1. The general principle of law is that a judgment or order of a court given after full evidence, oral or documentary f and full address of parties in person or through Counsel is final in the Court that gives it in the absence of any statutory provision providing otherwise. The Judge is functus officio after giving the judgment or the order but g there are few exceptions to this general principle. 2. The most important exception to the functus officio principle is where the judgment or the order given is a nullity and a nullity is in law a void act, an act which has no h legal consequence. 3. Where a decision affecting the liberty or property of an individual is concerned, the principle of audi alteram partem must be strictly observed. The audi alteram par- i tem must be by the parties involved or parties ought to be involved in the litigation or by their voluntary chosen representative. It cannot be by a body or person imposed by law. j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

Central Bank of Nigeria v. Ivory Merchant Bank Ltd 253 a 4. Any decision reached on the evidence of one party alone without giving the other party an opportunity to be heard is a nullity and such a decision can be set aside by the b Judge who made it. 5. The question is not whether injustice has been done because of lack of hearing. It is whether a party entitled to be heard before deciding, had in fact been given an op- c portunity of a hearing. Once an Appellate Court comes to the conclusion that the party was entitled to be heard before a decision was reached but was not given the opportunity of a hearing, the order or judgment thus entered is bound to be set aside. This is because such an d Order is against the rule of fair hearing, one of the twin pillars of natural justice which is expressed by the maxim audi alteram partem. e 6. Before the court sets aside its own judgment, it must consider the following conditions:– 1. The reasons for the applicant’s failure to appear at the hearing or trial of the case in which judgment was f given in his absence. 2. Whether there has been undue delay in making the application to set aside the judgment. 3. Whether the party in whose favour the judgment sub- g sists would be prejudiced or embarrassed upon an order for rehearing of the Suit being made. 4. Whether the applicant’s case is manifestly unsupportable. h 7. Per curiam “The position when the Originating Summons came to the court and the Order was made was that the plaintiff brought an action to buy the asset of Ivory Merchant Bank Limited when being under i the management of the plaintiffs agent appointee. The plaintiff made a proposal, its agent did not oppose it. The shareholders whose money were at stake were excluded and unaware of what was going on. The agent of the shareholders, that is the Board of Directors appointed by the shareholders were also excluded from j the proceedings. Such a procedure is more whimsical than legal. [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

254 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

And it was contrary to the impression given at the hearing that it a was the real, legal representative that was not opposing the purchase. It is certainly not a procedure authorised by law or known to judicial process and any decision arising from it can be nothing more than a nullity”. b Earlier order set aside.

Cases referred to in the judgment c Nigerian Agunbiade v. Okunoga and Co (1961) A.N.L.R. 110 Doherty v. Doherty (1964) N.M.L.R. 144 Kotoye v. C.B.N. (1989) 1 N.W.L.R. (Part 98) 419 d Okafor v. Attorney-General of Anambra State (1991) 6 N.W.L.R. (Part 200) 659 Ugwu v. Aba (1961) All N.L.R. 438 e Foreign Macfoy v. United Africa Co Ltd (1961) 3 All E.R. 1169 f Judgment BELGORE CJ: There was an Originating Summons under Order 5 Rule 3 of the White Book, Order 47 Rules 1 and 2 of Federal High Court (Civil Procedure) Rules and under g section 36(a) of Banks and Other Financial Institutions De- cree No. 25 of 1991. The Originating Summons was for an order that the applicant or a person nominated by it may purchase and or acquire the respondent for a nominal fee of h N1 (one naira) only for the purpose of restructuring and subsequent sale of the respondent. The Originating Summons was supported by an affidavit sworn to by an employee of the applicant/plaintiff holding the post of Deputy Director of i Banking Supervision. Some paragraphs of the affidavit read thus:– “4. That the respondent’s affairs has been in a poor state for quite a long time and this prompted the Central Bank of Ni- geria to take some supervisory measures. j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ Central Bank of Nigeria v. Ivory Merchant Bank Ltd 255 a 5. . . . 6. . . . 7. . . . b 8. . . . 9. . . . 10. . . . 11. . . . 12. That consequent upon the continued deterioration of the c financial condition of the respondent, the applicant with the approval of the President of the Federal Republic of Nigeria assumed control and management of the property and affairs of the respondent in August 1995, pursuant to the pro- d visions of section 34 of the Banks and Other Financial Insti- tutions Decree. 13. That the applicant in exercise of its powers under section 34(1) of the Banks and Other Financial Institutions Decree appointed the Nigeria Deposit Insurance Corporation to e manage the affairs of the respondent on its behalf. 14. That I verily believe that based on the enormity of the Fi- nancial problems of the respondent as shown by exhibit A and the inability of the shareholders to resolve the problems, it has become necessary for the applicant to exercise f its powers under section 36 of the Banks and Other Finan- cial Institution Decree and acquire the respondent at a nominal value. 15. . . . g 16. . . . 17. . . . 18. That this application is brought for an Order as herein requested in compliance with the requirement of section 36(a) of the Banks and Other Financial Institutions Decree.” h The Originating Summons was filed in Court on 16th No- vember, 1995. When the Summons came up in Court on 12th December, 1995 apart from Counsel for the applicant, a Counsel announced himself for the respondent, Ivory Mer- i chant Bank Limited. The Counsel for the respondent told the Court that he was not opposing the application and on the basis of that without any argument, the application was granted. The application was granted on 12th Decem- j ber, 1995 and it was first challenged by a Motion dated [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ 256 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

27th December, 1995 by a shareholder asking that the Order a made on 12th December, 1995 be set aside. It was also on 25th January, 1996 challenged by two other shareholders on the same ground and for the same relief b joining the first shareholder and finally it was also on 7th February, 1996 challenged by five other sets of shareholders upon the same ground. The two motions of 25th January, 1996 and 7th February, 1996 were argued together as both c claimed for an Order of the Court to suspend or set aside the Order made on 12th December, 1995. The first Motion was supported by an affidavit sworn to by one Mr O. Fajimolu, a shareholder claiming to have got d 510,417 shares of N1 each and deposing that his other two shareholders had 1,478,500 and 1,777,083 respectively and that he had the authority of the other two shareholders to swear to the affidavit. He went on to depose in paragraphs 4 e to 12 of the affidavit thus:– “4. That sometime in 1995, the Central Bank of Nigeria appointed an Interim Management Committee comprising its representative and that of Nigeria Deposit Insurance Corpo- f ration (“NDIC”) to run the affairs of Ivory Merchant Bank Limited. 5. That the said Interim Management Committee have since been in charge of the day-to-day management of Ivory Mer- g chant Bank Limited to the total exclusion of the shareholders and Board of Directors. 6. That recently the applicant’s attention was drawn to newspaper reports that pursuant to an application by Central Bank of Nigeria, this Honourable Court made an Order h mandating the Central Bank or any person nominated by it to purchase and/or acquire Ivory Merchant Bank Limited for a nominal fee of N1 only for the purpose of restructuring and sale of the Bank. i 7. That I also understand that one A. Doherty Esq. of Counsel Ivory Merchant Bank Limited had indicated that he was not opposing application of the Central Bank of Nigeria. 8. That the said A. Doherty was appointed by the Interim Management Board which is under the control of Central j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ Central Bank of Nigeria v. Ivory Merchant Bank Ltd 257 a Bank of Nigeria and could not in the circumstances have protected the interest of the shareholders. 9. That I and other substantial members of the Bank as Share- holders were not consulted before the said A. Doherty Esq. b of Counsel consented to the Order sought by the Central Bank of Nigeria. 10. That the said A. Doherty, Esq. did not represent the interest of the shareholders and the Board of Directors of the Bank. c 11. That the issue of disposing the Bank at N1 was neither ta- bled before the shareholders in General Meeting for a resolution nor was it brought to the notice of the applicants and other Shareholders for our consent. d 12. That I am ready with other applicants and members of the Bank to source funds and recapitalise Ivory Merchant Bank to the satisfaction of the Central Bank of Nigeria.” The affidavit supporting the second Motion was deposed to by another shareholder, Prof. U. U. Uche who also claimed e to have the authority of his other four shareholders to depose to the affidavit. Parts of his affidavit that are relevant to the present application are paragraphs 3, 4, 6, 8, 9, 10, 11 and 14 they are quoted hereinafter f “3. That on or about the 13th day of December, 1995 my attention was drawn to a Newspaper publication to the effect that Ivory Merchant Bank Limited has been acquired by the plaintiff/first respondent at a nominal fee of N1 (one naira g only). 4. That upon investigations, I discovered that the plaintiff/first respondent instituted a suit to acquire the defendant/second respondent, and that the said processes were served on the defendant/second respondents on the 7th day of December, h 1995. 5. . . . 6. That on 12th December, 1995 the case came up for hearing in Court and the defendant/second respondent did not con- i test the application consequently judgment/ruling was entered in favour of the plaintiff/first respondent. 7. . . . 8. That myself and the other applicants are shareholders in the Share Capital of the defendant/second defendant with over j more than N45 million stake. [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ 258 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

9. That the applicants were not informed and were not aware a of the pendency of the suit until the 13th day of December, 1995 when judgment had been entered in favour of the plaintiff/first respondent. b 10. That up till the date of filing this application, there has been no move by the interim management of the defendant/second respondent to inform the shareholders of the defendant/second respondent of the acquisition of the defendant/second respondent by the plaintiff/first respondent. c 11. That I have read the affidavit of one Johnson Idowu Oshi- nowo in support of the Originating Summons. 12. 13. d 14. That paragraphs 4, 5, 6, 7, 8, 9, 10, 11, 14 15, 16, 17, 18 and 19 of the said affidavit are not true as at the material time when the application was brought to Court.” Counsel for the applicants submitted that the Motion was e brought under section 37 of the Banks and Other Financial Institutions Decree No. 25 of 1991 and under Order 42 Rules 1 and 2 of the Federal High Court (Civil Procedure) Rules and that the application was supported by affidavits. f The facts deposed to in the two affidavits Counsel submitted were not contradicted by the plaintiff/respondent. He submitted that the applicants were sufficiently interested in the Order sought by the plaintiff and greatly affected by the Or- der the Court gave. He cited in support the case of Busari v. g Oseni (1992) 4 N.W.L.R. (Part 237) 557 at 587 as to their competence to bring the application. Counsel submitted further that section 37 of Decree No. 25 h of 1991 made it mandatory that the shareholders and directors should be made aware whenever an application under section 33 and section 36 of the Decree is to be made but that the applicants were not informed or made aware of the application by that method. Counsel submitted that the court i could set aside its own judgment or order made in the absence of the other party who ought to have been joined as a party. Counsel cited the case of Okafor v. Attorney-General of Anambra State (1991) 6 N.W.L.R. (Part 200) 659 at 678 j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ Central Bank of Nigeria v. Ivory Merchant Bank Ltd 259 a and Kotoye v. C.B.N. (1989) 1 N.W.L.R. (Part 98) 419 at 448. Counsel concluded by urging the Court to set aside the Or- b der made on 12th December, 1995 and that the applicants should be made a party to subsequent proceedings, to defend the action. In his reply, Counsel for the plaintiff/respondent stated that c no counter affidavit was filed because the application was being opposed on the ground of law. He submitted that every judgment of a court is presumed to be valid and can only be set aside by the Appellate Court. The judgment was d binding and the Judge became functus officio after delivering the judgment. The Judge lacked power to review the judgment unless there was an express provision of Law empowering him so to do. e Counsel submitted further that section 37 of Decree No. 25 of 1991, did not make it mandatory or condition precedent for shareholders to be heard before the plaintiff took the action it did take and that the Court had no power under the f said section 37 to review an Order already made. The power to do so was only vested in the President. In his reply, Counsel for the applicant stated that the applicants were not asking for the review of the Order but that it g should be set aside and that the court had power to do so. It must be observed that on 13th February, 1996 when the two motions of the various shareholders were consolidated, it was ordered that the plaintiff, that is the Central Bank of h Nigeria, and the defendant, that is Ivory Merchant Bank Limited should be served with the two Motions. Though served, Counsel who appeared for respondent when the Or- der upon Originating Summons was made, failed to turn up. i The general principle of law is that a judgment or Order of a court given after full evidence oral or documentary and full address of parties in person or through Counsel is final in the court that gives it in the absence of any statutory pro- j vision providing otherwise. The Judge is functus officio after [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ 260 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. giving the judgment or the Order. But there are few excep- a tions to this general principle. The most important exception is where the judgment or the order given is a nullity. “A nullity” as observed by Karibi-Whyte, JSC in Okafor’s case b (1991) 6 N.W.L.R. (Part 200) 659 “is in Law a void act, an act which has no legal consequence.” Or as put by Lord Denning at page 1172 of the case of Macfoy v. United Africa Co Ltd (1961) 3 All E.R. 1169:– c “If an act is void, then it is in law a nullity. It is not only bad, but incurably bad. There is no need for an Order of the Court to set it aside. It is automatically null and void without more ado though it is sometimes convenient to have the Court declare it to be so. And every proceeding which is founded on it is also bad and incurably d bad. You cannot put something on nothing and expect it to stay there. It will collapse.” The next question for consideration is the nature of the Or- der given in this case. From the affidavits of Mr Fajimolu e and that of Prof. Uche, it is evident that the shareholders of the defendant Ivory Merchant Bank Limited were not consulted or informed or any way aware of the proceedings in Court and that the directors appointed by Shareholders did f not consent to the proceedings nor were they represented at the proceedings. These facts were not contradicted. In fact, the facts seemed to be supported by paragraph 13 of the affidavit of the plaintiff supporting the Originating Summons leading to the Order now being challenged. g The paragraph stated that the plaintiff appointed the Nige- ria Deposit Insurance Corporation to manage the affairs of the Ivory Merchant Bank Limited after it assumed its control since August, 1995 which means that at the time the Origi- h nating Summons was brought, the Ivory Merchant Bank Limited was being managed and represented in Court by an agent of the plaintiff. The position when the Originating Summons came to the i court and the order was made was that the plaintiff brought an action to buy the asset of Ivory Merchant Bank Limited when being under the management of the plaintiff’s agent appointee. The plaintiff made a proposal, its agent did not j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ Central Bank of Nigeria v. Ivory Merchant Bank Ltd 261 a oppose it. The shareholder whose money were at stake were excluded and unaware of what was going on. The agent of the shareholders that is the Board of Directors appointed by b the shareholders were also excluded from the proceedings. Such a procedure is more whimsical than legal. And it was contrary to the impression given at the hearing that it was the real, legal representative that was not opposing the pur- c chase. It is certainly not a procedure authorised by law or known to judicial process and any decision arising from it can be nothing more than a nullity. An asset has to be purchased or acquired with the owner taking part willingly and fully in the bargaining proceeding on the purchase or acqui- d sition. Process of purchasing is transferring of asset from one person to another by voluntary agreement buttressed by valuable consideration, but how can this be done unilaterally? And to acquire is to gain the asset through effort, skill e or behaviour though title may not pass but even in this process also it will take two to agree on a mutual end. It cannot be over emphasised that where a decision affect- f ing the liberty or property of an individual is concerned, the principle of audi alteram partem must be strictly observed. The audi alteram partem must be by the parties involved or parties ought to be involved in the litigation or by their vol- g untary chosen representative. It cannot be by a body or person imposed by Law. As Nnaemeka-Agu, JSC put it at page 448 of Kotoye v. C.B.N. (1989) 1 N.W.L.R. (Part 98) 419:– “The question is not whether injustice had been done because of h lack of hearing. It is whether a party entitled to be heard before deciding had in fact been given the opportunity of a hearing. Once an appellate Court comes to the conclusion that the party was entitled to be heard before a decision was reached but was not given the opportunity of a hearing, the order or judgment thus entered is i bound to be set aside. This is because such an order is against the rule of fair hearing, one of the twin pillars of natural justice which is expressed by the maxim audi alteram partem.” There are many judicial authorities that any decision reached j on the evidence of one party alone without giving the other [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ 262 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. party an opportunity to be heard is a nullity and that such a a decision can be set aside by the Judge who made it. There is a 1961 decision of the Chief Justice of Lagos State D. Lestang in the case of G. Agunbiade v. Okunoga b and Co. (1961) 1 A.N.L.R. 110 where a consent judgment was given when there was no consent of one of the parties. The learned Chief Justice said:– “In my view the Court has an inherent power to set aside its judg- c ment given in error. In the present case, the judgment purports to be given by consent whereas there was in fact no consent. It was really given without any right whatsoever and in contravention of the rules and is accordingly a nullity. The court was entitled ex debito justitiae to set it aside.” d Before the Court sets aside its own judgment, it must however, consider conditions Idigbe, JSC stated in Idavi Ugwu and others v. Nwaoji Aba and others (1961) All N.L.R. 438 and Doherty v. Doherty (1964) N.M.L.R. 114 thus:– e “1. the reasons for the applicant’s failure to appear at the hearing or trial of the case in which judgment was given in his absence; 2. whether there has been undue delay in making the applica- f tion, to set aside the judgment; 3. whether the party in whose favour the judgment subsists would be prejudiced or embarrassed upon an order for rehearing of the suit being made; and 4. whether the applicant’s case is manifestly unsupportable.” g I have given consideration to all the four points and I found them all in favour of the applicant. The argument of learned Counsel for the plaintiff that the h Court was functus officio could well be met by the judgment of the Supreme Court in the case of Okafor v. Attorney- General Anambra State cited by learned Counsel for the applicant where at 679 Karibi-Whyte, JSC said:– i “appellant’s argument is that the Court of Appeal after the delivery of the judgment impugned was functus officio and cannot sit as a Court of Appeal over that judgment.” The crux of the matter is whether in Law as distinct from fact, the court had given a judgment in the matter. The question lies in the j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ Central Bank of Nigeria v. Ivory Merchant Bank Ltd 263 a answer whether the procedure followed was regular or irregular. Our Courts have adopted the principle formulated by Lord Atkin in Evans v. Barlam (1937) A.C. 473, 480 where the Lord Justice said:– b “The principle obviously is that unless and until the court has pronounced a judgment upon its merits or by consent, it is to have the power to revoke the expression of its coercive power where that has only been obtained by a failure to fol- c low any of the rules of procedure. It is well settled that where the Court is competent as to its composition and qualification of its members, it has power to determine its jurisdiction. That is, it has the jurisdiction d to pronounce on the validity vel non of its own act. The answer to the contention of learned Counsel to the appellant is that the Court of Appeal was not reopening its decision. The court was only being called upon, to determine e whether on the facts before it gave a decision.” I am therefore, not reviewing my earlier decision but upon facts now known to me which were not known when the decision was made, I have no doubt that a decision was made f against the canon of justice because it was made on a recourse of one party to the action to the exclusion of the other party that ought to be in the action. The decision is therefore a nullity and I have no hesitation in setting it aside. The de- g cision was made against natural justice, against the provision of the Constitution for fair hearing and against the provision of section 37 of Decree No. 25 of 1991, under which the Originating Summons was brought. h If section 37(1) which states “No Order under sections 33 and 36 of this Decree shall be made unless the bank in respect of which the Order is to be made, and in the case of an Order under paragraph (c) or (d) of subsection 2 of section i 33 of this Decree, the Director, Manager or Officer who is to be removed from office has been given a reasonable opportunity of making representation against or otherwise in respect of the proposed Order” is not to apply to section 36(a) j of the Decree under which the plaintiff desired to purchase [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ 264 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. or acquire the assets of the Ivory Merchant Bank, the defen- a dant, as Counsel for the plaintiff asked me to hold, I will say to interpret the section to mean that a party whose asset is to be purchased or acquired should not be given a say in the b process, is to write an obituary of all rules of law and judicial process. I do not believe one can be on a solid ground to say he is carrying out the provision of the Law by disregard- ing justice. Law is only Law for a free society when it is just c and its end result is justice. One can understand and perhaps have sympathy with efforts being made to explore every possible way of improving and streamlining the Country’s economy but that understanding must be through the law to d serve the end of justice. In view of the conclusion, I have reached about the conditions precedent to the Order of 12th December, 1995, I do set aside that Order. I direct that Originating Summons be e heard de novo with all parties interested be made parties and given opportunity to state his or their case. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Federal Republic of Nigeria v. Dr Onwochei Odogwu 265 a Federal Republic of Nigeria v. Dr Onwochei Odogwu b FAILED BANKS TRIBUNAL, BENIN ZONE MOMOH J

Date of Judgment: 28 MAY 1996 Suit No.: FBT/BZ/3C/96 c Failed – Failed Banks Tribunal – Sentence – Application to back date commencement date of sentence – Application made after sentence passed – Propriety of – No full or substantial recovery of amount involved in offence at the time d sentence imposed – Full recovery made thereafter – Whether revisiting of sentence possible – Section 20(5) Failed Banks Decree No. 18 of 1994 (as amended) – Powers of the Tribunal under section 20(5) Failed Banks Decree e No. 18 of 1994 (as amended) – When can be invoked – Rele- vance of detention period – Failure of Tribunal to consider detention period before pronouncing – Remedy open to applicant – Powers of under section 20(5) Failed Banks De- f cree No. 18 of 1994 (as amended) – When can be invoked

Facts The prisoner/applicant was convicted of various offences by g the Benin Zone of the Failed Banks Tribunal and sentenced to a concurrent term of 3 years imprisonment in addition to cumulative fines of N35,000 and forfeiture of his Company property at 2 Cooper Road, Ikoyi, Lagos which was made h pursuant to section 20(3) of the Decree on 26th February, 1997. (See: Federal Republic of Nigeria v. Dr Onwochei Odogwu (No. 1) (1997) 1 F.B.T.L.R. 179). There was no appeal against the decision. By an applica- i tion brought pursuant to sections 3(2) and 20(5) of the Failed Banks (Recovery of Debts) and Financial Malprac- tices) in Banks Decree No. 18 of 1994 as amended, the applicant applied to the Tribunal to make its sentence inclusive j of the period from 15th July, 1995 when he was arrested and [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

266 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. detained to the 26th February, 1996 when the sentence was a pronounced by the Tribunal. It was submitted on behalf of the applicant that at the time sentence was imposed, there was no full or substantial re- b covery of the amount involved in the offence to enable the Tribunal exercise its discretion to reduce or decline to impose sentence pursuant to section 20(5) of the Decree, but that after sentence, full recovery of the amounts involved in c the offences and all sums due in respect of the civil claims against the applicant was made on 26th April, 1996 when the proceeds of sale of the applicant’s property at 2 Cooper Road, Ikoyi amounting to N280.2 million was received by the Nigeria Deposit Insurance Corporation and that conse- d quently the Tribunal should exercise its discretion by virtue of section 20(5) of the Decree to make the sentences inclusive of the continuous period which the applicant was in police or prison custody before sentence. The respondent op- e posed the application contending in the main that the Tribu- nal was functus officio and had no power to alter a sentence after it had been passed and that the applicant’s remedy was to appeal against the sentence. f Section 20(3), (5) of the Failed Banks Decree No. 18 of 1994 (as amended) reads:– “20(3) A person convicted of an offence under this Decree may voluntarily surrender property, moveable or immovable, g of the value equal to the amount involved in the offence or such value as he may decide.” “20(5) 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 of- h fence, the Tribunal may, if it deems it equitable, reduce or decline to impose the penalty specified, in subsection (1) of this section of in any other enactment.” Held – i 1. The inherent power of a Court to vary its own orders relate only to where it is necessary to carry out its own meaning and to make its meaning plain. In such a case the Court cannot be said to be functus officio neither can j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Federal Republic of Nigeria v. Dr Onwochei Odogwu 267 a it be said that it had exhausted all the jurisdiction it had in the matter. In the instant case, the Tribunal cannot be said to be functus officio in respect of the sentence im- b posed on the applicant in that it had not exhausted its powers under section 20(5) of the Decree and has not considered the detention period raised in the allocutus before the sentence was pronounced since there was no substantial/full recovery of the amount involved in the c offence at the time sentence was imposed. 2. By virtue of section 381 of the Criminal Procedure Act Cap 80 Laws of the Federation of Nigeria, 1990, the sentence of imprisonment takes effect from the day it is d pronounced, consequently a sentence cannot be ante dated so as to run from an earlier date than the date of pronouncement. 3. It would be contrary to law if sentence were ordered to e take effect before the pronouncement date of the sentence. The implication of such an order would be “sentence before conviction” instead of the other way round. On the other hand, it is perfectly in order for the Court or f Tribunal to order that the sentence of imprisonment shall be inclusive of the period the convict spent in detention awaiting trial. If the remand period is ascertained and raised in the course of allocutus, it is expected to be g taken into account by all courts of criminal jurisdiction in determining the length of sentence to impose. If the period is taken into account it goes to reduce or mitigate the sentence pronounced. h Application granted. Cases referred to in the judgment Nigerian i Adesina v. Inspector-General of Police 1956 1 F S.C. 55 Commissioner of Lands, Mid-Western State v. Chief Francis Edo Osagie Vol. 8 (1973) N.S.C.C 432 Koiki v. First Bank Nigeria Plc (1994) 8 N.W.L.R. (Part j 365) 665 [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

268 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Oyediran v. The Republic (1966) 4 N.S.C.C. 252 a Oyediran v. The Republic (1967) N.M.L.R. 122 at 125 R v. Lawrence (1933) 11 N.L.R. page 6 b Foreign R v. Crockett (1992) 21 Cr. App. R. 164

Nigerian statute referred to in the judgment c Failed Banks (Recovery of Debts) and Financial Malprac- tices in Banks Decree No. 18 of 1994 (as amended), sections 3(2), 20(2), (3) and (5) d Books referred to in the judgment Archbold (43ed) Paragraph 5 Criminal Law and Procedure by Aguda (10ed) page 224, e Paragraph 584

Counsel For the respondent: Mr Ajomo f For the applicant: Chief G.N. Uwechue, SAN

Judgment MOMOH J: By this motion the applicant Dr Onwochei g Odogwu, a convict serving a 3 year concurrent term of com- prisonment, is asking for the following orders:– 1. “Extending the order as to sentence so as to make it inclusive of the period from the 15th day of July, 1995, when the h applicant was arrested and detained to the 26th day of Feb- ruary, 1996 when the sentence was pronounced by this Honourable Tribunal. 2. Such further order or orders as the Tribunal may deem fit.” i The 4 grounds of the application as contained in the motion papers are:– 1. “At the time of the sentence, although property has been offered for sale in mitigation, no sale had been made and there was, as at then, no ‘full or substantial recovery of the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu 269 a amount involved in the offence’ to enable the Tribunal exercise its discretion to reduce or decline to impose the sentence in the case. b 2. Pursuant to the order of the Tribunal contained at pages 107–108 of the judgment to sell the property surrendered (i.e. number 2 Cooper Road, Ikoyi, Lagos) and to apply the proceeds towards satisfaction of the sum of N76,008,877.18 being the ‘amount involved in the offences’ and the balance c to be held to the credit of the applicant and applied towards any Civil Claims against the applicant, the said property was sold and the proceeds of sale received on 26th April, 1996. 3. Judgment in respect of the anticipated civil claim in Suit d No. FBT/BZ/4/96 (NDIC v. Kapital Securities Ltd and 6 others) was delivered on the 6th day of December, 1996 and at page 53 this Honourable Tribunal held that ‘from the said date – 26th April, 1996 the fourth respondent and his e Companies are deemed to have settled their indebtedness and therefore no interest shall be awarded beyond that date.’ 4. It is equitable now that there is ‘full recovery of the amounts involved in the offences’ and all sums due in respect of the Civil Claims, for this Honourable Tribunal to f exercise its powers by virtue of section 20(5) of Decree No. 18 of 1994 to make the sentences inclusive of the continuous period over which the applicant was in Police or prison custody before sentence.” g The above grounds and the affidavit of 16 paragraphs deposed to by Mrs Monica Morah – elder sister of the applicant – were relied upon by Chief G.N. Uwechue S.A.N. Counsel for the applicant in arguing this. It is brought pursu- h ant to sections 3(2) and 20(5) of the Failed Banks (Recovery of Debts) And Financial Malpractices In Banks Decree No. 18 of 1994. (herein referred to as the Decree). Section 3(2):– The Tribunal shall exercise exclusive jurisdiction i over all ancillary matters including remand, bail and any other preliminary issues connected with an offence or hearing over which the Tribunal has jurisdiction. Section 20(5):– Where by reason of the confiscation or voluntary j surrender of property under this section, there [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 270 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

is full or substantial recovery of the amount a 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). b Mr Uwechue S.A.N for the applicant submits as follows:– The power conferred on the Tribunal by section 20(5) of the Decree as amended enables the Tribunal to reduce or c forego the sentence whenever the amount involved in the offences charged is paid by the convict. In this case, when sentence was pronounced on 26th June, 1996, there was no payment of the N76,008,877.18 involved in the offences d charged until 26th April, 1996 when the proceeds of sale of the forfeited property was received by Nigeria Deposit In- surance Corporation (N.D.I.C.). The total amount involved in the civil claims was also received in a separate civil action. It is equitable for the Tribunal to review its sentence to e take into account the period the accused was in custody before the judgment. The application is mainly based on the fact that the sums involved in both the criminal charge and civil claims have been paid. The period urged to be taken f into account is 15th July, 1995 to 26th February, 1996 (being seven months and eleven days). The Tribunal is not functus officio. See Koiki v. First Bank Nigeria Plc (1994) 8 N.W.L.R. (Part 365) at page 665 where jurisdiction was held g not to have exhausted even after judgment. The learned Senior Advocate concluded by submitting that the order for the review of the sentence is an ancillary matter which the Tribunal has exclusive jurisdiction to entertain by h virtue of section 3(2) of the Decree. Mr Ajomo for the respondents replies:– Counsel: The application is opposed on the ground that the i Tribunal is functus officio in respect of the sentence passed. The passing of sentence is as much a part of the trial as the leading of evidence – (see (1) R v. Lawrence (1933) 11 NLR page 6 at 8(2) Adesina v. Inspector General of Police (1956) 1 F.S.C. page 55 at 56). j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu 271 a He said the Court or Tribunal has no power to alter a sentence after it has been passed. Refer to (1) Criminal Law And Procedure by Aguda (10ed) page 224 paragraph 584 b and the case: Oyediran v. The Republic (1967) N.M.L.R. page 122 at 125. Counsel: The above authorities are the traditional positions. The Decree does not alter the position. Section 20(2) c and (5) of the Failed Banks Decree as amended does not anticipate post payment of amount involved in the offence. The subsections do not specifically allow the re-opening of the issue of sentence. The present relief ought to have been made after verdict during the plea in mitigation of sentence. d Although there is nothing on record to show that the period spent in detention was taken into account in sentencing the applicant, the matter nevertheless can not now be re-opened or treated as if it is an ancillary matter. The applicant’s rem- e edy is to appeal against the sentence – concluded Learned Counsel. TRIBUNAL:– f Background to the Application. From the affidavits in support of the motion, the judgments of this Tribunal in respect of the Criminal and Civil proceedings against the applicant, the following facts relevant to this g motion emerge:– The applicant was tried on a 13 count charge and the trial terminated in his conviction, sentence, forfeiture and sale of the property surrendered in mitigation of sentence. There h was no appeal against the judgment. Before the trial, the applicant was arrested and detained by the Police of then Fed- eral Investigation and Intelligence Bureau (“FIIB”) on 14th July, 1995 in Lagos and arraigned before this Tribunal on the 29th November, 1995. He was further remanded in i prison custody on the Order of the Tribunal with effect from that date. Between the 14th July, 1995 and 6th February, 1996 the accused was in custody awaiting trial. Judgment was delivered on 7th February, 1996 and sentence pro- j nounced on 26th February, 1996. The applicant was [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 272 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. sentenced to a concurrent term of 3 years in prison in addi- a tion to cumulated fines of N35,000 and forfeiture of his company’s property at 2 Cooper Road, Ikoyi, Lagos. The surrender of the property was made sequel to section 20(3) b of the Failed Banks etc Decree which stipulates:– “A person convicted of an offence under this Decree may voluntarily surrender property, moveable or immovable, of the value equal to the amount involved in the offence or such value as he may decide.” c The value of the property at 2 Cooper Road, Ikoyi, Lagos was very high. It was provisionally valued for over N185 million but eventually sold for N285.200 million. The Tribunal in relation to the property made on 26/2/96 the following:– d “Part of the proceeds of sale viz: N76,008,877.18 involved in the offences for which the first accused was convicted shall be applied by the said NDIC in line with their statutory duties and powers as Liquidator of the failed Kapital Merchant Bank Ltd. The balance e shall be held to the credit of the accused and applied towards the settlement of other monetary claims payable by the accused and/or his private companies to the Kapital Merchant Bank Ltd.” The sentence that was imposed on the convict ranged from f terms of imprisonment without option of fine to orders of fines and the final order was:– “The fines are to be paid cumulatively and the terms of imprisonment to run concurrently. That is to say a total fine of N35,000 (Thirty-five Thousand Naira) and imprisonment for 3 years.” g The property confiscated and ordered to be sold was eventually sold by NDIC and the proceeds of sale amounting to N280.2 million realised was received by the corporation on 26th April, 1996. h Subsequently, a civil action FBT/BZ/4/96 was instituted by the Corporation before this Tribunal to recover (from the proceeds) the total sums outstanding against the accused and i his companies. Judgment was delivered on 5th December, 1996 in favour of NDIC as Liquidator of K.M.B. Ltd in the sum of N133,785,461 and US$36,555.27 and interest thereon against the respondent and his companies. In the judgment it was stated that:– j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu 273 a “The property is shown to have been sold on April 26th, 1996 and the proceeds paid over to the applicant – NDIC. From the said date – 26th April, 1996 the fourth respondent and his companies are deemed to have settled their indebtedness and therefore no interest b shall be allowed beyond that date.” (Italics relied upon in this motion.) The position as at that date 26th April, 1996 was that settlement of the amount included in both the criminal and civil c proceedings had been paid up as at 26th April, 1996 on the receipt of proceeds of sales of the property. The balance due to the parties was determined on 16th April 1997 upon the hearing of the originating summons in their behalf in d FBT/BZ/4/96 filed by NDIC on 4th February, 1997. Finally comes this motion seeking for an order including the detention period in the sentence of 3 years pronounced on 26th February, 1996. The convict – applicant first sought e the relief by 2 earlier motions filed 24th April, 1996 and 28th May, 1996 respectively. They were withdrawn after the present motion was filed on 24th January, 1997. On the submission made by Mr Ajomo on behalf of the re- f spondent that I am functus officio on the matter of sentence, I shall refer briefly to the general principle of law in that regard. In the case of Oyediran and others v. The Republic (1966) 4 N.S.C.C. 252 at 255 per Coker, JSC:– g “A Judge sitting at an Assizes may at any time during the same Assizes or session before judgment has been entered on the record vacate his judgment and substitute another. Court of Appeal may reverse or amend the judgment.” h In the case of Commissioner of Land, Mid-Western State v. Chief Francis Edo Osagie Volume 8 (1973) N.S.C.C. 432 following the submissions by Chief F.R.A. Williams (now S.A.N) submitted that the trial Judge having given final judgment in the suit before him had become functus officio i and was not therefore competent to entertain the application, Fatai-Williams, JSC held. See page 437:– “Except for the making of ancillary orders such as orders for stay of execution of the judgment debt by instalments for which there j are statutory provisions, once a Judge has delivered a final [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 274 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

judgment in a matter pending before him, he ceased to be seised of a that matter and he cannot re-open it.” In Koiki v. First Bank of Nigeria Plc (1994) 8 N.W.L.R. (Part 365) 665, the issue for determination was stated at b page 666 to be:– “Whether the learned trial Judge, after ordering payment of interest on the judgment debt by the respondent but without specifying the rate thereof, could later upon application by applicants, hear the matter in order to determine the rate of interest.” c The Court of Appeal held that the High Court has not exhausted its jurisdiction and was not functus officio. “. . . a court cannot be said to be functus officio in respect of a matter calling for its decision one way or another so that it could be d said to have exhausted all the jurisdiction it had in the matter.” Held at page 681:– “The learned trial Judge was wrong in holding that because the respondents have paid what they considered to be the interest, he e was functus officio. I therefore find that the learned trial Judge has both the duty and the jurisdiction to determine the appropriate rate of interest chargeable on the judgment debt to give full meaning to the order he has made on 9th July, 1990.” f Some cases of the Supreme Court were referred to at page 678 of the report. Relevant excerpts are:– “That a Judge or court had jurisdiction to amend his or its judgment or order whether enrolled or not and whether the error arose from a clerical slip or not provided that the judgment or order con- g cerned does not express the meaning of the judgment or order which was not intended by the Judge or court.” “Under the principle of ‘Slip Rule’ the court has power to amend its own judgment so as to correct and bring the judgment to carry h out the meaning which the court intended.” “The inherent power of a court to vary its own orders relate only to where it is necessary to carry out its own meaning and to make its meaning plain. The error or omission must be an error in express- ing the manifest intention of the court. The correction can only be i made on motion.” In England, statutory provisions now regulate the court’s power to amend sentence. The crown court has statutory power to vary any sentence or order which it has made j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu 275 a during the relevant time limit. The same goes for the magis- trates’ courts. See Archbold (43ed) paragraphs 5–70 to 5–78. In Nigeria, the power to amend or alter a sentence is not b statutory but derived from the decisions of superior courts. The principles of law enunciated in the authorities cited clar- ify beyond argument that the Court or Tribunal may alter, amend, vary or even vacate and substitute its judgment under the circumstances mentioned. I am guided by the princi- c ples. In the case of the sentence imposed on the convict the Tribunal is not functus officio in that it had not exhausted its powers under section 20(5) and had not considered the detention period raised in the Allocutus before the sentences d were pronounced for reasons disclosed in this motion. THE RELIEF SOUGHT:– It is observed from this motion that the applicant is seeking e an order “extending” the sentence imposed on the accused on 26th February, 1996 to include the pre-sentence period “from 15th July, 1995 to 26th February, 1996” when the applicant was in detention awaiting trial. The prayer implies that the commencement date of the prison term of 3 years f should be from the 15th July, 1995 when the applicant was arrested and kept in custody awaiting trial. The Learned Senior Advocate in a bid to persuade me to g grant the application for an order back-dating the commencement date of the sentence exhibited and relied on the Order of Sentence pronounced on 26th November, 1996 by my learned brother of the Failed Banks Tribunal Zone V, Lagos in the Criminal Suit No. FBFMT/L/ZV/029/96. It was h referred to as exhibit MM3 to paragraph 12 of the affidavit to this motion which states:– “That the Lagos Zone of this Honourable Tribunal in exercising its power under section 20(5) of the Decree had in its Ruling in i Charge No. FBFMT/L/029/96 dated 29th November, 1996 deemed the period of detention before sentence as part of the sentence already served.” It was recorded in the Order of Sentence, exhibit MM3, that j some of the convicts had been in detention without trial [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 276 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. since 8th January, 1996. The detention period was specifi- a cally considered and taken into account by my Learned Brother of the Tribunal in reducing the sentences passed on 29th November, 1996. The sentence on each of the affected b convicts was ordered to take effect from the 8th January, 1996 the commencement date of the detention. For example, in sentencing the 6th convict, my Learned brother expressly considered the detention date by ordering as follows (itali- cised by me):– c “The 6th accused is hereby sentenced to 9 months imprisonment without an option of fine. The sentence is to take effect from the 8th January, (1996) he is therefore deemed to have served his sentence and is accordingly set free.” d I am urged by the Learned S.A.N. to adopt the same approach to taking the custodial period into account. With due respect to my Learned brother of the Tribunal, I find myself unable to be persuaded by that part of the order giving retro- e active effect to the commencement date of the sentence in order to accommodate the period of detention. This is because the law does not allow sentence of imprisonment to take effect before the date it is pronounced. By section 381 f of the Criminal Procedure Act Cap 80 Laws of the Federa- tion of Nigeria (LFN), 1990 sentence of imprisonment takes effect from the day it is pronounced. See also R v. Crockett (1992) 21 Cr. App. R. 164 in which the point was emphasised thus:– g “A sentence cannot be ante dated so as to run from an earlier date than the date of pronouncement of the sentence.” It would be contrary to law if sentence were ordered to take h effect before the pronouncement date of the sentence. The implication of such an order would be “sentence before conviction” instead of the other way round. On the other hand it is perfectly in order for the Court or Tribunal to order that the sentence of imprisonment shall be inclusive of the period i the convict spent in detention awaiting trial. That was in essence what my Learned brother did and that is the present relief sought by this motion. If the remand period is ascertained and raised in the course of allocutus, it is expected to j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu 277 a be taken into account by all courts of criminal jurisdiction in determining the length of sentence to impose. If the period is taken into account it goes to reduce or mitigate the sentence b pronounced. The Court in deserving cases would normally order or direct expressly that the term of imprisonment shall be inclusive of the ascertained period spent in custody. In that case, c the period may be deducted by the Tribunal from the sentence imposed (as rightly done by my Learned brother of Zone V, Lagos). Alternatively, the specified detention period intended to be deducted may be recorded and reflected in the commitment warrant by endorsing that the sentence d shall be inclusive of the specified detention period. In that case, the prison authorities would determine the balance of the term to be served (if any) after deducting the endorsed period. Where however, there is no indication on the record e and commitment warrant as to whether or not the period spent in custody was taken into account in sentencing the convict, the sentence pronounced is deemed not to have taken the period spent in custody into account. That is the f stance of the applicant in this motion. Essentially the applicant says that the sentence of 3 years imposed on 26th February, 1996 by this Tribunal did not take into account the detention period. Consequently the ap- g plicant seeks the inclusion of the detention period of 7 months 11 days (15th July, 1995 to 26th February, 1996) in the 3 years term of imprisonment. I am to invoke in favour of the convict section 20(5) of Decree No. 18 of 1994 which h provides:– “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 i subsection (1) of this section or in any other enactment.” It is conceded by the respondent’s Counsel that the convict is entitled to avail himself of that provision but added that the appropriate time to do so was during the plea in mitiga- j tion before sentence and not after. No specific order or [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 278 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. directive was made on the issue of detention period in the a order of sentence. It was the recovery of the huge sums involved in the offences charged that dominated the minds of the Counsel and the Tribunal at the time. Added to that fact b was that the recovery of the amount involved in the crime had not been effected then. This was rightly reflected by the S.A.N. as the first ground in the motion prayer when he stated:– c “At the time of the sentence, although property had been offered for sale in mitigation, no sale had been made. There was, as at then, ‘no full or substantial recovery of the amount involved in the offence’ to enable the Tribunal exercise its discretion to reduce or decline to impose the sentence in the case.” d I feel that in handling very serious cases such as those brought before the Tribunal under the Failed Banks Decree involving prolonged pre trial incarceration of suspect, that the detention period ought to receive the special attention of e the Tribunal. Specific orders or directions to the effect that the detention period be included in full or in part in the sentence is unavoidable and imperative. The convict is entitled to know that his plea in mitigation has been taken into ac- f count with particular reference to the pre-trial detention. Consequently where it is not apparent from records that the period had been considered, the party adversely affected, may apply to court by motion for clarification and necessary g inclusion as done by this motion. In sentencing the applicant, it was never intended by the Tribunal that the convict should be denied availing himself fully of his right to mitigate sentence under section 20(5) of h the Failed Banks Decree. Having satisfied the conditions stipulated therein, it was his right to be heard on reduction of the sentence. As rightly canvassed on behalf of the convict, as at 26th February, 1996 when the confiscation orders in i relation to the property were made, the provisions of section 20(5) of the Decree could not be invoked. The reason being that the proceeds of sale in satisfaction of the amount involved in the offences had not then been realised. There was no recovery of the amount as at 26th February, 1996 when j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu 279 a sentence was pronounced. The actual recovery was effected when the property was sold and the proceeds received by NDIC by which time the accused had commenced his jail b term. In the peculiar circumstances of this case the Tribunal, in my view, could exercise, its power under section 20(5) by mitigating the sentence EITHER as at the date of judgment (on the assumption that the confiscation of property is tantamount to actual recovery of the amount involved) OR at a c later date upon the actual recovery of the amount involved. The view is based on the fact that section 20(5) of the De- cree left it open to speculation as to when the power is to be invoked. It is a situation analogous to that of imprisonment d in default of payment of fine. Where full or part payment of a fine or amount ordered to be recovered by distress is actually made, the law allows the convict to be released or sentence reduced pro rata as the case may be. See section 397 of e the Criminal Procedure Code. The convict is entitled in law and equity to avail himself of the benefit of section 20(5) of the Decree on the grounds stated in the motion. The grounds are also contained in para- f graphs 8 to 11 of the undisputed depositions in the affidavit supporting this motion. The paragraphs go thus:– “(8) That at the time the order as to sentence of the applicant was made no payment had been made as the property had not been sold. g (9) That in the course of his Allocutus on the 26th day of Feb- ruary, 1996, as recorded at page 102 of the said judgment of this Tribunal the Learned Counsel drew the attention of the tribunal to the fact that the applicant had been in detention h since July, 1995. (10) That the property was sold and the proceeds of sale received on 26th April, 1996 as recorded at page 53 of the judgment of this Honourable Tribunal delivered in Suit No. FBT/BZ/4/96. i (11) That payment has been made in full satisfaction of both the amount involved in the offences and also in the civil claims against the applicant and his associated companies.” It is a practice which has received universal recognition in j all courts of criminal jurisdiction in Nigeria to consider in [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 280 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. favour of a convict the period spent in detention awaiting a trial. In this particular case, the Decree empowers the Tribunal to reduce the sentence or even forego the imposition of sen- b tence in the event of full or substantial recovery of the amount involved in the offences charged. The convict having fully paid up is not even asking for a review or variation of the 3 year sentence. No actual reduction from the 3 year c term to a lesser term is envisaged but that the pre trial detention period should form part of the 3 years. If this application is denied, the implication is that the convict would have been incarcerated for 3 years in addition to the pre-trial de- d tention period. That would be most inequitable and contrary to the lenient posture of section 20(5) of the Decree. The justice of the case demands that the detention period awaiting trial should be considered fully in favour of the accused e in mitigating the sentence under section 20(5) of the Failed Banks Decree No. 18 of 1994. In the light of the foregoing, I shall express the meaning of the 3 year term of imprisonment as inclusive of the period f the convict was in detention before sentence. The necessary order follows. ORDER:– “The sentence of 3 years imposed is inclusive of the pre trial de- g tention period of 15th July, 1995 to 26th February, 1996. The commitment warrant to be endothersed accordingly.” [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Ltd 281 a Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Limited and Another b SUPREME COURT OF NIGERIA UWAIS CJN, ADIO, MOHAMMED, OGUNDARE, ONU JJSC Date of Judgment: 28 MAY 1996 Suit No.: S.C.95/1990

Banking – Negligence – Liability of banker to non-customer – c Principles governing Facts The appellant herein was the second defendant in an action d brought by the first respondent, as a plaintiff, claiming jointly and severally against the appellant and second respondent (as first respondent) as follows:– “(i) Declaration that the period regarding, deeming and or pre- e suming a cheque presented for clearance through the Cen- tral Bank of Nigeria as cleared is four (4) working days. (ii) Declaration that the sum of N885,000 held by the first defendant at Ibadan and deemed credited to the account of the second defendant on 28th October, 1983 being proceeds on f a cheque No. 066058 allegedly issued to the second defendant and paid into his account with the first defendant is the property of the plaintiff. (iii) An order compelling the first defendant to credit the ac- g count of the plaintiff through the Central Bank Clearing House, Ibadan with the said amount or any part thereof as money had and received – alternatively – an order against the defendants jointly and severally to refund the said amount or any part thereof directly to the plaintiff as money h had and received. (iv) An order that the defendants refund the said sum of N885,000 (sic) to the plaintiff as money had and received.” The facts of the case may be stated thus. On or about the i 26th October, 1983, a cheque leaf No. 066058 for the sum of N885,000 deposited with the second respondent was received at the branch of the first respondent at Agodi, Ibadan. The cheque which was drawn on the first respondent was j purportedly issued by Messrs Robatek Nigeria Limited – an [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

282 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. industrial company with headquarters at Lagos in favour of a the appellant. On 27th October, 1983, the first respondent in an attempt to balance its account for the previous day, discovered that the cheque was missing. This was at the close b of day. Consequently, the account of the day could not be balanced. On the following day, that is 28th October, 1983, a thorough search was made at the branch and it was found that the amount of N855,000 which could not be accounted c for, was represented by the missing cheque issued by Messrs Robatek Nigeria Limited. When by 11am of that day it became clear that the cheque could not be traced, the Manager of the branch contacted the Main branch in Ibadan of the d first respondent which is situated at Bank Road Ibadan, in order to find out who it was that presented the cheque to the latter branch. The Manager was informed that the cheque was lodged by the second respondent, and he immediately got in touch with the Manager of the second respondent in e Ibadan. The former requested the latter not to honour the cheque on the ground that it had been lost. But to his surprise, the Manager of the second respondent stated that the cheque had already been honoured, the account of the appel- f lant having been credited and that the two cheques issued by the appellant for the sums of N150,000 and N75,000 had been paid out from the account to the appellant and his wife respectively. The payments were said to have taken place g after the representative of the second respondent returned from a session of the Central Bank of Nigeria Clearing House, which took place earlier in the morning of that day. h The first respondent felt that the second respondent was wrong in honouring the cheque because the stipulated period before payment on the cheque could be made was four working days. The second respondent countered by contending that Banking Regulations required four clearing sessions i of the Central Bank Clearing House to be held before the payment could be effected and that it acted accordingly. Hence, the institution of the action by the first respondent against the appellant and the second respondent jointly. j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Ltd 283 a Pleadings were filed and exchanged by the parties. They were also amended in the case of the appellant and the first respondent and further amended in the case of the first re- b spondent. At the end of the trial before Ademakinwa, J of the then Oyo State High Court, the first arm of the first respondents claim was refused and the remaining arms of the claim were granted in the following terms:– c “In the result, the plaintiff bank succeeded on all the reliefs (except the first relief) claimed and it is hereby ordered as follows:– 1. Declaration that the sum of N855,000 (sic) held by the first defendant bank at Ibadan and deemed credited to the ac- d count of the second defendant on the 28th of October, 1983, being proceeds on a cheque No. 066058 allegedly issued to the second defendant and paid into his account with the first defendant bank is the property of the plaintiff bank. 2. That the first defendant bank shall credit the account of the e plaintiff bank through the Central Bank Clearing House, Ibadan with the sum of N660,000 (sic). Alternatively, that both defendants shall jointly and severally refund the said sum of N660,000 (sic) to the plaintiff bank as money had f and received. 3. That both defendants shall jointly and severally pay to the plaintiff bank interest on the said sum of N660,000 at the prevailing fixed deposit rate with effect from 28th October, 1983. g 4. That the second defendant shall refund to the plaintiff bank the sum of N255,000 (sic) withdrawn out of the proceeds of the forged cheque and shall pay to the plaintiff bank interest on the said sum of N255,000 (sic) at the prevailing rate with h effect from the 28th October, 1983.” Dissatisfied with the judgment of the High Court, the appellant and second respondent herein appealed to the Court of Appeal. They contended, inter alia, that the forgery of the i cheque was not proved beyond reasonable doubt; that the learned trial Judge was wrong in holding that they should both jointly and severally return and pay the sum of N660,000 and that the appellant should refund the sum of j N225,000 with interest. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

284 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Held – a 1. Bankers may in certain circumstances be liable to persons who are not their customers for the tort of negligence which causes them pecuniary damage. b 2. The moment a bank places money to its customer’s credit, the customer is entitled to draw upon it. Never- theless, such withdrawal, ought to be predicated upon an c overriding need to be cautious where, for instance, no prior banker/customer relationship existed between the appellant and the plaintiff/respondent. 3. A paying bank is bound to make proper inquires and to d be cautious not to be negligent. Appeal dismissed.

Cases referred to in the judgment e Nigerian Adeyemo v. Arokopo (1988) 2 N.W.L.R. (Part 79) 703 f Agbonmagbe Bank v. C.F.A.O. (1966) 1 All N.L.R. 140 Awote v. Owodunni (No. 2) (1987) 2 N.W.L.R. (Part 57) 366 Bakare v. Apena (1986) 4 N.W.L.R. (Part 33) 1 g Imonikhe v. Attorney-General Bendel State (1992) 6 N.W.L.R. (Part 248) 396 Morah v. Okwuayanga (1990) 1 N.W.L.R. (Part 125) 225 Okeowo v. Migliore (1979) 11 S.C. 138 h Onifade v. Olayiwola (1990) 7 N.W.L.R. (Part 161) 130

Foreign i Gordon v. London City and Midland Bank Ltd (1903) A.C. 240 Underwood Ltd v. Bank of Liverpool and Martins (1924) 1 K.B. 775 j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Ltd 285 a Nigerian statutes referred to in the judgment Court of Appeal Act Cap 75 Laws of the Federation of Nige- ria, 1990, section 16 b Supreme Court Act Cap 424 Laws of the Federation of Ni- geria, 1990, section 22

Nigerian rules of court referred to in the judgment c Court of Appeal Rules, 1981 (as amended) Cap 62 Laws of the Federation of Nigeria, 1990, Order 1 Rule 21(1)

Counsel d For the appellant: Chief S.A. Adejumo (with him G.A. Adeniran) For the first respondent: S.B. Ajayi e For the second respondent: S.B. Latinwo

Judgment f UWAIS CJN: (Delivering the lead judgment) The appellant herein was the second defendant in an action brought by the first respondent, as a plaintiff, claiming jointly and severally against the appellant and second respondent (as first respondent) as follows:– g “(i) Declaration that the period regarding, deeming and or pre- suming a cheque presented for clearance through the Cen- tral Bank of Nigeria as cleared is four (4) working days. (ii) Declaration that the sum of N885,000 held by the first de- h fendant at Ibadan and deemed credited to the account of the second defendant on 28th October, 1983 being proceeds on a cheque No. 066058 allegedly issued to the second defendant and paid into his account with the first defendant is the i property of the plaintiff. (iii) An order compelling the first defendant to credit the account of the plaintiff through the Central Bank Clearing House, Ibadan with the said amount or any part thereof as money had and received – alternatively – an order against j the defendants jointly and severally to refund the said [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN 286 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

amount or any part thereof direct to the plaintiff as money a had and received. (iv) An order that the defendants refund the said sum of N885,000 (sic) to the plaintiff as money had and received”. b The facts of the case may be stated thus. On or about the 26th October, 1983, a cheque leaf No. 066058 for the sum of N885,000 deposited with the second respondent was received at the branch of the first respondent at Agodi, Ibadan. The cheque which was drawn on the first respondent was c purportedly issued by Messrs Robatek Nigeria Limited – an industrial company with headquarters at Lagos in favour of the appellant. On 27th October, 1983, the first respondent in an attempt to balance its account for the previous day, dis- d covered that the cheque was missing. This was at the close of day. Consequently, the account of the day could not be balanced. On the following day, that is, 28th October, 1983, a thorough search was made at the branch and it was found that the amount of N855,000 which could not be accounted e for, was represented by the missing cheque issued by Messrs Robatek Nigeria Limited. When by 11am of that day it became clear that the cheque could not be traced, the Manager of the branch contacted the Main branch in Ibadan of the f first respondent which is situated at Bank Road, Ibadan, in order to find out who it was that presented the cheque to the latter branch. The Manager was informed that the cheque was lodged by the second respondent, and he immediately got in touch with the Manager of the second respondent in g Ibadan. The former requested the latter not to honour the cheque on the ground that it had been lost. But to his surprise, the Manager of the second respondent stated that the cheque had already been honoured, the account of the appel- h lant having been credited and that the two cheques issued by the appellant for the sums of N150,000 and N75,00 had been paid out from the account to the appellant and his wife respectively. The payments were said to have taken place after the representative of the second respondent returned from a i session of the Central Bank of Nigeria Clearing House, which took place earlier in the morning of that day. The first respondent felt that the second respondent was wrong in honouring the cheque because the stipulated period j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Ltd 287 a before payment on the cheque could be made was four working days. The second respondent countered by contending that Banking Regulations required four clearing sessions b of the Central Bank Clearing House to be held before the payment could be effected and that it acted accordingly. Hence, the institution of the action by the first respondent against the appellant and the second respondent jointly. c Pleadings were filed and exchanged by the parties. They were also amended in the case of the appellant and the first respondent and further amended in the case of the first respondent. At the end of the trial before Ademakinwa, J of the then Oyo State High Court, the first arm of the first re- d spondents claim was refused and the remaining arms of the claim were granted in the following terms:– “In the result, the plaintiff bank succeeded on all the reliefs (except the first relief) claimed and it is hereby ordered as follows:– e 1. Declaration that the sum of N855,000 (sic) held by the first defendant bank at Ibadan and deemed credited to the account of the second defendant on the 28th October, 1983, being proceeds on a cheque No. 066058 allegedly issued to f the second defendant and paid into his account with the first defendant bank is the property of the plaintiff bank. 2. That the first defendant bank shall credit the account of the plaintiff bank through the Central Bank Clearing House, Ibadan with the sum of N660,000 (sic). Alternatively, that g both defendants shall jointly and severally refund the said sum of N660,000 (sic) to the plaintiff bank as money had and received. 3. That both defendants shall jointly and severally pay to the h plaintiff bank interest on the said sum of N660,000 at the prevailing fixed deposit rate with effect from 28th October, 1983. 4. That the second defendant shall refund to the plaintiff bank the sum of N255,000 (sic) withdrawn out of the proceeds of i the forged cheque and shall pay to the plaintiff bank interest on the said sum of N255,000 (sic) at the prevailing rate with effect from the 28th October, 1983.” It came to light, in the course of the proceedings before j the trial court, that the cheque for the sum of N885,000 [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN 288 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. purportedly issued by Messrs Robatek Nigeria Ltd was in a fact not issued by the company. Also that the company had no account with the first respondent at Agodi branch of the latter in Ibadan. It is pertinent to quote here the observation b made by the learned Judge, as relevant:– “The next issue to be determined in this case is whether the cheque in dispute was forged. Forgery has been defined in section 465 of the Criminal Code Cap 30 Laws of Oyo State as the making of a c false document or writing, knowing it to be false and with the intent that it may be used or acted upon as genuine. By virtue of section 137(1) of the Evidence Act Cap 112 Laws of the Federation of Nigeria, if the commission of a crime by a party to any proceeding is directly in issue in any proceeding, civil or criminal it must d be proved beyond reasonable doubt. It follows therefore that the allegation that the cheque was forged must be proved beyond reasonable doubt. It has not been possible to produce the cheque and the explanation offered for the failure is that the cheque is missing. I must say that e I accept this explanation. That not withstanding there is the evidence of the second PW who maintained that Robatek (Nigeria) Limited which was supposed to have issued the cheque to the second defendant had no account with the plaintiff bank. The second f PW had also disclosed that No. 066058 which was supposed to be on the cheque, was in fact the number for the cheque for the sum of N20 (sic) issued on the 22nd of November, 1982 by one G. Awolabi, who was a customer of the plaintiff bank. This cheque for N20 (sic) was tendered and accepted as exhibit V. g There is also the evidence of the third PW who identified himself as the Managing Director Robatek (Nigeria) Limited during the month of October, 1983 when the controversial cheque was supposed to have been issued. He has maintained firstly that Robatek (Nigeria) Ltd had no business dealings with the second defendant h and therefore had no need to make any payment to him either by cheque or otherwise and secondly that Robatek (Nig) limited had no account with the plaintiff bank or any bank in Ibadan for that matter. i . . . The second PW and third PW have impressed me as witness of truth. There is no doubt from, the circumstantial evidence adduced that the cheque in dispute was not a genuine one issued by Ro- batek (Nigeria) Limited. It is equally not in doubt that the cheque j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Ltd 289 a was issued to deceive any holder that the said company had an account with the plaintiff bank. I therefore, find as a fact that the cheque No 066058 for the sum of N885,000 (sic) alleged to have been issued in favour of the second defendant by Robatek (Nig.) b Limited was forged.” Dissatisfied with the judgment of the High Court, the appellant and second respondent herein appealed to the Court of Appeal. They contended inter alia that the forgery of the c cheque was not proved beyond reasonable doubt; that the learned trial Judge was wrong in holding that they should both jointly and severally return and pay the sum of N660,000 and that the appellant should refund the sum of d N225,000 with interest. In dealing with the issue of forgery, the Court of Appeal (Akanbi, JCA as he then was, Omololu-Thomas, JCA as he then was and Ogwugbu, JCA, as he then was) held as fol- e lows, as per Akanbi, JCA who delivered the lead judgment:– “There is no doubt in my mind that the trial Judge was of the view that the claim was founded on an allegation that the cheque was forged. f . . . An examination of the pleadings of the parties, the evidence led and the submissions of the plaintiffs counsel, emboldens me to say that this case was not founded on any allegation of forgery. No g where in the statement of claim was forgery pleaded. It was never alleged that the second defendant knew that the cheque was false. . . . Be that as it may, from the analysis I have made above, I cannot h but agree with the submission that the learned trial Judge was wrong to have based his conclusion on an allegation of forgery that was not pleaded or made the basis of the claim . . . So having regard to the conclusion I have reached above, I do not find it at all necessary to consider these submissions relating to the standard of i proof required to establish forgery in order to determine whether it was raised as a collateral issue or not.” Next learned Justice considered authorities on claim for money had and received and concluded that what the trial j court would be required to decide such a case might not be [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN 290 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the same as when the claim was predicated on an allegation a of forgery. The judgment of the Court of Appeal was as a result, concluded thus:– “In the instant case, the trial Judge held that the second defendant b ought not be allowed to keep the money credited to his account; hence he granted four out of the five declarations sought. I have already found that he based his decision on an allegation of forgery that was neither pleaded, nor proved; and failed to decide relevant pleadings of the parties. That being so I do not think the judgment c ought to be allowed to stand; but this is not to say that second defendant ought to be allowed to keep the money . . . I am inclined to the view that the justice of the case that neither of the parties should on principle be allowed to take advantage of the defective judgment. This case was (sic) to go through, albeit sadly, the d gamut of a retrial before another Judge of the High Court so that relevant issues may be properly set out and determined between the plaintiff and the second defendants.” (Italics mine.) The learned Justice then made the following order:– e “In the result, the appeal of the first defendant succeeds in toto and in so far as the second defendant is concerned the judgment of the trial Judge will be and is hereby set aside and a retrial of the case between him and the plaintiff is ordered before another Judge of the High Court.” f Aggrieved by this decision, the appellant appealed further before us. He formulated five issues for determination in his brief of argument. They read:– “(i) Whether the plaintiff actually paid the said sum of g N885,000 into the account of the second defendant with the first defendant by mistake of fact and without any negligence on its part or in a situation in which it will be unconscionable for the second defendant to keep money belong- h ing to the plaintiff? (ii) If the sum was not paid, whether the Court of Appeal was right to have refused to dismiss the case of the plaintiff in its entirety? (iii) Whether from the totality of the evidence proffered in this i case, the plaintiff’s claims ought to have succeeded not withstanding the subsisting finding that the cheque was cleared within the required period? (iv) Whether the Court of Appeal, having negative forgery was right in holding that the second defendant who was a bona j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Ltd 291 a fide holder for value of the cheque was not entitled to keep the money being proceeds of the cheque? (v) Whether the Court of Appeal was right in ordering a retrial b in this case, not between the original parties, but only between the second defendant and the plaintiff?” The first respondent also formulated five issues for determination in its brief of argument. They are:– c “(1) Whether the cheque for N885,000 as actually cleared or was merely deemed to be cleared; (2) Whether the question of forgery was central or collateral to the determination of the case before the lower courts; d (3) Whether in the circumstances of this case, the appellant ought to be allowed to keep the proceeds of the said cheque; (4) Whether the appellant could in fact be held to be a bona fide holder of the said cheque; and (5) Whether the plaintiff/respondent had behaved in any way or e whether there existed circumstances between the presentation of the said cheque and the discovery of the fraud, that caused the appellant to alter his position as to make it inequitable to make him refund so much of the proceeds of the f cheque already obtained by him.” In its brief of argument, the second respondent postulated 3 issues for us to determine. They read thus:– “1. Whether the first defendant/respondent, the New Nigeria g Bank Limited can be made a party in a trial ordered de novo when it cannot be affected in any way by the result of the retrial being a ‘Stakeholder who has returned the balance of N660,000 to the plaintiff/respondent with whom the second defendant/appellant is competing for the title to the funds. h 2. Whether the second defendant/respondent in the original suit in the high Court instituted by the plaintiff/respondent can now insist in making the first defendant/respondent a party when the plaintiff/respondent who has collected the i balance of N660,000 with the first defendant/respondent is not interested in litigating against the first defendant/respondent. 3. Whether the first defendant/respondent who acted without negligence throughout the proceedings as a ‘Stakeholder’ j and held to be free from any blame can be made a party to [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN 292 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

the proceedings de novo when its proper role is that of a a witness who is not claiming any relief whatsoever.” I think, flowing from all the above issues for determination is the simple question whether the Court of Appeal was right b in ordering a retrial and if so whether the second respondent should be exempted from being a party to the retrial. At the hearing of this case before us, all the counsel representing the parties adopted their briefs only and did not ad- c vance any argument or address us by way of expiation of the written arguments in their briefs. The appellant’s contention in his brief of arguments, is that the order for retrial made by the Court of Appeal is inappro- d priate in this case because the court found that there had been misdirection in fact and law by the High Court, thereby implying that there had been a mistrial in the High Court. It is argued that the Court of Appeal should have given a deci- e sion on the merit of the case as properly guided by the facts of law in the case. The order of retrial will lead to miscarriage of justice as the first respondent, who had “failed to plead all the ingredients upon which money paid under a f mistake of fact could be recovered, will then be able to amend his pleadings to the prejudice of the defendants”. It is urged upon us, since the crucial findings of the trial court did not depend on the credibility of the witnesses, to look at g the accepted evidence on the record of proceedings and enter judgment accordingly by dismissing the claims of the first respondent. On the other hand, it is contended in the brief of argument h that the Court of Appeal erred in law in making the retrial not between the original parties to the case but as between the appellant and the first respondent herein. It is argued further that it is clear from the totality of the evidence in this i case that the second respondent is a necessary party since it will be absurd or impracticable to determine the real question or questions in controversy between the parties, with the second respondent, through which money was paid to the appellant on a cleared cheque absent. The definition of j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Ltd 293 a “necessary parties” to a case by Oputa, JSC in the case of Green v. Green (1987) 3 N.W.L.R. (Part 61) 480 at 482 is cited. b It is canvassed that the basis on which the Court of Appeal ordered a retrial is manifestly wrong as it emanated from a misconception of the doctrine of payment made under a mistake of fact or payment made in a situation in which it will c be unconscionable for one party to keep money belonging to another, which is not the position in the present case, as the Court of Appeal had itself negatived forgery on the part of the appellant. Since the first respondent failed to show that d the second respondent was aware of any invalidating circumstances in the issuance of the cheque for N885,000, it is then precluded from recovering the sum in question. The issues formulated in the brief argument of the first re- e spondent do not touch on the issue of retrial. However the point was argued in the brief as part of the reply to the argument of the appellant on issues (iv) and (v) of his brief of argument. It is argued that since the Court of Appeal found f that no negligence had been established against the second respondent in crediting the account of the appellant with the sum of N660,000 and paying over to him and his wife the sum of N225,000, the court below was right to exclude the g second respondent from being a party to the retrial. It is further argued that by that decision of the Court of Appeal the second respondent is not a necessary party for the determination of the dispute between the appellant and the first re- h spondent. The case of Green v. Green (1987) 3 N.W.L.R. (Part 61) 480 which was cited by the appellant in support of his case, is said to be inapposite because it was concerned with the joinder of parties and not retrial as ordered by the i Court of Appeal. In the brief argument of the second respondent, it is submitted that the second respondent acted honestly throughout the transaction concerning the cheque and hence it was not j found to be negligent to either the appellant or the first [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN 294 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. respondent. In view of this, the second respondent cannot be a affected by whatever judgment will be given at the retrial of the case, particularly since the balance of N660,000 in its possession had been paid over to the first respondent follow- b ing the judgment of the High Court in its (first respondent) favour. Therefore, the first respondent will have nothing to claim from the second respondent at the rehearing of the case. The law on the joinder of parties is said to be that where a court can decide finally and effectually all the issues c in controversy between the parties before it, the court will refuse an application to join another party as co-defendant. The dictum of Eso, JA (as he then was) in the case of Laju- moke v. Mrs Doherty (1969) 1 N.M.L.R. 281 is cited in sup- d port. It is submitted that the appellant cited the principle in Green v. Green (supra) out of context since the ratio in the case is against the appellant’s contention in the present case. Now the power of the Court of Appeal to remit a case to e the lower court for retrial is derived from the provisions of section 16 of the Court of Appeal Act Cap 75 Laws of the Federation of Nigeria, 1990 and Order 1 Rule 21(1) of the Court of Appeal Rules Cap 62. The former provides, as rele- f vant, as follows:– “16. The Court of Appeal may, from time to time . . . and generally shall have full jurisdiction over the whole proceedings as if the proceedings had been instituted in the Court of Ap- peal as court of first instance and may rehear the case in g whole or in part or may remit it to the court below for the purpose of such rehearing or in the case of an appeal from the court in that court’s appellate jurisdiction.” While the latter reads thus:– h “21(1) On hearing of any appeal the court may, if it thinks fit, make any such orders as could be made in pursuance of an application for a new trial . . .” It is clear from the foregoing that the power of the Court of i Appeal to order retrial in any event is discretionary. That it has the power to order a retrial in the present case is not in issue but whether it exercised its discretion properly in doing so. j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Ltd 295 a The general principle is that where a court fails to deal with a material point, such failure may result in an appellate court ordering a retrial or a hearing de novo. Therefore, a b retrial of a case may be ordered on the ground of an irregularity in the conduct of the proceedings before the trial court (or even an appellate court) when the irregularity or the lapse complained of is so substantial that it cannot be cor- c rected so as to be consistent with a decision on the merit of the case in favour of any of the parties see Onifade v. Olayi- wola (1990) 7 N.W.L.R. (Part 161) 458, Adio, JCA (as he then was) observed as follows:– d “An order for a retrial invariably implies that one of the parties usually the plaintiff, is being given another opportunity to relitigate the same matter. In exercising its discretion in favour of making an order for retrial for a case, the paramount and only consideration is to ensure that justice is done to both parties and the power should e not be exercised in such a manner that will make it appear that the court is only concerned party being permitted or encouraged to harass the other by means of unjustified or unnecessary litigation. Therefore where a plaintiff fail to prove his case in the court below, an appellate court will neither order a retrial or enter a judg- f ment of non-suit, if it so (sic) would amount only to give the plaintiff another opportunity of proving what he failed to prove in the first instance – Elias v. Disu (1962) 1 S.C.N.L.R. 361; (1962) 1 All N.L.R. 214. Consequently, an appellate court before deciding g to make an order for retrial should satisfy itself that the other party is not being to such an extent that there would be a miscarriage of justice. See Ayoola v. Adebayo (1969) 1 All N.L.R. 159.” I endorse this statement of the principle applicable to order h for retrial. In the present case, the learned trial Judge relied fundamentally on the allegation of the cheque being forged to arrive at his decision. The Court of Appeal was right when it stated as follows as per Akanbi, JCA:– i “In the instant case, the trial Judge held that the second defendant ought not to be allowed to keep the money credited to his account; hence he granted four out of the five declarations sought. I have already found that he based his decision on the allegation of forgery that was neither pleaded, nor proved; and failed to decide relevant j issues and make proper findings based on the pleadings of both [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN 296 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

parties. That being so I do not think the judgment ought to be al- a lowed to stand.” (Italics mine.) Since the issues joined on the pleadings were not adequately considered by the learned Judge because of the aforesaid b misdirection, it became necessary for Court of Appeal to set aside his decision and order a retrial. This is in consonant with a number of authorities in which it was held that where a trial Judge has failed in his primary duty to make findings on issues joined on the pleadings and the evidence is such c that an appellate court cannot make its findings and come to a decision on all the relevant issues, a retrial is the proper order. (See Okeowo v. Migliore (1979) 11 S.C.138; Bakare v. Apena (1986) 4 N.W.L.R. (Part 33) 1; Awote v. Owodunni d (No. 2) (1987) 2 N.W.L.R. (Part 52) 367; Adeyemo v. Aro- kopo (1988) 2 N.W.L.R. (Part 79) 703 and Morah v. Ok- wuayanga (1990) 1 N.W.L.R. (Part 125) 255). This brings me to the observation made by Nnemeka-Agu, e JSC in the case of Imonikhe v. A.G. Bendel State (1992) 6 N.W.L.R. (Part 248) 396 at 408C, to wit:– “. . . The discretion whether or not to order a retrial was that of the Court of Appeal and not of this Court. I also believe that the clear principle discernible from any decided cases is that unless that f court comes to the conclusion that the exercise of it was manifestly wrong, arbitrary, reckless injudicious or contrary to justice, it cannot interfere, even if it might have exercised the discretion differ- ently, if the discretion were that of this Court. (See on this The University of Lagos and another v. C.I.O. Olaniyan and 2 others g (1985) 1 NLWR (Part 1) 156 at 165; The University of Lagos and another v. M.I. Agioro (1985) 1 N.W.L.R. (Part 1) 143; John Aku- jobi Nwabueze v. Obioma Nwosu (1988) 4 N.W.L.R. (Part 88) 257 and so many other cases.” h From the foregoing, I am satisfied that the Court of Appeal exercised its discretion properly to order the retrial of this case in the High Court of Oyo State before another Judge. There is, however, one lingering point on the matter, and i that is whether the court below was right in excluding the second respondent from being a party at the retrial it ordered. The Court of Appeal arrived at the decision to order a retrial on the basis that the issues joined, by the parties to the case, on their pleadings and the evidence adduced, had not j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Ltd 297 a been properly considered by the trial court because its judgment was based on the allegation of forgery. For that reason the proceedings in the High Court were irregular and b there was no findings or the findings of the trial court were insufficient to justify the case of any of the parties to be determined on the merits. That is, in fact, the reason for the court below to order a retrial. How, then could the court rightly arrive at the conclusion that the second respondent c was not liable to the first respondent for the claims he brought jointly and severally against the second respondent and the appellant? It is either the trial was properly conducted, in which case there would be no order for retrial or d that there was a mistrial and, therefore, a retrial must take place. In the case of the former it is possible for the second respondent to be found not liable to the first respondent but not so in the case of the latter. It of course transpired in the e course of this appeal, as stated in the briefs of arguments of both the first and second respondents, that the sum of N660,000 being part of the sum of N885,000 claimed by the first respondent, had been paid over by the second respondent to the first respondent after judgment of the High Court f was delivered and application of stay of execution pending appeal to the court below was unsuccessfully made to the High Court. Though this fact was available at the time the judgment of the Court of Appeal was delivered, it does not g appear from the judgment of the court that the second respondent was exempted from the retrial because of the payment of the amount. It follows that there is nothing to stop the second respondent from relying, as a defence at the re- h trial, on the repayment made of the sum of N660,000 to the first respondent, to avoid liability on that amount. But there will remain the question of the balance of N225,000 paid to the appellant by the second respondent. The High Court will have to determine whether, in the context of the claim before i it, the appellant and the second respondent are all liable to the first respondent and, if so, jointly or severally. It is obvious, therefore, that the order exempting the second respondent from the retrial is, with respect, premature and therefore j wrong. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais CJN 298 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

In the result, this appeal, fails in the main. The decision of a the Court of Appeal is upheld but varied with regard to the participation of the second respondent in the retrial it ordered. It is accordingly hereby ordered that the case be re- b mitted to the High Court of Oyo State for retrial before another Judge, other than Ademakinwa, J. All the parties herein shall participate in the retrial. The first respondent is entitled to N1,000 costs against the appellant. c OGUNDARE JSC: I agree with the judgment of my learned brother Uwais, CJN just read. I too dismiss the appeal and vary the order for retrial made by the court below. All parties to the action are to be parties to the retrial of it. d I abide by the order of costs made in the judgment of Uwais, CJN. MOHAMMED JSC: I have had a preview of the judgment of my Lord, the Chief Justice of Nigeria, M.L. Uwais, and I e agree with him that this appeal ought to be dismissed. The Court of Appeal is quite right to observe that the judgment of the learned trial Judge was not based on the pleadings and evidence adduced before him. It is plain that the trial court f based its decision on the allegation of forgery. Forgery being a criminal offence must be specifically pleaded and proved before a trial court can act on its allegation. Relevant issues, which the parties have joined in the pleadings were not also fairly considered in the judgment of the High Court. I there- g fore entirely agree that the proper course to follow in this appeal is an order for retrial which the Court of Appeal had quite correctly ordered. Accordingly, this appeal fails and it is dismissed. I endorse h all the consequential orders made in the lead judgment, including the assessment of cost. ONU JSC: I had the privilege to read in draft from the i judgment just delivered by my learned brother Uwais, Chief Justice of Nigeria, I agree with him that the appeal should be dismissed in that I hold the firm view that the appropriate order to make in the circumstances and which the court below did make, and right too, is a trial de novo. j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Onu JSC Alhaji Muriana Adesola Kareem v. Union Bank of Nigeria Ltd 299 a I wish to add by pointing out that in a properly constituted action such as this, wherein the cause of action is competent, the issues are fully joined inter partes with the “necessary b parties” before the court, and founded on a claim based on the money had and received to the plaintiff/respondent’s use, it will be wrong to exculpate the second defendant (appellant herein) or hold that the appellant should be allowed to keep the proceeds of the cheque for N885,000 or be held to be a c bona fide holder of the said cheque presented and drawn on plaintiff/respondent, though wrongly in favour of the first defendant/respondent and out of which the appellant had withdrawn N225,000 on the pretext that the period provided d by the regulations for effecting payment on the cheque was strictly complied with by the first defendant/respondent, the stakeholder, before such payments were made out to the appellant and his wife. e It has been decided by this Court in Agbonmagbe Bank v. C.F.A.O. (1966) 1 All N.L.R. 140, inter alia, that bankers may in certain circumstances be liable to persons who are not their customers for the tort of negligence which causes f them pecuniary damage. Thus, although it was held by Lord Lindley as long ago as 1903 in Gordon v. London City and Midland Bank Ltd (1903) A.C. 240 at 249 that:– “It must never be forgotten that the moment a bank places money to g its customer’s credit the customer is entitled to draw upon it”. nevertheless, such withdrawal, in my opinion, ought to be predicated upon an overriding need to be cautious where, for instance, as in the case herein, no prior banker/customer re- h lationship existed between the appellant and the plaintiff/respondent. See A.L. Underwood v. Bank of Liverpool and Maritime Ltd (1924) 1 K.B. 775 where it was held that a paying bank is bound to make proper inquires and to be cau- i tious not to be negligent. The court below in the instant case was, in my view, therefore justified to have ordered a retrial although not in the form it held, as between the appellant and the first j respondent, but as between the plaintiff/respondent (as [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Onu JSC 300 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. plaintiff) on the one hand, and the appellant and first defen- a dant/respondent jointly (as defendants), on the other hand. In other words, that the entire case be tried de novo to ensure that even-handed justice is done to all sides vide section 16 b Court of Appeal Act, Laws of the Federation of Nigeria, 1990 (Cap 75) and section 22 of the Supreme Court Act, 1960 Cap 424 Laws of the Federation of Nigeria, 1990; mo- reso that the learned trial Judge in this case had erroneously c based his decision on an allegation of forgery that was not pleaded. As a matter of fact, had the plaintiff/respondent herein cross appealed, I would have unhesitatingly allowed its appeal. See also Order 1 Rule 21(1) Court of Appeal d Rules. It is for these reasons and the fuller ones contained in the judgment of my learned brother Uwais, CJN with which I had herein-before concurred that, I too dismiss this appeal, e order a retrial and make the same consequential orders including those for costs as therein contained. ADIO JSC: I have had the advantage of reading in advance, the judgment just delivered by my learned brother, Uwais, f CJN, and I entirely agree with it. The appeal fails in the main and the decision of the Court of Appeal is upheld to the extent stated in the lead judgment. I abide by the consequential orders, including the order for cost. g Appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Nigeria Deposit Insurance Corp v. Nigeria Hardwood Co Ltd 301 a Nigeria Deposit Insurance Corporation v. Nigeria Hardwood Company Limited b FAILED BANKS TRIBUNAL, BENIN ZONE MOMOH J Date of Judgment: 28 MAY 1996 Suit No.: FBT/B2/1/96 c Banking – Failed Banks Tribunal – Proper way to deny indebtedness to a bank – Failure to deny specific allegation of indebtedness – Effect d Facts The applicant applied pursuant to section 11(1) of the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No. 18 of 1994 (as amended) for the recovery e of debt due to New Nigeria Bank on various loans and overdraft facilities granted the respondent. The applicant claimed the sum of N8,685,965.50 (Eight Million, Six Hundred and Eighty-five Thousand, Nine Hundred and Sixty-five Naira f and Fifty Kobo) and the respondent paid N900,000 (Nine Hundred Thousand Naira) to reduce its indebtedness. The respondent only filed and contended that negotiation was still in progress to determine the exact amount of its in- g debtedness. Held – That the reply constitutes an admission since it did not spe- h cifically deny the allegations in the application. There was no denial of the factual averments of indebtedness in the application, the respondent is deemed in law to have admitted the applicants claims which are consequently taken as estab- i lished without further proof, by virtue of Order 31 Rule 9 of Federal High Court (Court Procedure) Rules (applicable in the Tribunal by virtue of paragraph 27 Schedule 1 of the Failed Banks Decree No. 18 of 1994, as amended. j Judgment against the respondent. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

302 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Case referred to in the judgment a Nigerian Din v. African Newspapers Ltd (1990) 5 N.S.C.L.J. 209 b Nigerian statute referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No. 18, 1994 (as amended), section 11(1) c Nigerian rules of court referred to in the judgment Federal High Court (Court Procedure) Rules Cap 134 Laws of the Federation of Nigeria, 1990, Order 31 Rule 9 d Counsel For the applicant: Mr Nnamdi Nwabueze For the respondent: Mr J.O. Akpojaro e Judgment MOMOH J: The application is brought pursuant to section 11(1) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (hereinafter f referred to as “the Decree”) for the recovery of debt owed to a failed bank, New Nigeria Bank Plc. The application of 12 paragraphs contain the following averments:– “1. The applicant states that the name and address of the bor- g rower which maintains A/C 5056 with the New Nigeria Bank Plc, Abraka branch are Nigeria Hardwood Company Limited of Edani Obiaruku, P.O. Box 44, Sapele, Delta State. h 2. The applicant states that the borrower/respondent is a body corporate whose principal place of business is as stated in paragraph one above. 3. The applicant further states that the names of the directors of the borrower/respondent are as follows:– i a. Chief Michael C.O. Ibru (Chairman) b. Chief J.J. Adjarho c. G.H.S Robert d. Mr Felix O. Ibru j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corp v. Nigeria Hardwood Co Ltd 303 a e. Chief A.O. Eguawen f. Mr G.M. Otubu 4. The applicant avers that as a result of the banker/customer b relationship existing between the New Nigeria Bank Plc and the borrower/respondent, the New Nigeria Bank Plc at the request and application of the respondent granted loan and overdraft credit facilities to the respondent as follows:– a. The respondent requested for and was on 24th March, c 1978 granted an overdraft/loan of N300,000 (Three Hundred Thousand Naira) with interest and to expire on 24th March, 1979. b. The respondent requested for and was on 3rd June, 1980 d granted an overdraft/loan of N134,366.26 (One Hundred and Thirty-four Thousand, Three Hundred and Sixty-six Naira, Twenty-six Kobo) with interest and to expire on 3rd September 1980. e c. The respondent requested for and was on 15th July, 1986 granted an overdraft/loan of N385,318.88 (Three Hun- dred and Eighty-five Thousand, Three Hundred and Eighteen Naira, Eighty-eight Kobo) with interest and to expire on 15th November, 1986. f 5. The applicant avers that the borrower/respondent accordingly utilised the above overdraft/loan facilities made available to it. 6. The applicant avers that as at 31st December, 1995 the out- g standing amount of the various loan and overdraft credit facilities made available to the respondent by the N.N.B. Plc (which added up together was was N8,685,965.50 (Eight Million, Six Hundred and Eighty five Thousand, Nine Hun- dred and Sixty five Naira, Fifty Kobo). h 7. The applicant avers that the New Nigeria Bank Plc in the normal course of business accordingly sent statements of accounts to the respondent which the respondent duly accepted without objections. i 8. The respondent has by various acts, conduct and writing duly acknowledged its indebtedness to the New Nigeria Bank Plc and in pursuance of that paid the sum of N900,000 (Nine Hundred Thousand Naira only) to the New Nigeria Bank Plc on 26th January 1996 in reduction of its j indebtedness to the New Nigeria Bank Plc. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 304 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

9. The New Nigeria Bank Plc has at various times demanded a the respondent to pay the outstanding amount of the loans/overdraft made available to it, but the respondent has failed, refused or neglected to pay same. b 10. The respondent as security for the loans/overdraft credit facilities made available to it charged in favour of the New Nigeria Bank Plc its undeveloped land at Idale Waterside near Obiaruku, Delta State. 11. The applicant avers that due to the deteriorating financial c condition of New Nigeria Bank Plc, the Central Bank of Nigeria declared it a distressed bank and subsequently took control of it in pursuance of which it appointed the applicant to superintend over the affairs of the New Nigeria Bank Plc. d 12. The applicant will rely on all the various documents relevant to this case particularly but not limited to the application and approvals given for the various loans/overdraft, statement of account sent to the respondent, demand notice, e recommendation of the Central Bank of Nigeria or the N.D.I.C.” The memorandum of appearance was filed on behalf of the respondent by one G.N. Robert a Director of the Company. f The respondent’s Reply of 4 paragraphs to the petition reads thus:– “1. With regard to the entire Statement of Claim in this application, the respondent says categorically that negotiation is still on as to what amount is finally owed. In this regard, the g respondent will rely on its letter dated 17th April, 1996. In further reply, the respondent says that in the above letter of 17th April, 1996, the respondent requested:– (1) That the principal loan had been paid. h (2) That they be granted 60% of the interest element as against the 25% already granted them. (3) That the payment of the balance of 40% be spread over four (4) equal instalments as from the end of April, i 1996. 2. That in further reply to the entire claim, the respondent says that there had been no reply to this letter which was also copied to the Managing Director of Nigeria Deposit Insur- ance Corporation (“NDIC”) and also New Nigeria Bank Plc j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corp v. Nigeria Hardwood Co Ltd 305 a respectively before this application was served on the respondent. 3. The respondent therefore pleads that this application is b brought post haste and NDIC ought to finally ascertain the exact figure that ought to be claimed. 4. The respondent pleads that this application be withdrawn at this stage.” c On the return date 13th May, 1996, Mr Nnamdi Nwabueze learned Counsel for the applicant submitted that the respondent’s reply is tantamount to an admission and that the applicant is entitled to judgment. He relied on the provisions of d section 12 of Decree (hereinafter referred to as “the De- cree”). The section provides that:– “The Tribunal shall on the return date and on a receipt of a reply to the notice of an application made under section 11(1) of this De- cree, if the debtor admits the debt, enter judgment and ask the e debtor to appear before it to show cause why the Tribunal should not invoke its powers under this Decree to recover the outstanding debt.” Learned Counsel also relied on Paragraph 11 of the Sched- f ule 1 to the Decree which provides that:– “Where the debtor admits the debt, the Tribunal shall, on receipt of his reply, summon him to appear before the Tribunal as specified in section 12 of this Decree.” g It was further submitted that it is a requirement of the Rules of this Tribunal that specific allegations of facts be specifically denied or taken as admitted and that it shall not be sufficient to deny allegations of facts evasively or generally. h For that proposition, learned Counsel referred to the Federal High Court (Civil Procedure) Rules which are applicable to civil cases in the Tribunal where the Rules of procedures set out in Schedule 1 to the Decree contain no provision in re- i spect of any matter relating to or connected with the hearing of a civil case. Reference was made to Order 31 Rules 9 to 13 of the Federal High Court Rules and decision in Din v. African Newspapers Ltd (1990) 5 N.S.C.L.J. page 209 at j 217. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 306 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

In reply Mr J.O. Akpojaro, learned Counsel for the respon- a dent submitted that the reply filed by the defendant/respondent suggests that the applicant’s claims are not admitted. That the amount claimed is being challenged on b the ground that it has not been ascertained.

It is my Ruling that the reply filed by the respondent did not constitute denial of the specific allegations of fact averred in the application which clearly established the in- c debtedness of the respondent to the tune of N8,685,965.50 as at 31st Dceember, 1995 but of which the respondent made part payment of N900,000 on 26th January, 1996. The applicant was definite on the amount due on the loan granted. d The various sums were ascertain and referable to the 3 separate loans granted. Not a single averment in the application was denied either specifically or by necessary implication. The reply failed to meet the provision of paragraph 10(1) of e Schedule 1 to the Decree requiring that the debtor shall specify in his reply “which of the facts and grounds alleged in the application he admits or denies”. The reply is lacking in that regard. f All that the reply contains in effect is that the respondent was negotiating and proposing vide its letter of 17th April, 1996 on how to liquidate its indebtedness and that the amount is yet to be ascertained. The letter referred to was g written after the action had been filed and after due service on the respondent which was effected on 19th March, 1996. The respondent should have no doubt as to the amount due having received the petition which clearly spelt out details of h how the amount claimed was arrived at. In any case the respondent if in doubt as to the balance ought to have applied for further particulars as allowed by the Decree. Paragraph 13(1) of Schedule 1 to the Decree allows any party to the i application wishing to have further particulars or other di- rectives of the Tribunal to apply “at anytime after the entry of appearance but not later than seven days after the filing of the reply”. The respondent did not avail itself of that provision. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corp v. Nigeria Hardwood Co Ltd 307 a Furthermore, the reply did not meet the requirement of Or- der 31 Rule 9 of the Federal High Court Rules requiring of the defendant (or respondent in this Tribunal) to deny all b such material allegations of facts intended to be denied at trial and that:– “Every allegation of fact, if not denied specifically or by necessary implication or stated to be not admitted shall be taken as established at the hearing.” c There was no denial of the factual averments in the application and the defendant is deemed in law to have admitted the applicant’s claims. A fortiori the applicant’s claims are taken d as established without further proof thereof. I uphold the submission that the plaintiff shall be entitled to judgment under section 12 of the Decree repeated in paragraph 11 of the Rules in Schedule 1 to the Decree. Accordingly I order as follows:– e (1) Judgment be entered for the applicant in the sum of N8,685,965.50 claimed less the N900,000 part payment. (2) The respondent through its representative, Chief J.J. Ad- jarho (a director of the respondent/debtor) on record is f hereby summoned under section 12(1) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 to appear and show cause why the Tribunal should not invoke its powers under the Decree to recover the judgment debt. g (3) Matter adjourned to Thursday, 11th June, 1996 for the respondent to show cause. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

308 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Limited and Others (No. 1)

FAILED BANKS TRIBUNAL, ZONE II, LAGOS b OPE-AGBE J Date of Judgment: 12 JULY 1996 Suit No.: FBFMT/L/ZII/04/96

Banking – Directors of Company – Not to be joined in action c against defunct bank at the Failed Banks Tribunal – Whether liable for debt owed to a Failed Bank automatically – Failed Banks Decree No. 18 of 1994 (as amended) Companies – Lifting the veil of Incorporation under Failed d Banks Decree No. 18 of 1994 (as amended) – When to do so – Resignation of Directors – Duty to comply with section 292(1), (4) and (5) Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990 – On whom lies e – Whether on the resigning Director or the Company

Facts The applicant, Nigeria Deposit Insurance Corporation, as f receiver/liquidator of Republic Bank Limited claimed against the first to seventh respondents jointly and severally the sum of N3,565,212.35 being the amount of overdraft outstanding against the respondents. Evidence was given g and legal submissions were made on behalf of both sides. The sixth respondent in particular argued that he was not a Director of the Company as he had resigned a long time ago since he ceased to be the Legal Adviser of the Company. h The Court however, suo motu considered whether it was proper that Directors of Companies owing failed banks should be joined as respondents in the action for the recovery of such debts. Counsel for Nigeria Deposit Insurance i Corporation argued that such directors should be necessary parties to the action because they were likely to be affected by the result of the action in that if there was insufficiency of assets of the Company on the levying of execution, the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 309 a properties of the directors would be liable for execution, in- accordance with section 15(7) of Failed Banks Decree No. 18 of 1994 (as amended) which provides:– b “(7) If the money obtained from the sale of properties under subsection 6 of this section is still not sufficient to offset the outstanding loan and interest thereon, the Tribunal may, subject to section 290 of the Companies and Allied Matters Decree, levy execution on the personal properties of the di- c rectors of the body corporate, partners of the partnership or individuals of the association as the case may be, which shall be sold and applied in satisfaction on the outstanding debts, in accordance with the provisions of this section.” d Since section 11(2)(a), (b)(ii) of the Failed Banks Decree and section 290 Companies Allied Matters Act features prominently in the judgment. They are hereby reproduced:– “11(1) An application for the recovery of a debt owed to a e failed bank shall be brought before the Tribunal by the Receiver or Liquidator, by a person appointed by the Central Bank of Nigeria or the Nigeria Deposit Insur- ance Corporation. (2) The application referred to in subsection (1) of this sec- f tion shall contain the following, that is:– (a) the name and address of the borrower; (b) if the borrower is a body corporate, a partnership or a sole trader; g (i) the address of its principal place of business, and (ii) the names and addresses of its shareholders, directors, proprietors or partners, as the case may be.” h Section 290 of Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990:– “Where a Company:– i (a) receives money by way of loan for specific purpose; or (b) receives money or other property by way of advance payment for the execution of a contract of project; and (c) with intent to defraud, fails to apply the money or other property for the purpose for which it was received, every j director or other officer of the company who is in default [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

310 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

shall be personally liable to the party from whom the a money or property was received for a refund of the money or property so received and not applied for the purpose for which it was received provided that nothing in this section shall affect the liability of the company it- b self.” Held – 1. Reading through sections 11, 12, 13, 15(5)(b), 15(7) and c 16 Failed Banks Decree No. 18 of 1994 (as amended) one gets a clear picture of the intention of the law maker namely that the borrower is brought before the Tribunal after hearing and judgment given, execution follows. d Section 11(2)(a) and (b)(ii) is meant for the sole purpose of execution. This is because if it were otherwise, the section should have gone further to state that, if the borrower is a director as is the case under Part III under of- e fences and penalties, then this and this should happen. Section 11(2)(a) and (b)(ii) should be construed in its ordinary and natural meaning which is a request for the names and addresses of the shareholders, directors, etc. and should not be extended beyond its onerous meaning. f 2. The lifting of the veil of incorporation is meant for the purpose of levying execution as prescribed in the Decree and not for making directors parties to the action. g 3. Names of directors struck out. 4. Where there are conflicts in the evidence given by a party in a civil suit on a particular issue, the court cannot choose between the two. The conflict must however be h very fundamental and it should go to the root of the matter. 5. Where evidence given by a party to any proceedings was not challenged by the opposite party who had the oppor- i tunity to do so, it is always open to the court seized of the proceedings to act on the unchallenged evidence before it (Omoreghe v. Lawani (1990) 3–4 S.C. 108 at 117 (followed). j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 311 a Per curiam “On the issue of resignation of the sixth respondent, there is no evidence to contradict or challenge his evidence that he b resigned his directorship of first respondent since 1983. The fact that his name still remains on form CO7 should not be put at the feet of the sixth respondent having sent in his letter of resignation which was accepted, a piece of evidence which remains unchallenged and uncontradicted, it was the c duty of the first respondent to comply with section 292(1), (4) and (5) of the Companies and Allied Matters Decree 1990 otherwise known as CAMA.” 6. A person should not be joined as a defendant against d whom there is no claim by the plaintiff. The test as to whether or not a person should be joined as a party to an action is whether the order the plaintiff seeks from the court affects the interference in the enjoyment of that other’s legal rights. e Per curiam “The question I ask is, are the second third, fourth, fifth, sixth and seventh respondents necessary parties to this action? It has been held that a person should not be joined as a f defendant against whom there is no claim by the plaintiff. The test as to whether or not a person should be joined as a party to an action is whether the order the plaintiff seeks from the Court affects the interference in the enjoyment of g that other’s legal rights. (See on this the case of Chief Oluji- tan and another v. Deacon Oshatoba and another (1992) 5 N.W.L.R. (Part 241) 326 at 335 C–D. Although the second to seventh respondents are persons who may be likely affected by the result of this case, it is however not in a direct h way. It is after some stages, have been passed and it only relates to execution.” 7. Section 15(7) of the Failed Banks Decree No. 18 of 1994 is subject to section 290 of Companies and Allied Mat- i ters Act. To hold the directors liable the applicant should establish the provisions of the sections. 8. The lifting of the veil of incorporation is meant for the purpose of levying execution. j Names of the Directors struck out. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

312 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Cases referred to in the judgment a Nigerian Akpapuna v. Nzeka (1983) 2 S.C.N.L.R. 1 b Balogun v. Amubikanhum (1985) 3 N.W.L.R. (Part 11) 27 Emegokwe v. Okadigbo (1973) 4 S.C. 113 Esenwosu v. Ngonadi (1992) 3 N.W.L.R. (Part 228) 154 c Federal Housing Authority v. Sommer (1986) 1 N.W.L.R. (Part 17) 533 George v. Dominion Flour Mills Ltd (1963) 1 A.N.L.R. 71 Idehen v. Idehen (1991) 6 N.W.L.R. (Part 198) 382 d Itansehinwa v. Ikueduyi (1991) 3 N.W.L.R. (Part 179) 278 Laguro v. Toku (1992) 2 N.W.L.R. (Part 223) 278 Obi v. Ozor (1991) 9 N.W.L.R. (Part 213) 94 e Okagbue v. Romaine (1982) All N.L.R. 111 Omoboriowo v. Ajasin (1984) 1 S.C.N.L.R. 108 Orizu v. Anyaeghunam (1978) 5 S.C. 21 f Osakwe v. Governor of Imo State (1991) 5 N.W.L.R. (Part 191) 318 Overseas Construction Ltd v. Creek Enterprises Ltd (1988) 3 N.W.L.R. (Part 13) 467 g Rivway Lines Ltd v. R.M.U. (1993) 7 N.W.L.R. (Part 308) 692 Sodipo v. Lemminkainen OY (1985) 2 N.W.L.R. (Part 8) 547 h Total Nig. Ltd v. Nwako (1978) 5 S.C. 1 Tukur v. Government of Gongola State (1989) 5 N.W.L.R. (Part 117) 517 U.D.C. v. Ladipo (1971) 1 N.M.L.R. 81 i

Nigerian statutes referred to in the judgment Companies and Allied Matters Cap 59 Laws of the Federa- tion of Nigeria, 1990, sections 290; 292(1), (4) and (5) j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 313 a Failed Banks (Recovery of Debts) and Financial Malprac- tices in Banks Decree No. 18 of 1994 (as amended), sections 11(2), 15(7) b Counsel Appear in person: Dr. Nylander For the applicant: Mr E.O. Ofodile, (with him Mr Demola c Olamide) For the first, second, third and fourth respondents: Mr P. Amaran d For the fifth respondent: Mr R. Seriki Judgment OPE-AGBE J: The applicant, Nigeria Deposit Insurance e Corporation (hereinafter referred to as “NDIC”) as receiver/liquidator of Republic Bank Limited claims against the first to seventh respondents jointly and severally the sum of N3,565,212.35 being the amount of overdraft outstanding f against the respondents. The application includes statement/particulars of the indebtedness. Initially the Law Firm of Abiodun Adesanya and Co en- g tered appearance dated the 27th February, 1996 on behalf of all the respondents, that is, the first, second, third, fourth, fifth, sixth and seventh respondents. A reply dated the 12th March, 1996 was also filed on their behalf. Subsequently the h Law Firm of Ayanlaja, Adesanya and Co filed a reply on behalf of the fifth respondent while the sixth respondent who appeared in person filed his own reply dated the 10th April, 1996. The Law Firm of Abiodun Adesanya and Co filed a i reply on behalf of the third respondent dated the 22nd April, 1996. The applicant called two witnesses in proof of the applicant’s case while the sixth respondent testified on his own j behalf but called no witnesses. Each of the first, second, [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 314 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. third, fourth, fifth and seventh respondents did not call any a evidence. The facts of this case are that on the revocation of the licence of the Republic Bank Limited, the NDIC became liq- b uidator of the said Republic Bank Limited (hereinafter referred to as the defunct bank). On going through the records of Afro Continental Nigeria Limited account in all the Failed Banks, Adekunle Adewoye Fagbure, a Chartered Account- c ant and a fellow of the Institute, applicant witness 1 (“AW1”) who works with NDIC came across transactions Afro Continental Nigeria Limited, the first respondent had with the defunct bank. The defunct bank opened a facility account on the 14th August, 1990 for the first respondent. A d letter of offer for the facility was sent to the first respondent. Photocopy of the letter dated 14th August, 1990 was tendered and admitted in evidence as exhibits A–A1. Photo- copy of an agreement on the facility was tendered and ad- e mitted in evidence as exhibits B–B4. By document dated the 11th November, 1991 the facility was reduced from N6.5million to N6 million. See photocopy of letter dated 11th November, 1991 tendered and admitted in evidence as exhibits C–C1. Certified true copy of the statement of ac- f count of the first respondent with the defunct bank was tendered and admitted in evidence as exhibits D–D1. The only substantial repayment made by the first respondent was N2.5 million. The defunct bank confirmed the receipt of the g cheque for the said sum of N2.5 million by letter dated the 15th December, 1993. See photocopy of letter dated the 15th December, 1993 tendered and admitted in evidence as exhibit E. There was a response by the first respondent to ex- h hibit E by letter dated the 11th January, 1994. See photocopy of letter dated the 11th January, 1994 tendered and admitted in evidence as exhibit F. According to AW1 in his examination-in-chief, after NDIC i took over the defunct bank it caused letters to be written to all the debtors, the first respondent inclusive, informing the company of the new status of the defunct bank and requesting the first respondent to pay up its indebtedness to the defunct bank. Photocopy of letter to the first j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 315 a respondent was tendered and admitted in evidence as exhibit G. The response of first respondent was tendered and admitted in evidence as exhibit H. NDIC responded to exhibit H b by letter dated the 24th October, 1995 tendered and admitted in evidence as exhibit J. The applicant’s case as testified to by AW1 is that as at the 31st December, 1995, the respondents were owing the defunct bank over N3.6 million. Apart from the first respondent it would appear that the second to c seventh respondents are included as respondents because they are directors of the first respondent. Cross-examined by learned Counsel for the first, second, third, fourth and seventh respondents AW1 disagreed with the suggestion that d exhibit A–A1 has been supplanted by another offer letter tendered and admitted in evidence as exhibit K–K2 the document bears the heading “Re-Renewal of Overdraft Fa- cility”. The witness stated that there is no record of application that the first respondent applied for a waiver of interest e in the defunct bank. He disagreed with the learned S.A.N. Counsel for the first, second, third, fourth and seventh respondents that the defunct bank’s record is unreliable or in- complete. Photocopy of letter dated the 22nd July, 1993 was f tendered and admitted as exhibit L. It is a letter from the first respondent to the defunct bank – attention Mr Olufunso Fabunmi – the witness stated that he has seen the letter and from the records he knows what happened. g Murtala Bamanga applicant witness 2 (“AW2”) a senior manager with the liquidation department of NDIC testified that as at 30th June, 1995 the first respondent was in a debit balance of N3,208.226.04 at 21% interest. The interest from h 1st March, 1994 to 31st March, 1994 was put as N776,700.67 and the figure represents the accumulated interest charged at 21% on the balance of N2,431,525.37 from 1st March, 1994 to 30th June, 1995 when the defunct bank i was not in operation. At the conclusion of the applicant’s case, the sixth respondent Dr Arthur Nylander testified on his own behalf. A legal practitioner and Senior Advocate of Nigeria, the sixth re- j spondent led evidence on how he became involved with the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 316 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. first respondent. The sixth respondent stated that the second a respondent Mr Gaon is the owner and Chairman of the first respondent and he became the legal adviser of the second respondent in 1969 and on the incorporation of the first re- b spondent, the second respondent invited him to the Board of first respondent and in 1983 after he ceased to be the legal adviser of the second respondent, he resigned his directorship of first respondent. The sixth respondent stated that he gave his letter of resignation personally to the second re- c spondent who accepted it on behalf of the first respondent and since November, 1983 he has not been sent nor did he receive notices or minutes of the board meetings of the first respondent. He has not participated in any deliberations or d resolutions of the first respondent and he has not received any directors fees. Commenting on exhibits M–M1 and N minutes of the extra-ordinary meeting held on 23rd October, 1990 and minutes of the meeting of the Board of Directors e of the first respondent respectively, the sixth respondent stated that he did not attend any such board meetings either on 23rd October, 1990 or on the unspecified date in exhibit N or on any date at all. f With regard to exhibits F, H and L in which his name appeared conspicuously at the foot of the document as one of the directors of first respondent, the sixth respondent stated that he does not know when the letter headed papers were printed but on the respective dates when the letters were g written, he was not a director of first respondent and he knows nothing of the contents thereof. Photocopy of letter he sent to NDIC when he got to know about this proceedings was tendered and admitted in evidence as exhibit P. h The sixth respondent stated that he caused a search of the first respondent’s file in the company’s Registry in Abuja to be made, and found that the last form C07 in the file was dated 2nd January, 1979 and his name is on the form. No i other form C07 after that date was in the Company’s Regis- try. The sixth respondent stated that he does not know anything about these transactions culminating in this suit, he had no j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 317 a dealings with the defunct bank, he had not misappropriated any sum or sums borrowed from the defunct bank, at all times material to this proceedings, he is not a director of first b respondent and he has never acted as such. The sixth respondent stated that he is not indebted to NDIC or to the defunct bank or at all. At the conclusion of the evidence of sixth respondent, c learned Counsel for the first, second, third, fourth and seventh respondents, the sixth respondent, learned Counsel for the applicant and learned Counsel for the fifth respondent addressed in that order. d I have carefully considered the evidence proffered by the applicant, the evidence of the sixth respondent and the addresses, the beauty of trial by pleadings is that it affords the parties an advance knowledge of the case they are coming to e meet in the court or in this case, the tribunal. Learned Counsel on both sides then braced themselves up to meet such cases. The essence of pleadings is to compel the parties to define accurately and precisely the issues upon f which the case is to be contested, to avoid element of surprise by either party and not to adduce evidence which goes outside the facts pleaded. See on this the cases of:– (i) Total Nigeria Ltd v. Nwako and another (1978) 5 g S.C. 1; (ii) George v. Dominion Flour Mills Ltd (1963) 1 ALLNLR 71; h (iii) Emegokwue v. Okadigbo (1973) 4 S.C. 113; (iv) Orizu v. Anyaegbunam (1978) 5 S.C. 21 all referred to in the case of Ugbodume and others v. Rev. Moses Abiegbe and others (1991) 8 N.W.L.R. (Part 209) i 261. It follows from what has been stated above that issues are tried on the parties’ pleadings. Parties are consequently bound by their pleadings. Evidence on a matter not pleaded j goes to no issue. See on this the cases of:– [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 318 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(i) Federal Housing Authority v. Sommer (1986) 1 a N.W.L.R. (Part 17) 533; (ii) Akpapuna v. Nzeka (1983) 2 S.C.N.L.R. 1; (iii) Laguro v. Toku (1992) 2 N.W.L.R. (Part 223) 278 all b referred to in the case of Alfred Nwanguma and another v. Akor Ikyaande and others (1992) 8 N.W.L.R. (Part 258) 192. c Still on pleadings, failure to give evidence in support of averments in pleadings means that the averments have been abandoned. See on this:– (i) Union Dominion Corporation (Nigeria) Ltd v. d Ladipo (1971) 1 NMLR 81; (ii) Balogun v. Amubikanhun (1985) 3 N.W.L.R. (Part 11) 27; (iii) Omoboriowo and another v. Ajasin (1984) 1 e S.C.N.L.R. 108 or (1984) 1 S.C. 206. All referred to in the case of Elukpo and Sons Ltd v. Federal Housing Authority (1991) 3 N.W.L.R. (Part 179) 322 at 334 f E–H. In the reply, the first, second, third, fourth and seventh respondents have not denied the transaction of the overdraft facility of N6.5 million which was reduced to N6 million. What they pleaded was that on payment of N2.5 million g there was a waiver of the balance. On this pleading the learned S.A.N. Counsel for the first, second, third, fourth and seventh respondents stated as follows in his address:– h “We did not call any evidence in support of the waiver. The effect in law is that we are deemed to have abandoned that defence.” On the pleading, particularly paragraphs 1 and 2 of the reply, Learned Counsel for the applicant in his address gave i his interpretation to the two paragraphs as follows:– “We owed you, we paid some amount and we entered an agreement to waive whatever is owed – that was the pleading of the first respondent and that continued to be their stand until the conclusion of the case.” j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 319 a The Learned SAN Counsel for the applicant submitted that having abandoned waiver as a defence in his address and having failed to amend his reply, the address which binds his b clients has put in a situation which is in conflict with paragraph 2 of the reply. I am in total agreement with this submission and on how the picture looks as painted by Learned Counsel for the applicant after the address of c Learned Counsel for the first, second, third, fourth and seventh respondents namely – that the first respondent owed the applicant, that first respondent paid N2.5 million, that there was no waiver of whatever remain. d The position is that while the pleading talks of a waiver, the address which binds the first respondent stated that there was no waiver, the pleading was not amended to be in accord with the address, however the legal implication of fail- e ure to lead evidence in line with the pleading on waiver is that the paragraphs on waiver are deemed to have been abandoned. With that abandonment there is no identifiable defence f in the pleading with regard to the granting of the N6 million overdraft facility less N2.5 million paid by first respondent and acknowledged by the defunct bank as having been paid. Simple arithmetical calculation will put the amount g outstanding, that is, the balance at N3.5 million minus interest. Learned Counsel for the applicant had submitted that if at the pleading stage the Court discovers that there is no de- h fence, it is the duty of the court to give judgment for the plaintiff – referred to the case of Adimora v. Ajufo (1988) 3 N.W.L.R. (Part 80) 1 at 11 and 12 S.C. and submitted further that at the close of pleading if the defence of waiver was i not pleaded the facts would have been that the first respondent was given N6 million overdraft facility out of which it paid N2.5 million. On the authority of Adimora v. Ajufo (supra) the tribunal would have been right to give the applicant j judgment for the balance. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 320 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

In his address, Learned Counsel for the first, second, third, a fourth and seventh respondents formulated some issues for determination one of which is whether the claim even if proven can be enforced in view of the moneylenders Law Cap b 85 Laws of Lagos State and in view of the unchallenged and uncontradicted evidence that the defunct bank ceased to be a banker from 1st July, 1995. Before I consider the substance of the submissions of the c Learned Counsel for the first, second, third, fourth and seventh respondents on this issue, it might be necessary to first of all consider the submissions of Learned Counsel for the applicant on the issue. d Learned Counsel for the applicant had submitted in his address that there were criticism levelled by the defence against the computation of interest, there was a suggestion that the defunct bank degenerated into an unenviable posi- e tion of an unlicensed moneylender, plausible as these submissions looked, the basic inevitable question which this tribunal must direct to the respondents is simple – whether this talk of the company being dead or unlicensed moneylender were ever reflected in the respondents pleading and if they f were not then they were clearly irrelevant and inadmissible – referred to the case of:– “(i) Overseas Construction Ltd v. Creek Enterprises Ltd (1988) 3 N.W.L.R. (Part 13) 407 at 414; g (ii) Okagbue v. Romaine (1982) All NLR 111 at 121, 122, 123 and submitted that if the pleadings should bind the parties, any question put by the defendant outside the payment of N2.5 million as the full and final discharge of their total in- h debtedness is irrelevant as it is not consistent with the pleading – referred to the case of Dina v. New Nigeria Newspapers Ltd (1986) 2 N.W.L.R. (Part 22) 353 at 364.” Learned Counsel for the first, second, third, fourth and seventh respondents after abandoning the issue of waiver of the i balance submitted that even if respondents did not raise any defence the plaintiff is still obliged to prove its case. Earlier on in this ruling I have dealt with the purpose of pleadings and it is that parties are bound by their pleadings, the raising j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 321 a of issues on matters not pleaded are inadmissible and to allow such is to spring surprise on the opposite party. (See Adimora v. Ajufo (supra) at page 14). b (ii) Ishola Dina v. New Nigerian Newspapers Ltd (supra). It is trite that a court should not enforce an illegal contract even if the respondent did not raise any defence. In the case of Chief Harold Sodipo v. Lemminkainen OY and another c (1985) 2 N.W.L.R. (Part 8) 547 at 557 Anagolu, JSC puts it thus:– “No court, it has been said by Kennedy, J in George v. Royal Ex- change Assurance Corporation (1990) 2 Q.B. 214 at 220, ought to d enforce an illegal contract or allow itself to be made the instrument of enforcing obligations alleged to arise out of a contract or transaction which is illegal, if the illegality is duly brought to the notice of the court, and if the person invoking the aid of the court is himself implicated in the illegality. It mattered not whether the defen- e dant pleaded the illegality or not. If the evidence adduced by the plaintiff proved the illegality, the court ought not to assist him. Bairamain, FJ, supported this statement in George and others v. Dominion Flour Mills Ltd (1963) 1 All NLR 71 at 74 and gave the reason why it should be so:– f ‘for the courts administer the law of the land and will not help a plaintiff who breaks it.’” Now, where the illegality of the contract although not pleaded, is disclosed in the evidence, it is the duty of the g court to take objection. However, “where a contract is not ex facie illegal and the question of illegality depends on the surrounding circumstances, then as a general rule the court will not entertain the question of its illegality unless it is h raised in the pleadings, in such circumstances, evidence adduced in support of the unpleaded illegality clearly goes to no issue”. (See case of Okagbue and others v. Romaine (1982) 5 S.C. 133 at 156 per Idigbe, JSC of blessed mem- i ory). In the case of Itansehinwa v. Ikueduyi (1991) 3 N.W.L.R. (Part 179) 278 at 288A–B it was stated as follows:– “There is no merit in the second issue canvassed. Appellant’s j Counsel has stated that the lower court did not consider the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 322 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Limitation Laws of Ondo State though it was raised in the defen- a dant’s written address and that this omission has occasioned a miscarriage of justice. Section 6(2) of the Law relied on provides that:– b ‘No action shall be brought by any other person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person.’ c The first objection to the applicability of the statute sought to be relied upon is that it was not pleaded by the appellant. It is trite law that a party cannot rely on a statute which he has not pleaded vide Olive v. Obodo (1958) 3 FS.C. 84, d (1958) S.C.N.L.R. 298. Famayinwa v. Folawiyo (1972) 5 S.C. 112. Lana v. University of Ibadan (1987) 4 N.W.L.R. (Part 64) 245 (260). The Moneylenders Law Cap 85 Laws of Lagos State, 1973 e and the illegality of the transaction with particulars were not pleaded. Learned Counsel cannot raise them in his address. The questions that arise are: these issues apparent in the processes and papers before the tribunal, are there circumstances from which it could readily be gathered that the f transaction was illegal? It is in evidence that as at the time the transaction between the defunct bank and the first respondent took place in 1990, the licence of the defunct bank had not been revoked, the g licence was withdrawn on the 30th June, 1995. As at 1990, the defunct bank was a bank licensed under the Banks and other Financial Institutions Decree otherwise known as De- cree No. 25 of 1991. See section 61 of Decree No. 25 of h 1991 for the definition of bank with a small “b” and sections 2 and 12 of the said Decree No. 25 of 1991. The defunct bank was licensed to carry on banking business which includes the provision of finance. On the face of it there is i nothing illegal on the transaction of granting overdraft facility to the first respondent. It was a normal banking transaction. See definition of banking business in section 61 of De- cree No. 25 of 1991. No evidence was led on the illegality of the transaction. So ex facie there is nothing before me to j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 323 a make me suo motu raise the issue of illegality. The case cited by learned Counsel for the first, second, third, fourth and seventh respondents do not support his contention. Tobi, b JCA at page 715–716 G–A in the case of Rivway Lines Ltd v. Rhein Mas Und See and another (1993) 7 N.W.L.R. (Part 308) 692 puts the position thus:– Before a trial Judge can terminate an action in limine on c grounds of illegality of a contract or transaction, the basis for the illegality must be clear, tangible and unequivocal on the face of the pleadings. Where the issue of illegality is ob- scure or peripheral, a court of law cannot jump to the con- d clusion that the action is founded on illegality and therefore unenforceable, without going into the merits of the matter. Where the issue of illegality is not obvious to the ordinary legal mind, who examines the statement of claim on its face e value, a court of law should not terminate the proceedings without calling for evidence on the part of the defendant. The state of the law is that the defence of illegality of a contract or transaction must be specifically pleaded by a defen- f dant unless such illegality appears ex facie on the statement of claim. In the above case, it was held that the statement of claim ex facie is not illegal and that the defence should be allowed to g file its defence where the Exchange Control Act, 1962 may be pleaded. The case of United Nigeria Mortgage and another v. Na- h thaniel Onikeku (1996) 2 N.W.L.R. (Part 428) 56 was a case instituted by a moneylender who did not comply with sections 13 and 21 of the Moneylenders Law of Lagos State. The issue in this action is not moneylender’s action but that i of a simple contract founded on money advanced on overdraft facility. The case of Ndiwe v. Shingleton and Company Ltd (1993) 2 N.W.L.R. (Part 274) 242 was a case in which ex facie j there was nothing illegal in the pleadings even though the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 324 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. transaction involves paying for goods through a bill of ex- a change. Exhibits A–A1 and K–K2 the offer letters for the facility and its acceptance by the first respondent contains the rate of b interest. The parties are bound by the terms of their agreement. See case of Mercantile Bank v. Adalma (1990) 5 N.W.L.R. (Part 153) 747. Exhibits D–D1 statement of account reflects the state of the account while exhibit O gives a c break down of the account. According to AW2 the difference in the two figures in Exhibits D–D1 and O for 31st March, 1994 was due to the fact that the defunct bank was not in operation, there was no print out between 31st March, 1994 the last date on exhibits D–D1 and 30th June, 1995 on d exhibit O and so the figure of N776,700.67 interest for March, 1994 was printed on 30th June, 1995 and back dated from 31st March, 1994 and also the calculation in exhibits D–D1 was by computer while that of exhibit O was manu- e ally done and the difference of about N2,000 can be attributed to rounding up of figures but the computer is more authentic because it is N2,000 less. It is trite as rightly submitted by learned Counsel for the f first, second, third, fourth and seventh respondents that where there are conflicts in the evidence given by a party in a civil suit on a particular issue the court cannot choose between the two. The conflict must however, be very fundamental and it should go to the root of the matter. In this case, g the first respondent has not denied obtaining an overdraft facility of N6 million out of which it repaid N2.5 million in December, 1993 since then nothing has been paid. First respondent has not stated how much it is owing from its own h calculation. Definitely evidence on the amount outstanding cannot be ignored in its entirety simply because there is a difference of N2,000 between the figure in the statement of account and the manual breakdown of the statement of ac- i count. In such a situation the lesser figure should be preferred. Apart from this slight difference in calculation which in my humble view is not very material, I hold that the applicant has established its claim against the first respondent and is entitled to judgment. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 325 a The second, third, fourth, fifth, sixth and seventh respondents have been joined as respondents because they are directors of the first respondent. Apart from the sixth respon- b dent who testified that he ceased to be a director in 1983 when he tendered his resignation, all the other respondents second, third, fourth, fifth and seventh respondents did not contest the fact that they are directors of the first respondent. c Notwithstanding the evidence of the sixth respondent the issue I have to decide with regard to the directors is whether the mere fact of being a director of a company that is indebted to a failed bank automatically qualifies such a direc- d tor without more as a necessary party to a claim for recovery of the debt from the company. I have observed from a number of cases filed before this zone of the tribunal that directors of companies that are in- e debted to failed banks are joined as respondents in the action for the recovery of such debts and it becomes imminently necessary that a pronouncement be made on this issue based on the arguments proffered and this case has afforded such f an opportunity. Before I embark on that exercise I believe I should consider the case of the sixth respondent who led evidence not so much because the legal issues involved in his own case is different from those of the respondents who led no evidence but because in his own case find- g ings of fact have to be made in respect of the evidence he led. I have earlier on in this ruling stated the facts of the involvement of the sixth respondent as testified to by him. Put simply it is that in 1983, he resigned his directorship of first h respondent, he gave his letter of resignation to the second respondent who accepted it on behalf of the first respondent. Since then he has not been sent nor did he receive notices or minutes of the board meetings of the first respondent and i he has not received any directors fees; he did not attend the extraordinary meeting of 23rd October, 1990 or the meeting of the board on an unspecified date, he does not know anything about the transactions culminating in this suit, he had j no dealings with the defunct bank. He was not asked any [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 326 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. questions on these facts and the applicant led no evidence to a contradict these facts. In the case of Chief Osakwe v. Gover- nor of Imo State and others (1991) 5 N.W.L.R. (Part 191) 318 at 339A it was stated as follows:– b “It is trite that a piece of evidence which is neither challenged nor contradicted will be taken as admitted proof of a fact in issue. See Eze v. The State (1985) 3 N.W.L.R. (Part 13) 429; Akinbiyi v. Anike (1958) W.R.N.L.R. 16.” c In the case of Obi and others v. Ozor (1991) 9 N.W.L.R. (Part 213) 94 at 109E it was stated as follows:– “The respondent testified that he has the authority of the court to represent the Umuohaenyi family. He further testified that his an- d cestors have been in possession of the land in dispute, they were Eme, Jiburu and Nnukwere, Adindu and many others. The witness traced his ancestry to Jiburu branch. Learned Counsel for the respondent cross-examined the respondent exhaustively but not one question was put to him about the capacity in which he has prose- e cuted the action. The law is settled that where evidence given by a party to any proceedings was not challenged by the opposite party who had the opportunity to do so, it is always open to the court seized of the proceedings to act on the unchallenged evidence before it. James Omoreghe v. D.P. Lawani (1990) 3–4 S.C. 108 at 117.” f I want to adopt the above statements as mine in this judgment. The sixth respondent was asked questions under cross- examination but not on all the issues earlier highlighted. I hold that the evidence on those issues remain unchallenged, g uncontradicted and unshaken under cross-examination. On the issue of resignation of the sixth respondent, there is no evidence to contradict or challenge his evidence that he h resigned his directorship of first respondent since 1983. The fact that his name still remains on form CO7 should not be put at the feet of the sixth respondent having sent in his letter of resignation which was accepted, a piece of evidence which remains unchallenged and uncontradicted, it was the i duty of the first respondent to comply with section 292(1), (4) and (5) of the Companies and Allied Matters Decree No. 59 of 1990 otherwise known as CAMA. The section provides as follows:– j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 327 a “292(1) Every company shall keep at its registered office register of its directors and Secretaries. (4) The company shall within the periods respectively men- b tioned in subsection (5) of this section, send to the Commission a return in the prescribed form containing the particulars specified in the register and notification in the prescribed form of any change among its directors or in its secretary or in any of the particulars contained c the register, specifying the date of the change. The periods referred to in subsection (4) of this section shall be the period within which:– (a) the return is to be sent which shall be a period of d 14 days from the date of incorporation of the company; and (b) the notification of a change is to be sent which shall be 14 days from the happening thereof:– e Provided that, in the case of a return containing particulars with respect to any person who is the company’s secretary at the commencement of this Decree, the period shall be 14 days from the commencement of this Decree.” f I am in total agreement with the submissions of the sixth respondent that it is not his duty and I will add the duty of any director to update the record of the company. g I hold that it is not the duty of the sixth respondent or indeed any director for that matter to send the return of any change among the directors or any of the particulars to the Commission at Abuja. Any request that a director should do h that is to put a burden on a director not contemplated by the mandatory provisions of CAMA. Section 292(1), (4) and (5) provides that every company “shall”. The words shall appears in all the subsection, the word connotes a command, it i is not discretionary. It is in evidence that Ajayi and Co is the secretary of the first respondent. The said secretary has not and did not challenge the interpretation the sixth respondent accorded to sec- j tion 292(1), (4) and (5)(a) of CAMA. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 328 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

On these findings of fact alone, the sixth respondent is en- a titled to be held not liable. Along with the other directors the second, third, fourth, fifth and seventh respondents the issue earlier identified for b determination is whether the mere fact of being a director of a company that is indebted to a failed bank automatically qualifies such a director without more as a necessary party to a claim for the recovery of debt from the company? c The submissions of learned Counsel for the first, second, third, fourth and seventh respondents, the learned Counsel for the fifth respondent and the sixth respondent on the issue of joinder could be summarised as follows:– d (i) That Decree No. 18 of 1994 makes no provisions for the joinder of directors. (ii) The mere fact that the section 11(2) of the decree sets out what information the application shall contain, does not authorise a joinder. e (iii) that no evidence was led that second to seventh respondents played any role outside the corporate cloak. (iv) That the conditions set out in section 16(1) of the Decree No. 18 of 1994 have not been met. f (v) That exhibits M–M1, N, C, F, H and L are insufficient to prove that they are directors at the material time. (vi) That section 15(5)(b) of the decree shows that the body corporate is the debtor and not the directors of the corporate body. Section 12 also referred to the body corporate. g (vii) That before section 15(7) can operate it must comply with section 290 of CAMA, the section relates to execution. (viii) That Order 4 Rule 5(1) of the Federal High Court (Civil Procedure) Rules, 1976 concerns a non-joinder and the di- h rectors having been joined, it is a question of misjoinder. In his submissions, learned Counsel for the applicant replied to above points as follows:– (i) That the joinder is proper – referred to Order 4 Rule 5(1) i (supra), section 15(7) of Decree No. 18 of 1994; (ii) That because after judgment has been entered against the company and the assets of the company fail to satisfy the debt completely, at a certain stage, the tribunal has a right to pounce on the directors or assets of the directors to get its j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 329 a funds would put the directors under the description of people who may be likely to be affected by the result of the case – referred to section 3(3)(b)(i) and 3(3)(b)(ii) of De- cree No. 18 of 1994; b (iii) That the company borrowed the sum in 1990 and in 1995 it paid N2.5 million the purpose was to finance working capital but the project has not been disclosed and because the directors are in a fiduciary position to the company, the in- c tention of the directors is open to question. (iv) That there are instances where the court is compelled to pierce the veil or lift the veil and bring the directors to court to find out what has been happening in the company. d (v) That section 506 of CAMA should be considered. It has to be accepted that in leading evidence in proof of the applicant’s case, no scintilla of evidence was given against any of the second, third, fourth, fifth, sixth and seventh re- e spondents in relation to the transactions that led to this suit. Apart from the first respondent, the only other party who should know about the transaction is the secretary of the company but the evidence is that the secretary is a corporate personality – Olaniwun Ajayi and Co. The fifth respondent f whose name is Olaniwun Ajayi in law would be a different juristic person from the company. (See Salomon v. Salomon (1897) A.C. 22 at 42). g The arguments of learned Counsel on the opposite sides boil down to the proper construction to be accorded to the different sections of Decree No. 18 of 1994. In the case of Idehen v. Idehen (1991) 6 N.W.L.R. (Part 198) 382 at 416 D–E the Supreme Court of Nigeria provided the guideline h for the construction as follows:– “In the construction of the provisions of a statute, it has always been relevant to consider the history of the legislation and the mischief it was designed to prevent. This is not an attempt at ignoring i the golden rule that the legislature should betaken to have meant what it actually expressed. Since the real purpose of every interpretation is to discover the intention of the law maker, and this primarily from the words used. Hence, where there is nothing to qualify or modify the words used in the statute they must be con- j strued in their ordinary and natural meaning. However, where this [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 330 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

is at variance with the intention of the law maker as can be gath- a ered from the words used, or leads to manifest absurdity, the language may be varied only to avoid such absurdity and no further.” The intention of the law maker in this Decree No. 18 of b 1994 could be gathered from the explanatory note of the decree which does not form part of the decree but is intended to explain its purport. The intention of the law maker is to recover the debts c owed to a failed bank arising in the ordinary course of business of the banks and which remain outstanding at the date the banks are closed or declared failed banks by the Central Bank of Nigeria; and try offences, created under the decree, d relating to certain financial malpractices in banks. Part II of Decree No. 18 of 1994 makes provision for recovery of debts owed to failed banks while Part III of the said Decree makes provisions for offences and penalties, this part specifically referred to a director and the act that would consti- e tute an offence. Under Part II, the emphasis is on the borrower or debtor who could be anybody, an individual, but if a body corporate which in law consists of the company and the members f who make up the company, two sets of individuals, then the identity of the members who make up the company should be disclosed. See section 11(2)(a), (b), (c) and (d) of Decree No. 18 of 1994. Reading through the sections together i.e. g 11, 12, 13, 15(5)(b) and 15(7) and 16 of Decree No.18 of 1994 one gets a clear picture of the intention of the law maker namely that the borrower is brought before the tribunal, after hearing and judgment given, execution follows; h My humble view is that section 11(2)(a), (b)(ii) (supra) is meant for the sole purpose of execution. This is because if it were otherwise the section should have gone further to state that if the borrower is a director as is the case under Part III i under offences and penalties then this and this should happen. I believe section 11(2)(a) and (b)(ii) should be construed in its ordinary and natural meaning which is a request for the names and addresses of the shareholders, directors etc. and should not be extended beyond its onerous meaning. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 331 a With reference to execution, the last resort is section 15(7) (supra) and this is subject to section 290 of CAMA. The Supreme Court has given judicial interpretation to the b phrase “Subject to” in the case of Esenwosu v. Ngonadi (1992) 3 N.W.L.R. (Part 228) 154 at 173 E–F wherein it was stated as follows:– “As the above provision has made the power of the President of c the Court of Appeal to make rules subject to the provisions of any Act of the National Assembly.” It follows that the learned President’s exercise of those powers is intended to be curtailed and circumscribed by any d relevant Act of the National Assembly. For the phrase “subject to” is a usual provision used to subject or subsume the provisions of a subject statute, be it substantive or adjectival to the provisions of a master enactment. (See on this Lagos e State Development Property Corporation v. Foreign Fi- nance Corp (1987) 1 N.W.L.R. (Part 50) 413 at P. 461; Olu- koya and Sons Ltd v. The Governor of Lagos State v. another (1987) 1 N.W.L.R. (Part 50) 385 at pages 408–409. Aqua Ltd v. Ondo State Sports Council (1989) 4 N.W.L.R. f (Part 91) 622 at page 655). (See also Tukur v. Government of Gongola State (1989) 5 N.W.L.R. (Part 17) 517 at 542 B–C; 565 G–H and 580A). I am in agreement with the construction given by Learned g Counsel for the respondents to section 15(7) (supra) i.e. that it is subject to section 290 of CAMA. To hold the directors liable the applicant should establish the provisions of the sections. This the applicant has failed to do. h With reference to section 506 of CAMA the action herein is not a winding up of a company proceedings. I hold that the provisions are inapplicable to the directors herein. The question I ask is, are the second, third, fourth, fifth, i sixth and seventh respondents necessary parties to this action? It has been held that a person should not be joined as a defendant against whom there is no claim by the plaintiff. The test as to whether or not a person should be joined as a j party to an action is whether the order the plaintiff seeks [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 332 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. from the court affects the interference in the enjoyment of a that other’s legal rights. (See on this the case of Chief Oluji- tan and another v. Deacon Oshatoba and another (1992) 5 N.W.L.R. (Part 241) 326 at 335C–D). Although the second b to seventh respondents are persons who may be likely affected by the result of this case, it is however not in a direct way. It is after some stage, have been passed and it only relates to execution. No evidence was adduced against any of the directors as regards the transactions that led to this suit. c The applicant has no claim against them notwithstanding exhibits C, E, F, H and L which show they are directors. However, they have been joined pursuant to Order 4 Rule 5(1) of the Federal High Court (Civil Procedure) Rules, d 1976. I am in agreement with the submissions of learned Counsel for the fifth respondent that the rule concerns non- joinder as the side note to the rule indicates, however the phrase “who may likely be affected by the result” in the rule e may save the situation. In this case the directors have already been joined. I hold that Order 4 Rule 5(1) (supra) is inapplicable to them. It remains for me to say that the lifting of the veil of incorporation is meant for the purpose of levying execution as prescribed in the decree and not for making f the directors parties to the action. With regard to the directors I want to call in aid Order 4 Rule 5(2) (supra) which provides that the court may at any stage of the proceedings and on such terms as appear to the court to be just, order that g the name or names of any party or parties, whether as plaintiffs or defendants, improperly joined, be struck out. I hold that the second, third, fourth, fifth, sixth and seventh respondents have been improperly joined, the name of each h of them is struck out and the claim against each of them is also struck out. With regard to the first respondent, I hold that the applicant has established its claim. I should therefore enter judgment in favour of the applicant i against the first respondent as per the amount stated in the computer print out which is more authentic than the manu- ally produced account exhibit O for the sum of N3,208,226.04 as at 31st March, 1994 plus interest at the rate of 21% per annum from 1st April, 1994 till judgment j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Ltd 333 a thereafter at 6% per annum till the final liquidation of the judgment debt. I accordingly enter judgment in favour of the applicant b against the first respondent in the sum of N3,208,226.04 plus interest at the rate of 21% per annum from 1st April, 1994, till judgment thereafter at 6% per annum until final liquidation of the judgment debt. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

334 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Federal Republic of Nigeria v. Mr Patrick Ugwu Eze and Others (No. 1)

FAILED BANKS TRIBUNAL, ZONE V, LAGOS b AUGIE J

Date of Judgment: 16 JULY 1996 Suit No.: FBFMT/L/IC/96

Banking – Failed Banks Tribunal – Accomplices seeking c Bail – Whether required to deposit half of amount involved in the offence – Section 26(2)(a) Failed Banks Decree No. 18 of 1994 (as amended) – Application for Bail – Accused willing to surrender assets as condition for Bail – Whether d satisfies section 26(2)(a) Failed Banks Decree No. 18 of 1994 (as amended) – Bail – Inapplicability of 1979 Consti- tutional provision thereto – Conditions for Bail – Agreement for repayment with the bank – Whether qualifies as condi- e tion for bail under section 26 Failed Banks Decree No. 18 of 1994 (as amended) – Distinction whether offence charged punishable with option of fine or not – When relevant – Sec- tion 26(1), (2) Failed Banks Decree No. 18 of 1994 (as f amended – Power of Tribunal to grant Bail – Scope, section 26(1), (2) Failed Banks Decree No. 18 of 1994 (as amended) Interpretation of Statutes – Section 26(1), (2) Failed Banks Decree No. 18 of 1994 (as amended) – How interpreted – g Scope of Words and Phrases – “Subject to subsection 2 of this section”, “Notwithstanding subsection (1) of this section”, h “Deposits half the amount in the Tribunal as security for Bail” under section 26(1), (2) Failed Banks Decree No. 18 of 1994 (as amended) – Judicial interpretation of Facts i Before the Zone V of the Failed Banks (Recovery of Debts) and Financial Malpractices in Bank Tribunal, sitting at La- gos, the five accused persons were arraigned on a 78 counts charge pursuant to Failed Banks Decree No. 18 of 1994 (as j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Federal Republic of Nigeria v. Mr Patrick Ugwu Eze 335 a amended). After a plea of not guilty to each of the respective counts, learned Counsel made oral applications for bail on their behalf. b It was submitted on behalf of the accused persons; (i) That first accused was prepared to comply with the conditions for bail by surrendering all his assets by way of property and vehicles valued at N24,000,000 (Twenty-Four Million c Naira) far above what he is alleged to be owing; (ii) That the second accused entered into a legal mortgage in respect of his own personal properties and all assets valued at N60,000,00 (Sixty Million Naira) are in the possession of the Bank; (iii) That since the charges against the accused d persons are laid under other laws or enactments as specified in section 3(1) of the Failed Banks Decree No. 18 of 1994 (as amended) and not under the Decree, considerations for bail must be governed by the relevant provisions of other e enactments, i.e. section 32 of the 1979 Constitution and not by section 26 of the Decree. Section 3(1), (2) of the Decree reads:– “3(1) The Tribunal shall have power to:– f (a) recover, in accordance with the provisions of this decree, the debts owed to a failed Bank arising in the ordinary course of business and which remain outstanding as at the date the Bank is closed or declared g a Failed Bank by the Central Bank of Nigeria; (b) try the offences specified in Part III of this Decree; (c) try the offences specified in the Banks and Other Fi- nancial Institutions Decree, 1991 (BOFID) and the NDIC Decree, 1988; and h (d) try other offences relating to the business or operation of a bank under any enactment.” “3(2) The Tribunal shall exercise exclusive jurisdiction over all ancillary matters, including remand, bail and any other i preliminary issues connected with an offence or hearing over which the Tribunal has jurisdiction.” Section 26(1), (2) of the Decree reads:– “26(1) Subject to subsection (2) of this section, the tribunal j shall not grant bail to a person charged with an offence [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

336 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

punishable with a term of imprisonment without the op- a 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 in- b volved in the offence, if the person charged with the offence:– (a) deposits half the amount in the tribunal as security for the bail; (b) provides surety for the balance of the amount; and c (c) hands over his passport to the tribunal for the duration of the bail.”

Held – d 1. The provision of section 26(2) Failed Banks Decree No. 18 of 1994 (as amended) is quite definite. It empowers the Tribunal to grant bail for an amount equal to that involved in the offence, if the person charged with the of- e fence deposits half of the amount in the Tribunal as security for the bail, provides surety for the balance of the amount and hands over his passport to the Tribunal for the duration of the bail. f 2. The words “Deposits half the amount in the Tribunal as security for bail” in section 26(2)(a) Failed Banks De- cree No. 18 of 1994 (as amended) is unambiguous and effect must be given to it. g By virtue of section 26(1) and (2) Failed Banks Decree No. 18 of 1994 (as amended) the same conditions for bail would apply whether or not the offence charged is punishable with an option of fine or without an option of h fine. The distinction only comes into play when considering whether or not to grant bail to an accused person. Persons charged as accomplices to an offence are involved in the offence. Consequently, they are also re- i quired to pay half the amount equal to that involved in the offence when granted bail like the principal offend- ers by virtue of section 26(2) Failed Banks Decree No. 18 of 1994 (as amended). j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Federal Republic of Nigeria v. Mr Patrick Ugwu Eze 337 a The operative words in section 26(2) of the Decree is the word “involved” which means to include or contain as a necessary part, to have an effect on. b Per curiam “ . . . any agreement for repayment with the Bank does not qualify as compliance with the conditions of bail stated under section 26 Failed Banks Decree No. 18 of 1994. I am of c the view, that any repayment proposals is between the accused person and the bank. Now that the accused person have been arraigned before the tribunal, it is a different ball game altogether. If they are granted bail, each of them must deposit half the amount involved in the offence in the tribu- d nal as security for the bail and provide surety for the balance of the amount to be released on bail.” Bail granted. e Cases referred to in the judgment Nigerian Attorney-General of Anambra State v. Attorney-General of the Federation (1993) 6 N.W.L.R. (Part 302) 692 f Ayoka v. Bello (1992) 1 N.W.L.R. (Part 218) 380 Comm for Local Courts v. Ezemuokwe (1991) 3 N.W.L.R. (Part 181) 615 F.R.N. v. Abubakar (1997) 1 F.B.T.L.R. 129 g Labiyi v. Anretiola (1992) 8 N.W.L.R. (Part 258) 139

Nigerian statute referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malprac- h tices in Banks Decree No. 18 of 1994 (as amended), sections 3(1), (2) and 26(1), (2)

Books referred to in the judgment i Collin’s Dictionary and Thesaurus

Counsel For the Prosecution: Idris Abubakar j For the first accused: Chief Shola Rhodes (SAN) [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

338 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a For the second accused: Phillips Umeh For the third and fifth accused: Prof. Nwabueze (SAN) For the fourth accused: Ifeanyi Ohuruzo b Judgment AUGIE J: All the 5 accused persons were arraigned before this Tribunal on a 78 count charge pursuant to the Failed Banks (Recovery of Debts) and Financial Malpractices in c Banks Decree No. 18 of 1994 (hereafter referred to as “the decree”). After a plea of not guilty to each of the respective counts by the 5 accused persons, learned defence counsel made oral application for bail on their behalf. d Chief Shola Rhodes for the first accused person buttressed his application for bail under section 26(1) and (2) Failed Banks Decree No. 18 of 1994. That section of the decree provides as follows:– e “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 option of fine under this decree. f 26(2) Notwithstanding, subsection (1) of this section, the Tri- bunal 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 security g 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.” h Chief Rhodes informed the tribunal that the first accused was ready to comply with the provisions of that section by surrendering all his assets by way of property and vehicles valued at N24 million which he said is over and above i what is provided for by the Decree because in a letter dated 10th February, 1995, A.C.B. indicated that the first accused owed the bank N21,941,589.94. He said the first accused paid N2.1 million in February, 1996, which in his view j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Patrick Ugwu Eze 339 a showed that the first accused was willing to defray the amount inflated by the prosecution and the bank. He then urged the tribunal to accept these as security for b the bail because despite the “alarmist 78 count charge” the first accused is entitled to bail. Mr Phillip Umeh made more or less the same application for bail on behalf of the second accused. He submitted that c the second accused was not only ready with the condition for bail under section 26 of the Decree but had already complied with those conditions. Mr Umeh explained to the tribunal that the entire debt owed by the second accused was d restructured and taken over by a Company in which the second accused is a major shareholder, and that the Com- pany entered into a debenture deed over the second accused person’s factory premises and goods including raw materials to A.C.B. to secure the debt. e Furthermore, that the second accused entered into a legal mortgage in respect of his own personal properties registered as 2nd February, 1994 and 4th April, 1994, in the lands registry Enugu, and all assets valued at N60 Million are in f the possession of the bank. Mr Idris Abubakar, learned Counsel for the prosecution, replied that he had no objection to the five accused persons g being granted bail but that the bail must be granted in compliance with the conditions for bail under section 26 of the Decree which he argued permits the tribunal to grant bail but at the same time fetters the discretion to do so. He submitted that the surrender of property to the bank does not form part h of the conditions for bail, under the decree. He said the bank did not bring the case before the tribunal and that the matter before the tribunal is between the Federal Republic of Nigeria and the accused persons, so any ar- i rangements between the accused persons and the bank will have no bearing on the case. Mr Abubakar argued that the first accused did not even state that he deposited an amount to the bank but rather he pledged property, so that even if the j interpretation will be stretched to cover the bank, he will still [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 340 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. be seen not to have complied with the requirement that he a must deposit half the amount in the tribunal as security for the bail. He further submitted that the debt mentioned by the first b and second accused persons was a transaction that was ab initio unlawful and which resulted in the trial of the accused persons, therefore any process of repayment would not obliterate the initial crime. He therefore urged the tribunal to c hold that the request of the first and second accused persons do not qualify as compliance with the conditions for bail stated under section 26(2)(a) of the Decree. Chief Rhodes in further reply submitted that the law does d not say that the amount should be brought to the tribunal. To my mind, the provisions of section 26(2) of the Decree is quite definite. It empowers the tribunal to grant bail for the amount equal to that involved in the offence, if the per- e son charged with the offence deposits half the amount in the tribunal as security for the bail, provides surety for the balance of the amount and hands over his passport to the tribunal for the duration of the bail. There is no ambiguity to the f words:– “deposits half the amount in the tribunal as security for the bail.” The general rule for construing a statute is that where the words of a statute are clear, the Court shall give effect to g their literal meaning. (See Ayoka v. Bello (1992) 1 N.W.L.R. (Part 218) 380). The literal meaning of section 26(1) and (2) of the Decree is quite clear and unequivocal. Any person charged with an offence punishable with a term of imprisonment without the option of fine may be released on bail at h the discretion of the tribunal, if he deposits half the amount involved in the offence in the Tribunal as security for the bail and provides surety for the balance of the amount. i I therefore, agree with the learned Counsel for the prosecution that any agreement for repayment with the Bank does not qualify as compliance with the conditions of bail stated under section 26 of Decree No. 18 of 1994. I am of the view, that any repayment proposals is between the accused j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Patrick Ugwu Eze 341 a persons and the bank. Now that the accused persons have been arraigned before the tribunal, it is a different ball game altogether. If they are granted bail, each of them must de- b posit half the amount involved in the offence in the tribunal as security for the bail and provide surety for the balance of the amount to be released on bail. Now, Prof. Nwabueze in his own application as counsel c for the third and fifth accused persons added another dimension to the arguments on the issue of bail. He referred the tribunal to sections 25 and 26 of the Decree which speaks of “offences under this Decree” and submitted that this means offences created by or under the decree. He said going by d section 19 of the Decree, these offences are only three and are therefore the only offences to which the Tribunal’s power of arrest or power of bail are limited. He therefore, submitted that sections 25 and 26 of the Decree do not apply e to any of the offences as none of the offences with which all the accused persons are charged are offences under the De- cree. He further argued that section 3(1) of the Decree creates no offences at all but merely spells out the jurisdiction f of the tribunal and the offences referred to in section 3(1)(c) and (d) are therefore not offences under the Decree but under the laws or enactments referred to. It is Prof. Nwabueze’s contention that the power to grant g bail in respect of those offences specified in section 3(1) of the Decree must be governed not by section 26 of the Decree but by the relevant provisions of the other enactments and that the over-riding provisions in this regard is section 32 of the 1979 Constitution. He said none of the accused persons h is charged with an offence under the Decree, therefore the relevant law governing bail in the circumstances is section 32 of the 1979 Constitution. i Prof. Nwabueze concluded by pointing out that the accused persons have been in detention for 6 months and argued that it cannot be the intention of the Decree to keep some one charged with an offence under the Criminal Code in detention for such a long time. He said the liberty of an j individual under the Decree has been seriously eroded and [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 342 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. this cannot be supported by the clear words used in the De- a cree. Mr Umeh, learned Counsel for the second accused person, supported the arguments of Prof. Nwabueze and submitted b further that he cannot see why in a unitary legal system operating in Nigeria, an accused person before a Tribunal should be disadvantaged while his application for bail in a regular Court would have been handled in a more liberal c manner. He submitted that the spirit of the 1979 Constitution is well encapsulated in section 32(4) on the issue of bail, and the detention of the accused persons for 6 months cannot be the intention of the Constitution. He said the focus of the d world has been on Nigeria on the issue of human rights and argued that refusal of bail in the circumstances will amount to punishment for the accused persons. In reply, Mr Idris Abubakar submitted that to agree with e Prof. Nwabueze would be to read into the Decree what is not contained therein. He argued that section 3(1) when read together with section 3(2) of the Decree operates to bring the offences in the other enactments under the umbrella of sec- f tions 25 and 26 of the Decree. He therefore contended that there was no need to go outside the Decree as suggested by Prof. Nwabueze. To start with, section 3(1) and (2) of the Decree which g provides for the powers of the Tribunal reads as follows:– 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 ordi- h nary course of business and which remain outstanding as at the date the Bank is closed or declared a Failed Bank by the Central Bank of Nigeria; (b) try the offences specified in part III of this Decree; i (c) try the offences specified in the Banks and Other Finan- cial Institutions Decree, 1991 (BOFID) and the N.D.I.C. Decree, 1988; and (d) try other offences relating to the business or operation of a bank under any enactments; j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Patrick Ugwu Eze 343 a 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.” b I agree with Prof. Nwabueze that section 3(1) of the Decree spells out the jurisdiction of the tribunal. A court is said to have jurisdiction with regard to a suit or proceeding, when it c has power to hear and determine it or exercise any judicial power therein. (See Comm for Local Govt. v. Ezemuokwe (1991) 3 N.W.L.R. (Part 181) 615). In other words, section 3(1) of the Decree vests the tribunal with jurisdiction to try the offences specified in Part III of the Decree, the offences d specified in BOFID, the offences specified in the NDIC De- cree and any other offences relating to the business or operation of a bank under any enactment. None of these offences are superior or inferior to the other. This was made clear by e the Special Appeal Tribunal in the recent case of the Federal Republic of Nigeria v. Mallam S.B. Abubakar (Appeal No. SAT/MO/240/95), (1997) 1 F.B.T.L.R. 129 wherein the Chairman, Honourable Justice A.G.O. AGBAJE, stated at page 35:– f “. . . the Lower tribunal in our judgment misdirected itself as to the gravity of the offences in this case. It said that the defendant was not charged under the Core Offences triable by the lower Tribunal under the Decree. The offences under section 3(1)(b) and (c) of the g Decree are not called Core offences. Nor are the offences under section 3(1)(d) of the Decree under which the defendant was tried and convicted said to be subordinate to those in section 3(1)(b) and (c).” Be that as it may, section 3(2) of the Decree goes further to h vest the tribunal with 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. Prof Nwabueze has argued that the i applicable provisions for bail is section 32 of the 1979 Con- stitution and not section 26 of the Decree, but this position is not tenable under the law. The tribunal is vested with exclusive jurisdiction over bail in a matter before it. Section 26 of the Decree makes provisions for the conditions to be com- j plied with before an accused person may be admitted to bail, [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 344 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. and it is trite law that the provisions of the Decree, including a section 26 of the Decree prevails over any constitutional provisions. See section 28 of the Decree. This position of the law has been upheld by the Supreme b Court. See Labiyi v. Anretiola (1992) 8 N.W.L.R. (Part 258) 139 and Attorney-General of Anambra State v. Attorney- General of the Federation (1993) 6 N.W.L.R. (Part 302) 692 at 714 where it was stated:– c “Under our present condition, Decrees are the Supreme Laws in Nigeria and all other Laws including the current Constitution are inferior to the Decrees.” (See also Federal Republic of Nigeria v. Mallam S.B. d Abubakar (supra)). Where the Special Appeal Tribunal affirmed the supremacy of the provisions of Decree No. 18 of 1994, over any constitutional provisions or any other law inconsistent with the Decree. I therefore agree with learned Counsel for the Prosecution, e that there is no need to go outside the Decree to the Consti- tution or any other enactment on the issue of bail for an accused person before the Tribunal. The Tribunal has inherent powers to grant bail to any per- f son charged with an offence punishable with the option of fine, and may, in its discretion grant bail to any person charged with an offence punishable without the option of fine. g This now brings us to the submissions of Mr Ifeanyi Ohu- ruzo on behalf of the fourth accused person. He argued that the charge has not shown whether the fourth accused stole any money and that it also did not show that the fourth ac- h cused was owing the bank. He said the fourth accused was merely charged with corrupt enrichment and that section 494 of the Criminal Code and section 18(2) of BOFID makes the offence punishable with an option of fine which gives the i Tribunal abundant discretion to grant the fourth accused bail. He therefore urged the Tribunal to grant the fourth accused person bail as he has been in detention for 6 months just because he is alleged to have received N15,000 bribe from the first accused. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Patrick Ugwu Eze 345 a Learned Counsel for the Prosecution replied that the fourth accused is also charged with another offence and that in any case, it is immaterial whether the offence charged is punish- b able with an option or without an option of fine. This is true, the same conditions for bail apply whether or not the offence charged is punishable with an option of fine or without an option of fine. The distinction only comes into play when considering whether or not to grant bail to an accused c person. This is evident from the opening paragraphs of section 26(1) and (2) of the Decree. Subsection (1) of section 26 of the Decree opens with the words “subject to subsection (2) of this section”, while that d of subsection (2) of the same section opens with the Words “Notwithstanding subsection (1) of this section”. What this means, is that the Tribunal will grant bail to any person charged with an offence punishable with the option of fine e but may or may not grant bail to any person charged with an offence punishable without the option of fine. In the latter situation the decision to grant or not grant bail is at the discretion of the Tribunal. f Now section 26(2) of the Decree speaks of bail for “an amount equal to that involved in the offence”. Prof. Nwabu- eze also argued that it will be ridiculous to read into the section, that accomplices who allegedly aided and abetted an offence should also pay half the amount involved as the g principal offender, since this would over rich the bank. Sec- tion 26(2) of the Decree makes no distinction between a principal offender and another person who aids, abets, pro- cures or conspires with any other person to commit any of h the offences under the Decree but section 23(4) of the De- cree does. It provides that such persons are liable on conviction to the same punishment as prescribed for that offence under the Decree. i It therefore follows that since accomplices form an integral part of an offence, they are involved in the offence and are also required to pay half the amount when granted bail for an amount equal to the sum involved in the offence. To my mind, the operative word here is “Involved”. The word “in- j volved” is defined in Collin’s Dictionary and Thesaurus in [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 346 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. one volume to mean “to include or contain as a necessary a part. (2) to have an effect on.” I have considered the applications for bail made by the De- fence Counsel on behalf of the fifth accused persons. I have b taken into consideration the fact that they have been in detention without trial for over 6 months. Consequently, I do hereby exercise my discretion in their favour and grant them bail. The first accused person is granted bail in the sum of c N45,923,456.80; the second accused person is granted bail in the sum of N16,779,350; the third accused person is granted bail in the sum of N29,266,806; the fourth accused person is granted bail in the sum of N33,436,319. d The fifth accused is also granted bail in the sum of N12,487,137 in the following conditions:– (1) The first accused should deposit N22,961,728.40 with the tribunal; the second accused should deposit N8,389,675 with the tribunal; the third accused should e deposit N14,633,403 with the tribunal; the fourth accused should deposit N16,718,159.50 with the tribunal; and the fifth accused should deposit N6,243,568.50 with the tribunal. f (2) The first accused should provide two sureties for the remaining N22,961,728.40 i.e. two sureties for N11,480,864.20 each; the second accused should provide two sureties for the remaining N8,389,675 i.e. g two sureties for N4,194,837.50 each; the third accused should provide two sureties for the remaining N14,633,402 i.e. two sureties for N7,316,701.50 each; the fourth accused should provide two sureties for the h remaining N16,718,159.50 i.e. two sureties for N8,359,079.75 each and the fifth accused should provide two sureties for the remaining N6,243,568.50 i.e. two sureties for N3,121,784.25 each. i (3) All the sureties should be property owners and the properties should be located within Eti-Osa Local Government Area and Ikeja Local Government Area of Lagos State. Certificate of Occupancy of the properties should be submitted i.e. photocopies and j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Patrick Ugwu Eze 347 a Sureties should attach their photographs (passport size) to their applications. (4) Each of the accused persons should deposit his or her b passport with the tribunal. It is furthered ordered that the Comptroller of Prisons should give Defence Counsel reasonable access to the accused persons pending the fulfilment of the conditions of bail. c Applications for bail granted. [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

348 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Governor Central Bank of Nigeria v. Alpha Merchant Bank Plc FEDERAL HIGH COURT, LAGOS DIVISION b SANYAOLU J Date of Judgment: 18 JULY 1996 Suit No.: FHC/L/CP/934/95

Banking – Bank – Revocation of licence of – Winding up of – Power of Central Bank to present petition – Section 38(4) c Banks and Other Financial Institutions Decree No. 25 of 1991

Facts d The respondent bank had its licence revoked pursuant to section 12 of the Banks and other Financial Institutions Decree 1991, and the Nigeria Deposit Insurance Corporation was appointed as a provisional liquidator of the respondent Bank. e Counsel for the petitioner submitted that by the provisions of section 38(4) of Banks and Other Financial Institutions Decree No. 25 of 1991, the appointment of the provisional liquidator should be deemed to have been made by the Fed- f eral High Court and urged that the appointment of N.D.I.C. was deemed to have been made by the court. He also submitted that the revocation of the licence by the Petitioner could constitute one of the grounds for winding up, and that g under section 38 of Banks and Other Financial Institutions Decree No. 25 of 1991, the petitioner was quite competent and had the locus standi to present the petition. Held – h 1. By the provisions of section 38 of Banks and Other Fi- nancial Institutions Decree No. 25 of 1991, the bank whose licence is revoked and the Governor of Central Bank of Nigeria who revokes the licence are both em- i powered to file a petition for the winding up of an affected bank. 2. Section 38(4) of Banks and Other Financial Institutions Decree No. 25 of 1991 provides that section 408 of j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

Governor Central Bank of Nigeria v. Alpha Merchant Bank Plc 349 a Companies and Allied Matters Decree, 1990 shall be construed as if the revocation of the licence is a ground for winding up of a company. In other words, the revo- b cation of the licence is one of the grounds for which a bank may be wound up under the provisions of section 408 of CAMA, 1990. 3. Per curiam c “I am also of the view that necessary procedure for the winding up of the respondent bank has been complied with in the instant case. Accordingly, I hereby order that the respondent bank – Al- d pha Merchant Bank, Plc whose registered office is situated at 188 Awolowo Road, Ikoyi Lagos, be wound up under the provisions of the Companies and Allied Matters Act 1990 as amended by section 38 of the Banks and other Financial Institution Decree 1991 and that the Nigeria Deposit Insur- e ance Corporation (“N.D.I.C.”) which was appointed as its provisional liquidator be and is hereby appointed a liquidator to enable them carry on their functions under sections 422–450 of the Companies and Allied Matters Act, 1990. That will be the Order of this Court.” f Petition granted. Case referred to in the judgment Nigerian g Financial Merchant Bank Ltd v. NDIC (1995) 6 N.W.L.R. (Part 400) 226 Nigerian statute referred to in the judgment h Banks and Other Financial Institutions Decree No. 25 of 1991, section 38

Judgment i SANYAOLU J: On 11th August, 1995, the petitioner herein filed a winding up petition in this Court. The penultimate paragraph of the said petition prays that:– “(i) Alpha Merchant Bank Plc (In Liquidation) may be wound j up by the Court under the provisions of the Companies and [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Sanyaolu J 350 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Allied Matters Decree, 1990 as amended by section 38 of a the Banks and Other Financial Institutions Decree 1991. (ii) Such other order or orders may be made in the premises as shall be just and equitable.” b The petition was duly verified by the principal legal officer with the petitioner and the verifying affidavit was filed on the same date id est the 11th day of August, 1995. By an order of this Court, the petition and the verifying af- c fidavit as well as other processes in the matter were served on the respondent herein by substituted service, by delivery of same to some adult inmate at the last known registered and business address at No. 188, Awolowo Road, Ikoyi, La- d gos. Thereafter, the petition was duly advertised once in the Official Gazette of the Federal Republic of Nigeria and in one National Daily Newspaper circulating in Lagos State in accordance with Rule 19 of the Companies Winding Up e Rules, 1983, and an affidavit of compliance was filed to this effect. If I may mention in passing that prior to the filing of the petition, the licence of the respondent bank has been re- f voked by the petitioner with the approval of the Head of State and Commander in Chief of the Armed Forces pursuant to section 12 of the Banks and Other Financial Institu- tions Decree, 1991 and the Nigeria Deposit Insurance Cor- poration appointed as a provisional liquidator of the respon- g dent Bank. Notice to this effect was duly published in an Of- ficial Gazette No. 9 Volume 91 of 5th September, 1994. The hearing of the petition suffered an initial set back as it met with opposition from at least seven persons on whose h behalf Notice of Intention to appear at the hearing of the petition and to oppose same was filed. On the other hand, two banks gave Notice of Intention to attend at the hearing of the petition and to support same. There was also filed in this i Court, a Notice of Preliminary Objection challenging the jurisdiction of this Court to hear the petition. Finally, on the 22nd June, 1996, when the petition came up again for hearing, this Court was informed that the Notice of j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Sanyaolu J Governor Central Bank of Nigeria v. Alpha Merchant Bank Plc 351 a Preliminary Objection has been withdrawn as well as the Notice of Opposition to the petition earlier filed in Court on behalf of the said persons. Instead the six creditors and b shareholder filed an application on 11th June, 1996 in Sup- port of the winding up. The Notice of Preliminary Objection as well as the Notice opposing the application having been withdrawn, were ac- c cordingly struck out by this Court. There being no opposition at this stage, learned Counsel for the petitioner was allowed to address me on the petition without calling oral evidence. d In his address, learned Counsel for the petitioner after going through the antecedents of the petition, informed this Court that after the revocation of the licence of the respondent bank by the petitioner, the Nigeria Deposit Insurance e Corporation was accordingly appointed a provisional liquidator of the respondent bank under section 38(3) of the Banks and Other Financial Institutions Decree in the public interest and was duly published in the Official Gazette of the f Republic of Nigeria as No. 9 Volume 91 of 8th September, 1994. Further, that same was filed in this Court on 16th Oc- tober, 1995. That there was also a Deed of Appointment of the N.D.I.C. as the provisional liquidator on 9th September, 1994 and was also filed in this Court on 16th October, 1995. g He submitted that by the provision of section 38(3) of BOFID, the appointment of the provisional liquidator shall be deemed to have been made by the Federal High Court h and therefore urged me to hold that the appointment of the N.D.I.C. is deemed to have been made by this Court. Also to hold the revocation of the licence by the petitioner is one of the grounds for winding up. He informed the Court that the Petitioner is duly charged with the statutory duty of granting i Banking Licence to prospective applicants by virtue of section 3 of the Central Bank Act, and also to withdraw same with the approval of the Head of State and Commander in Chief of the Armed Forces. He submitted that the Petitioner j therefore has a locus in this matter. Relying on Financial [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Sanyaolu J 352 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Merchant Bank Limited v. N.D.I.C. (1995) 6 N.W.L.R. (Part a 400) page 226 at 241 he submitted that section 38 of BOFID has expanded section 408 of CAMA, 1990 as one of those who may bring a petition to wind up a bank. That, there is b no opposition to the petition for winding up but that instead they have eight persons or bodies in support. He said that they have also filed a list of parties supporting the petition. That all the creditors and contributories shall be beneficiar- c ies pursuant to section 418 of CAMA, 1990. Finally he urged me to wind up the respondent bank and that N.D.I.C. which has been appointed a provisional liquidator be appointed a liquidator to enable them carry on their d functions under sections 422–456 of CAMA, 1990. I have carefully examined the documents filed in support of the winding up petition as well as the submissions of learned Counsel for the petitioner herein. I am of the view e that the petition not being opposed, the issue now left to the Court is to determine whether the petitioner herein is competent to present this winding up petition and also that the documents filed in Support of the petition are legally in or- f der. By the provisions of section 38 of BOFID, the Bank whose licence is revoked and the Governor of Central Bank of Ni- geria who revokes the licence are both empowered to file a g petition for the winding up of an affected bank. I therefore hold that the petitioner herein the Central Bank of Nigeria is competent to present this winding up petition. h As to the ground on which the winding up petition was presented. Section 38(4) of BOFID provides that section 408 of the Companies and Allied Maters Decree, 1990 shall be construed as if the revocation of the licence of a bank under the said Decree had been included as a ground for winding i up of a Company. In other words, the revocation of the licence, is one of the grounds for which a bank be wound up under the provisions of section 408 of CAMA, 1990. I am also of the view that necessary procedure for the winding up j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Sanyaolu J Governor Central Bank of Nigeria v. Alpha Merchant Bank Plc 353 a of the respondent bank has been complied with in the instant case. Accordingly, I hereby order that the respondent bank, Al- b pha Merchant Bank, Plc whose registered office is situated at 188 Awolowo Road, Ikoyi, Lagos, be wound up under the provisions of the Companies and Allied Matters Act, 1990 as amended by section 38 of the Banks and Other Financial c Institutions Decree No. 25 of 1991 and that the Nigeria De- posit Insurance Corporation (“N.D.I.C.”) which was appointed as its provisional liquidator be and is hereby appointed a liquidator to enable them carry on their functions d under sections 422–450 of the Companies and Allied Mat- ters Act, 1990. That will be the order of this Court. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION)

354 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Union Bank of Nigeria Plc v. Scpok Nigeria Limited

COURT OF APPEAL, PORT HARCOURT DIVISION ONALAJA, OKEZIE, ROWLAND UWAIFO JJCA b Date of Judgment: 18 JULY 1996 Suit No.: CA/PH/248/89

Banking – Bank Draft – A banker’s draft drawn between two branches of the same Bank – Whether qualifies as Bill of c Exchange – Bank draft – Meaning of; Distinction between Bank Draft and Cheque – Bills of Exchange – Meaning of Dishonoured Bill of Exchange – Measure of damages thereto; Interest – Principle guiding award thereto – Holder d of – Bank draft – Meaning of – Section 2(1) Bill of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 Damages – Award of damages by trial Court – When an Ap- pellate Court can interfere thereto e Facts The plaintiff claimed against the defendant special and general damages for defendant’s negligence and/or breach of f contract or duty in failing to pay Draft No. A268548 payable to plaintiff at defendant’s Station Road, branch Port Har- court. On 11th December, 1985, plaintiff’s Managing Director g and a representative of Texaco Nigeria Limited went to defendant branch at Moloney Street, Lagos where a cheque was issued to the defendant on behalf of the plaintiff for the purchase of the Draft. Draft No. A2698 for N50,798.47 h (Fifty Thousand, Seven Hundred and Ninety Eight Naira, Forty Seven Kobo) was duly issued to plaintiff. The plaintiff’s Managing Director paid the Commission through Tex- aco Nigeria Limited. The draft was made payable to defen- i dant’s branch State Road, Port Harcourt. On the 12th December, 1985, plaintiff duly paid the draft into its account with the United Bank for Africa Limited, Aggrey Road, Port Harcourt. United Bank for Africa in j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION)

Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 355 a accordance with Banking practice sent the draft to the defendant’s Station Road, branch, Port Harcourt for payment. Surprisingly, the draft (which is real cash) was returned by b the said Station Road, branch of defendant Company marked “Second Signature Irregular” notwithstanding that Plaintiff’s N50,798.47 (Fifty Thousand, Seven Hundred and Ninety- eight Naira, Forty Seven Kobo) was at all material times c with the defendant. In the meantime, relying on the draft plaintiff issued its cheques to its creditors in settlement of its obligations, the said cheques were not honoured as the Draft relied on was d dishonoured. As a result of the dishonour of the cheque by defendant bank plaintiff lost a lot of contract as funds were not available to honour its obligations to its clients and or customers. e The defendant on the other hand averred that they were not in a position to know who paid the Draft into the Account. And that the dishonouring of the Draft for irregular signature was done in good faith. f The learned trial Judge dismissed the claim for special damages but found for the plaintiff by awarding the sum of N75,000 (Seven Five thousand Naira) as general damages for failure of the defendant to pay on demand the draft is- g sued by Plaintiff. The Court in addition awarded a sum of N5,079.84 as interest payable on the amount on the draft. The Learned Trial Judge thus entered a total sum of N80,079.84 (Eighty Thousand, and Seventy Nine Naira, h Eighty-Four Kobo) in favour of the plaintiff and that judgment shall attract interest of 5% until payment. Dissatisfied, the defendant appealed to the Court of Ap- peal. i Held – 1. A Bill of Exchange is an unconditional order in writing addressed by one person to another, signed by the person j giving it, requiring the person to whom it is addressed to [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION)

356 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

pay on demand or at a fixed or determinable future time a a sum certain in money to or to the order of a specified person or to bearer. 2. A Draft drawn by a branch on another branch or head- b office of the same bank or vice versa, is not a Bill, since the drawer and drawee are in law the same person; thus it is not a cheque. But it is “a draft or order drawn on a banker” and if payable to order on demand the banker is c protected if he pays it in good faith. Drafts between two branches or between a branch and head office of the same bank may not be issued payable to bearer on demand. Drafts of the foregoing nature payable to order on d demand can now be crossed. If such a draft bearing a crossing is presented for payment across the counter, the banker may refused to pay it, but the holder can sue the bank either as drawer of a bill or maker or a promissory e note. It is therefore lawful and within the competence of the Plaintiff to treat the banker’s draft in issue either as a bills of exchange or as a promissory note since she is the holder. f 3. Banker’s draft payable to order on demand addressed by one branch of a bank to another branch or head-office of the same bank and not crossed in not a cheque. How- ever, in this case although all the drafts were addressed g by one branch of the defendant bank to another, they were all crossed. The trial court was therefore wrong to have held that the draft were promissory notes. 4. A bank draft is a cheque, draft or order for payment of h money drawn by an authorised officer of a bank upon either his own bank or some other bank in which funds of his bank are deposited. A bank draft is also called a Cer- tified Cheque. i 5. While a banker may refuse to honour an ordinary cheque on the ground that the drawer has no money in his account to cover the amount in the cheque, a bank draft on the other hand is payable at sight regardless of whether j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION)

Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 357 a the person on whose behalf the draft was issued held money in his account at the material time or not. 6. By virtue of section 2(1) Bills of Exchange Act Cap 35 b Laws of the Federation of Nigeria, 1990 a holder means the payee or endorsee of a bill or note who is in possession of it, or the bearer thereof. Applying this to the draft (exhibit 1) the respondent falls within the definition of a c holder. 7. Where a bill is dishonoured, the measure of damages, which shall be deemed to be liquidated damages shall be as follows:– d (a) 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 the Acceptor, and an En- dorser who has been compelled to pay the Bill, may e recover from the acceptor or from the Drawer, or from a prior endorser:– (i) The amount of the bill. (ii) Interest thereon from the time of presentment f for payment if the bill is payable on demand, and from the maturity of the bill in any other case. (iii) The expenses of noting or when protest is nec- g essary and the protest has been extended, the expenses of protest. Therefore the only damages to which the respondent was entitled under section 57 of the Bills of Exchange Act h would be the amount of the draft (already paid in July, 1986), the interest thereon from the time of presentation for payment and nothing more. 8. The general principle of law is that an award of general i damages is a matter for the trial Judge and normally an appeal court will not interfere with such award unless:– (a) Where the trial Judge has acted under a mistake of law; j (b) Where he has acted in disregard of principle; [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION)

358 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(c) Where he has acted under a misapprehension of a facts; (d) Where he has taken into account irrelevant matters or failed to take account of relevant matters; b (e) Where injustice would result if the appeal court does not interfere; or (f) Where the amount awarded is either ridiculously c low or ridiculously high that it must have been a wholly erroneous estimate of the damage. Applying the above to the instant appeal, the learned trial Judge acted under a mistake of law of the interpreta- d tion of sections 35 and 57 Bills of Exchange Act Cap 21 and by awarding the sum of N75,000 as general damages on the dishonoured Bill of Exchange. Appeal allowed. Cross Appeal dismissed. e Cases referred to in the judgment

Nigerian Adefulu v. Oyesile (1989) 5 N.W.L.R. (Part 122) 377 f Adeluyi v. Abidade 4 WA.C.A 169 Adeniji v. Adeniji (1972) 1 All N.L.R. (Part 1) 298 Adesanya v. President of the Republic of Nigeria (1981) 5 g S.C. 112 Adetipe v. Amodu (1969) NMLR 62 Aeroflot v. UBA (1986) 3 N.W.L.R. (Part 27) 188 Ajao v. Alao (1986) 5 N.W.L.R. (Part 45) 802 h Akinfolarin v. Akinnola (1994) 3 N.W.L.R. (Part 335) 659 Animashaun v. Osuma (1972) 1 All N.L.R. (Part 1) 368 Ariori v. Elemo (1983) 1 S.C.N.L.R. 1 i Attorney-General Kaduna State v. Hassan (1985) 2 N.W.L.R. (Part 8) 483 Badejo v. Federal Min. of Education and others (1990) 3 N.W.L.R. (Part 143) 254 j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION)

Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 359 a Balogun v. National Bank of Nigeria (1978) 3 S.C. 155 Balonwu v. Isokariari (1994) 7 N.W.L.R. (Part 358) 587 Carlen (Nigeria) Ltd v. Unijos (1994) 1 N.W.L.R. (Part 323) b 631 Coker v. Olukoga (1994) 2 N.W.L.R. (Part 329) 648 Ebba v. Ogodo (1984) 1 S.C.N.L.R. 372 Elendu v. Ekwoaba (1995) 3 N.W.L.R. (Part 386) 704 c G. Gappa Ltd v. Shonubi (1994) 4 N.W.L.R. (Part 337) 215 at 224 George v. UBA Ltd (1972) 8–9 S.C. 264 Ifezue v. Mbadugha (1984) 1 S.C.N.L.R. 427 d Ijebu Ode Local Govt. v. Adedeji Balogun and Co. Ltd (1991) 1 N.W.L.R. (Part 166) 136 Ikpeazu v. African Continental Bank Ltd (1965) NMLR 374 James v. Mid-Motors Nigeria Co Ltd (1978) 11–12 S.C. 31 e Lewis and Peat NRI Ltd v. Akhimien (1976) 7 S.C. 157 Mayaki v. Lagos City Council Caretaker Committee (1977) 7 S.C. 81 f Nkwocha v. Gov. of Anambra State (1984) 1 S.C.N.L.R. 634 NIPC v. The Thompson Organisation Ltd (1969) N.M.L.R. 99 Nwokoro v. Nwosu (1994) 4 N.W.L.R. (Part 337) 172 g Nzeribe v. Dave Engineering Co. Ltd (1994) 8 N.W.L.R. (Part 361) 124 Obere v. Board of Management Eko Baptist Hospital (1978) 6–7 S.C. 15 h Odumosu v. A.C.B. Ltd (1976) 11 S.C. 55 Ogbuehi v. The Gov. of Imo State (1995) 9 N.W.L.R. (Part 417) 53 Ojo-Osagie v. Adonri (1994) 6 N.W.L.R. (Part 349) 131 i Olu of Warri v. Kperegbeyi (1994) 4 N.W.L.R. (Part 339) 416 Oredoyin v. Arowolo (1989) 4 N.W.L.R. (Part 114) 172 Osafile v. Odi (1994) 2 N.W.L.R. (Part 325) 125 j Oseni v. Dawodu (1994) 4 N.W.L.R. (Part 339) 390 [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION)

360 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Oshinjinrin v. Elias (1970) 1 All N.L.R. 153 a Re-Adetona (1994) 3 N.W.L.R. (Part 333) 481 Salami v. Savannah Bank Nig. Ltd (1990) 1 N.W.L.R. (Part 130) 106 b Shell Petroleum Dev. Co (Nigeria) Ltd v. Tieba VII (1996) 4 N.W.L.R. (Part 445) 657 Solanke v. Ajibola (1969) N.M.L.R. 253 c State v. Gwonto (1983) 1 S.C.N.L.R. 142 State v. Onagoruwa (1992) 2 N.W.L.R. (Part 221) 33 Thomas v. Olufosoye (1986) 1 N.W.L.R. (Part 18) 669 Tometi v. Ajaguna (1975) N.M.L.R. 122 d Uka v. Irolo (1996) 4 N.W.L.R. (Part 44) 218 Union Bank Nigeria Ltd v. Nwoye (1990) 2 N.W.L.R. (Part 130) 69 Williams v. Daily Times of Nigeria Ltd (1990) 1 N.W.L.R. e (Part 124) 1 Yalaju-Amaye v. A.R.E.C. Ltd (1990) 4 N.W.L.R. (Part 145) 422 f Foreign Banque Populaire de Bienne v. Cave (1895) 1 Com Case 67 Blackburn v. Attorney-General (1971) 1 W.L.R. 1037 Capital and Counties Bank v. Gordon (1903) A.C. 240 g Commonwealth Shipping Representative v. P and O Branch Services (1823) A.C. 191 Couriets Case (1978) A.C. 425 h Dunlop Pneumatic Tyre Co Ltd v. Selfridge and Co Ltd (1915) A.C. 847 In Re: English Bank of River Plate (1893) 2 Ch.D. 438 i Statutes referred to in the judgment Nigerian Bill of Exchange Act Cap 35 Laws of the Federation of Ni- geria 1990, sections 2(1), 3(1), 5(2) j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION)

Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 361 a Foreign Bills of Exchange Act, 1882, section 57 b Nigerian rules of court referred to in the judgment High Court Rules of Eastern Nigeria, 1963, Order 33 Rules 5, 6, 9, 10 and 11 (Applicable in Rivers State in 1986) c Books referred to in the judgment Black’s Law Dictionary (6ed) Centennial Edition, 1891– 1991, page 145 Byles on Bills of Exchange (23ed) page 347 d Halsbury’s Laws of England Volume 4 (4ed) Paragraph 502 Halsbury’s Laws of England Volume 2, page 202 Article 374 Mcgregor on Damages (13ed) Paragraphs 205 pages145, e 795 page 543 and 804 pages 549–550

Counsel For the appellant: L.E. Nwosu, Esq. f For the respondent: S.J. Ofoluwa

Judgment g ONALAJA JCA: (Delivering the lead judgment) The plaintiff after service of the writ of summons issued in this action in the High Court of Rivers State, Port Harcourt, on the defendant in accordance with High Court (Civil Procedure) h Rules of Rivers State, exchanged, filed and delivered pleadings which were also amended with leave of court. Adopting the rule of law that a statement of claim supersedes the writ of summons, the plaintiff’s claims against the defendant were as pleaded at page 45 of the record of proceedings i wherein its paragraph 18 of the further amended statement of claim averred as under:– “18. Wherefore the plaintiff’s claim against the defendant is for special and general damages for defendant’s negligence j and/or breach of contract or duty in failing to pay DRAFT” [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA 362 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

No. A268548 payable to plaintiff at defendant’s Station a Road branch, Port Harcourt. PARTICULARS OF SPECIAL AND GENERAL DAMAGE (i) Payment of the sum of N50,798.47 (i.e. amount of b DRAFT dishonoured by defendant). (ii) 20% interest on the sum of the N50,798.47 from the 12th day of December, until July 1986, when the draft was paid or such other rate of interest as this Honour- able court may deem fit and proper. By banking prac- c tice and usage of trade, plaintiff is entitled to interest on the N50,798.47 while same was with defendant. Rate of interest is in practice fixed by the Central Bank. (iii) 5% interest on any award by this Honourable court in d favour of plaintiff until payment of any such amount. (iv) Loss of profit of N72,500 as stated in paragraph 12 above. (v) Loss of earnings as in paragraph 13 above N399,360. e (vi) Loss of goodwill with TEXACO N300,000 (vii) General Damages N100,000.” As reflected in subclaims (iv) and (v) of paragraph 18 of the further amended statement of claim (hereafter referred to in f the judgment simply as “statement of claim”)references were made to its paragraphs 12 and 13, for ease of reference they are hereby stated as under with other pertinent paragraphs of the statement of claim:– g “(5) On 11th December, 1985, plaintiff’s Managing Director and a representative of Texaco Nigeria Limited went to defendant’s branch at Moloney Street, Lagos where a cheque was issued to the defendant on behalf of the plaintiff for the purchase of the draft. h (6) Draft No. A 26948 for N50,798.47 was duly issued to plaintiff. Plaintiff’s Managing Director paid the commission through Texaco Nigeria Ltd. The draft was made payable to defendant’s Branch at Station Road, Port Harcourt. i (7) On the 12th of December, 1985, plaintiff duly paid the draft into its own account with the UBA Ltd, Aggrey Road, Port Harcourt. UBA in accordance with Banking practice sent the draft to the defendant’s Station Road branch in Port Harcourt for payment. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 363 a (8) Surprisingly, the draft (which is real cash) was returned by the said Station Road branch of defendant Company marked “Second Signature Irregular”, notwithstanding that plaintiff’s N50,798.47 was at all material times with the defen- b dant. (10) In the meantime, relying on the draft which is as good as cash, plaintiff issued its cheques to its creditors in settlement of obligations, the said cheques were not honoured as c the DRAFT relied on was dishonoured. (11) As a result of the dishonour of the cheque by defendant bank, plaintiff lost a lot of contracts as funds were not available to honour its obligations to its clients and or customers:– d (12) Plaintiff lost the following contracts with TEXACO NIGE- RIA LIMITED as a result of the wrongful act of the defendants in dishonouring the draft. (ii) Texaco Filling Station Code 400 (Near Traffic Light) e Express Road Port Harcourt Rehabilitation of the entire station. Plaintiff suffered loss of profit of N2,000. (iii) Texaco filling station Code 475 Rumuomasi Reha- bilitation of entire station. Plaintiff lost N26,000 f profit. (iv) Texaco filling station Canopy at the Express Road, Okigwe-fabrication and erection of the canopy. Plain- tiff lost N14,500 profit. g (v) Plaintiff could not complete its contract of mechanical work at Texaco Filling Station at Okigwe as per the work schedule agreement. The station was to be completed and commissioned on 30th December, 1985, this was not possible as the draft was dishon- h oured. Plaintiff lost goodwill with Texaco, plaintiff will rely on Texaco letters of 24th December, 1985 and 14th January, 1986. Loss of goodwill N300,000. Letter of 5/3/86 will also be relied on at the trial. i (13) Plaintiff also lost contract to supply equipment to I.G. In- dustrial Construction Nigeria Limited as follows:– (i) LPO No. 10271 of 5/12/85 for hiring of VIBRATOR ROLLER at N350 per day. Payment on every two weeks for one year, i.e. N350s x 26 days x 12 j months – N109,200. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA 364 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(ii) I.G. Industrial Construction Nigeria Limited LPO No. a 10294 of 31st December, 1985 for hiring of equipment Dozer at N930 per day. Payment on every two weeks for one year i.e. N930 x 26 days x 12 months – N290,160. b (14) Plaintiff’s machines were to go for servicing to enable it honour its contractual obligations. The machines (equipment) were to be serviced by Tractor And Equipment who had given a quotation to that effect. The said quotation is c dated 4th December, 1985 was for one of the machines. (ii) Plaintiff on 13th December, issued a cheque to a spare parts dealer for the supply of spare parts for the servicing of the machines. The cheque was not honoured as the DRAFT for N50,798.47 was not paid. d The cheque was post dated to 16th December, 1985.” As stated above, pleadings were exchanged between the parties. The defendant also amended its statement of defence referred to in this judgment as statement of defence. Some of e the paragraphs which are pertinent in the consideration of this appeal are hereby set down below being paragraphs:– “(4) The defendant is not in a position to know who paid the draft into that account as alleged in paragraph 7 of the f statement of claim. The defendant will at the trial show that the manner and circumstances in which the said draft was brought to it was not consistent with ordinary course of banking practice. (6) In answer to paragraph 9 of the statement of claim, the de- g fendant will show that in returning the said draft for irregular signature it acted in good faith and with all prudence as a responsible banking house of very long experience. Fur- thermore the defendant will show that the suddenness of its h presentation in Port Harcourt, the apparent strangeness of its payee; the irregularity of the validating signature the absence of the confirming cover from the issuing house because of the speed of presentation and that of the agent of the presenting bank from the defendant’s bank for i necessary clarification made it imperative that a prudent banker faced with such a situation will be acting recklessly if he pays on an instrument of such circumstance. The defendant will further show that it made sustained efforts to contact its issuing Moloney Lagos branch on the said j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 365 a 12th June, 1985 for confirmation but was handicapped by telecom failures. The defendant therefore denies being in breach of its banking obligations. (7) The defendant denies paragraphs 10 and 11 of the statement b of claim and will show at the trial of this suit that a draft is not the same as cash and the conduct of the plaintiff in writing cheques before it is actually cleared and proceeds thereof credited to his account was misconceived. The de- c fendant will further show that the said draft was returned the same day it was presented to it thereby putting the plaintiff on immediate notice of the absence of payment. The defendant will further show that as is usual with situations where instruments are returned for irregular signatures, the d holders are only required to go back to their root of title to get a confirmation by speeding up their covers or getting a replacement. The plaintiff did not take this option before instructing his solicitors. (8) The defendant denies the allegations contained in paragraph e 12 and all its subsections and will subject the plaintiff to the strictest proof of his averments therein. The defendant will show that there was no loss of goodwill from TEXACO suffered by the plaintiff. f (9) The defendant denies the averments in the whole of paragraphs 13 and 14 of the statement of claim and will show at the trial of this suit that they are speculative statements. (10)(a) The defendant will contend that according to banking practice when the regularity of a validating signature to an in- g strument is doubtful such instrument is never paid on, until a confirmation of the signature is obtained either in writing or orally and that responsibility is on the payee of the instrument and it is only a matter of courtesy that a banker supplements the payee’s efforts by making her own enquir- h ies. The defendant will further show it is consistent with banking practice that all instruments regularly presented for payment must on their face bear the name and date stamp of the payee bank, whether paid or returned unpaid. i (11)(a) The defendant avers that it had since the month of July 1986 paid the said draft No. A 269548 to the plaintiff after it had been regularly presented. (12) The defendant denies paragraph 18 of the statement of claim as the losses allegedly suffered in Texaco are untrue and j nonexistent while those claimed as regards I.G. Industries [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA 366 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

are not unreasonable and would contend that it is not liable a to the plaintiff in damages at all, the defendant will further state that the entire claim is speculative, illusory, misconceived and should be dismissed.” b With the leave of the trial court, plaintiff sought and was granted leave to file a reply to the statement of defence. The reply is at page 20 of the record of appeal. With the close of pleadings, the case proceeded to trial. c To establish its case, plaintiff called four witnesses. The first plaintiff’s witness, a banker, recalled the 12th De- cember, 1985, when the plaintiff, customer of UBA Aggrey Road branch Port Harcourt, lodged with UBA, Union Bank Draft for special clearing, with Union Bank Ltd, the defen- d dant at its Station Road branch Port Harcourt. The draft was sent through a messenger who was requested to come back the following day. On the following day, the draft was returned with an endorsement “Second Signature Irregular.” e The draft of Union Bank of Nigeria Ltd No. A269548 issued on 11th December, 1985 by Union Bank of Nigeria Ltd Moloney Street branch Lagos was drawn in favour of the plaintiff to the defendant at its Station Road branch Port f Harcourt for the sum of N50,798.47. With consent of the parties after comparison of the original with the photocopy, the latter was admitted and marked exhibit I. It was returned to their customer, the plaintiff. On 7th April, 1986, the defendant wrote to UBA, the banker of the plaintiff. The letter g was marked exhibit 2. As a result of exhibit 2 dated 1st April, 1986 wherein plaintiff was requested to represent the draft, UBA wrote a letter to the plaintiff on 8th April, 1986. The letter was admitted and marked exhibit 3. In it plaintiff h was advised to represent exhibit 1 the draft. She concluded her testimony that her bank adopted proper procedure in handling the transaction. In cross examination, she stated she had 4½ years banking experience with H.N.D. in Ac- i countancy. She was asked banking procedure for clearance of cheques as exhibit 1 was for special clearance of a cheque it would not go through the central clearing house. The defendant did not send to UBA a banker’s payment document hence the money was not paid. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 367 a The plaintiff is an incorporated company registered in Ni- geria. The second PW was the Director and Administrative Manager of the plaintiff. He testified that plaintiff was a b contracting company based in Port Harcourt but carries on operations all over Nigeria especially in Imo, Cross River, Rivers and Lagos States. Plaintiff was one of the principal contractors to Texaco, Unipetrol, National Oil Marketing Co Ltd and I.G. Industrial Construction Co Ltd Uba, Aggrey c Road branch was the banker of plaintiff. Second PW knew the defendant. On 11th December, 1985, Texaco drew in Lagos exhibit 1 d in favour of plaintiff. It was lodged with plaintiff’s banker for payment by special clearance on 12th December, 1985, in Port Harcourt. On 16th December, 1985 being a Monday, exhibit I was handed back to him, by plaintiff’s bankers UBA. e He proceeded to the defendant branch at Station Road Port Harcourt where he was rebuffed. Between 12th and 16th December, 1985, plaintiff had f many projects on hand. Plaintiff had LPOs from I.G. Indus- trial Construction Company Ltd to supply a roller for the Imo State University site for a year at the rate of N350 per day. The LPO was admitted as exhibit 4 and would have g fetched it N109,200. Plaintiff also had L.P.O. admitted as exhibit 5 for supply of a Bulldozer D8 for 12 months at N930 per day at 26 days per month. Based on the LPOs plaintiff issued a post-dated cheque to a spare parts dealer h for N10,400 for supply of spare parts. The bounced cheque was admitted as exhibit 6. Another cheque issued to one Joe Okeke in respect of a Filling Station in Okigwe also was dishonoured due to non-payment of the draft was admitted in evidence as exhibit 7. He stated that if the spare parts of D8 i Bulldozer were supplied Tractor and Equipment were to service them. Tractor and Equipment quotation was marked exhibit 8. As a result of non-payment of the draft plaintiff lost the contract to supply the equipment. Plaintiff also suf- j fered great losses in the contracts with Texaco. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA 368 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Second PW testified that plaintiff lost N32,000 for failure a of the contract of Texaco Filling Station along Express Way Code 400. Plaintiff also lost N26,000 and N14,580 from contracts for non-performance from Texaco, which led to a b dent in plaintiff’s relationship with Texaco. The said company wrote 3 threatening letters to plaintiff, the letters were admitted and marked exhibits 9–9B. Second PW later instructed solicitor for the plaintiff. The c letters exchanged between plaintiff’s solicitors and the defendant were admitted as exhibits 11, 12, 13 and 14. On 8th April, 1986 their banker’s wrote exhibit 3 at a time when this action was already pending in court, so exhibit 1 was d not represented. He concluded his evidence-in-chief by letter admitted as exhibit 15 and that he claimed as stated in the pleadings. Second PW was cross-examined that he was not aware that e the draft had already been paid and the proceeds credited to plaintiff s account. He agreed that as on the dates in exhibits 6 and 7, plaintiff’s account had not been credited with the proceeds of the draft. exhibit 5, a contract was dated 31st f December, 1985, whilst exhibit 6 was dated 16th December, 1985. He did not sign personally exhibits 4 and 5. He stated he could not remember when Tractor and Equip- ment made their quotation and would be surprised that ex- g hibit 8 was not signed by Tractor and Equipment. That apart from exhibits 4 and 5, plaintiff had no written agreements with I.G. Industrial Company Ltd. When exhibit 10 was written plaintiff claimed then N488,000 as damages. h The third PW was Personal Assistant to the Site Adminis- trator of I.G. Industrial Company Nigeria Ltd, Okigwe. His employer, a building contractor, had a permanent site at the Imo State University. He knew the plaintiff as a company i which had business transaction with his employer which covered 18 months period as at when he testified. The plaintiff supplied his employer with building materials and building equipment. Between October and November, 1986 plaintiff held discussion with Mr Edry in his presence about j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 369 a supply of equipment like roller and bulldozer. The former was for the road whilst the latter was for clearing of the site. He was present during discussions with the Site Engineer a b foreigner, who was not too good in English language and he did the interpretation. He identified exhibits 4 and 5 as LPOs issued by his employer, and he signed them. Plaintiff failed to supply the equipment and gave as reason for the failure that he had problems with the bank. His company instructed c another company, Our Live Ltd, to supply the equipment due to the failure of the plaintiff. In cross-examination he agreed he did not prepare exhibits d 4 and 5, the supply of equipment was effective from the date of the LPOs. Both exhibits 4 and 5 were dated 31st Decem- ber, 1985. The fourth PW and plaintiff’s last witness was a banker e who testified on banking procedure, as to rates of interest in the banking world and that the Central Bank of Nigeria fixed interest rates. In 1985, the rate of interest on Savings Ac- count was 9½%, whilst for deposit it ranged depending on f period of maturity from 8½% to 10%, for 6–12 months 9½% and over 12 months at 10%. The rate of interest charged on overdraft was 13%. A bank draft is as good as cash payable on demand, being g a banker’s own cheque. Before it was issued they must have taken its value and when presented it was paid without question. Failure to pay immediately the value entitled the purchaser to claim interest on the amount on the draft. Where a h draft is issued, it is the responsibility of the paying bank to see that all the signatures on it are regular. As for a draft unlike a cheque, as a draft means the bank is the drawer and drawee, the purchaser of the draft has nothing to do with i regularising any signature. The fourth PW was grossly cross-examined. Where there is discovery of a forged instrument by a payee, the paying bank would be responsible and if discovered before payment j the payee is held responsible for the forgery. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA 370 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

As a draft is issued by one branch to another branch, the a issuing branch would send cover and confirmation. By cover it meant the issuing branch sending equivalent funds to the paying branch. Confirmation meant sending by the quickest b means of information to the paying branch that such a draft had been issued. The message could be by radio or by telex. The confirmation is the most important thing and must be by the quickest means. c In a situation before cover and confirmation had been received a signature on the draft is irregular, you sought confirmation from the issuing branch. He gave evidence on the banking practice on cheques at UBA and concluded his evidence by stating his qualification as an Associate of Institute d of bankers. With this witness plaintiff concluded its case. The first and second DWs were workshop managers and acting area credit controller respectively of Tractor and e Equipment. The long and short of the testimonies being that exhibits 6 and 8 did not emanate from Tractor and Equip- ment, Port Harcourt. The third and last DW, a banker, was an employee of the f defendant, spanning a period of 8 years. To his knowledge exhibit 1 was brought to the defendant’s branch Office at Station Road, Port Harcourt through a UBA Messenger contrary to the procedure of sending drafts of cheques under- g cover of cyclostyled letter with the top copy signed by the receiving bank and given to the messenger. It is by the top signed copy that the messenger would come back to know the fate of the draft cheque. The defendant became suspi- h cious not only of the wrong method but also the speed of presentation within 18 hours of the issue. Irrespective of the irregularities they checked and found that the second signature was irregular. The third DW stated they tried to contact the issuing office. A telegram was sent as due to power fail- i ure which was general in town they could not use radio message. There was supposed to be a message from the issuing office in the instant case the Moloney Branch in Lagos. The j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 371 a message is in banking parlance known as a cover and made of two forms. For the sum of N1 – N10,000, the message comes in the form of a voucher. For N10,000 and above the b cover is in form of a telegram with the response also by telegram sent through NITEL. The NITEL cover comes in within 24 hours. In the instant case the draft’s arrival preceded the cover. The original of c exhibit 1 was later presented and was paid in July 1986. The draft was returned to the UBA that presented it. No bank would pay or give credit to the draft where there was irregularity in the signature even where there was a cover. d The draft in question was purchased by Texaco in Lagos. The commission was charged to Texaco, the authority from Texaco was admitted and marked exhibits 16 and 16A. It was only Texaco that could request for a replacement of the draft. e Witness did not see second PW on 12th December, 1985. A draft is a banker’s cheque which on its face value, is assumed that there is money available before it was to be paid but the signature must be correct. A cash is a legal tender f used in day to day monetary transaction. He disagreed that a draft is as good as cash or regarded as cash. The authorised signatures of drafts vary from one branch g of the bank to the other. The defendant did not breach any banking obligations to plaintiff and thereby not liable to- plaintiff. The defendant already paid the full value of the draft as was legally paid due to him. It is not in banking practice to pay interest on draft. h The third DW was cross-examined. He stated that the date of issuance and date of presentation was too fast. This created suspicion. It was possible to purchase a draft in Lagos and i present it in Port Harcourt the same day. From experience most of the frauds concerning drafts are those presented with such speed and in company’s name since the company had no account with his branch. A presenter decides on presentation in the instant case the draft was issued by Moloney Street j branch in Lagos passed through another bank before it [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA 372 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. was presented to his branch. He was not aware that plaintiff a was treated with hostility. Exhibits 10, 13, 11, 12 and 14 were exchanged correspondence between plaintiff’s solicitors and defendants respec- b tively. He concluded his testimony that the draft was paid in July, 1986 when it was presented. c Learned Counsel for the defendant and plaintiff addressed the court extensively which addresses were concluded on 10th April, 1987. Judgment was eventually delivered by P.G. Okara, J of the Rivers State High Court holden in Port d Harcourt on 5th October, 1987 which judgment covered pages 84 to 108 of the record of proceedings. The learned trial Judge dismissed the claim for special damages but found for the plaintiff by awarding the sum of N75,000 as general damages for failure of the defendant to pay on de- e mand the sum of N50,798.47 issued to the favour of plaintiff in exhibit 1. The learned trial Judge in addition awarded a sums of N5,079.84 as interest payable on the amount in exhibit 1. The learned trial Judge entered finally a total sum of f N80,079.84 in favour of plaintiff against defendant and that the judgment sum shall attract interest of 5% until payment. Being dissatisfied with the judgment, the defendant henceforth referred to in this judgment as the appellant filed a no- g tice of appeal dated 5th October, 1987 and filed on 6th Oc- tober, 1987 against the said judgment. The notice of appeal is covered by pages 108A–108C of the record of proceedings. h In the said notice of appeal, appellant raised two grounds of appeal and supplied the particulars. The notice of appeal was served on the plaintiff hereinafter referred to in this judgment as the respondent. i With the leave of this Court, appellant filed 10 additional grounds of appeal and furnished the particulars for all the grounds of appeal. The appellant raised in its appellant’s brief of argument the under-mentioned issues as the issues j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 373 a for determination in this appeal in paragraph 2 at page 2 of appellant’s brief of argument as follows:– “2.0 ISSUES FOR DETERMINATION b 2.1 Whether from the pleadings and the evidence the respondent proved the case he brought before the lower court. 2.2 Whether any other damages are recoverable on a dishonoured draft other than those provided for in section 57 of c the Bills of Exchange. 2.3 Whether the lower court was justified in law in awarding interest at the rate of 20% per annum for a period of 6 months on the value of the dishonoured draft. 2.4 Whether the sum of N75,000 awarded as general damages d by the lower court was based on wrong principles, of law, and also whether the damages were excessive. 2.5 Whether as a result of the long adjournments between the final address (sic) addresses and when judgment was deliv- e ered the learned trial Judge could not have properly evaluated the evidence led before him and whether this must have occasioned a miscarriage of justice.” In accordance with the Court of Appeal Rules after service f of the appellant’s brief of argument the respondent filed respondent’s brief of argument. In page 3 paragraph 3 of respondent’s brief of argument based upon the established rule of law that respondent’s issues for determination must be based on the grounds of appeal, respondent distilled the un- g dermentioned as the issues germane for determination in this appeal thus:– “3. ISSUES FOR DETERMINATION 3.01 It is submitted that the issues for determination in this ap- h peal are:– (1) Whether the respondent’s case succeeded in the lower court. (2) If the respondent’s case succeeded whether it was enti- i tled to damages. (3) Whether if the respondent is entitled to damages were damages awarded excessive. (4) Whether the lower court was right in awarding interest at j the rate of 20% on the amount of the draft. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA 374 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(5) Whether the period between final address (sic) addresses a and the judgment affected the proper appraisal and evaluation of the evidence in the case.” It is worthy to note that the issues formulated by the respon- b dent are similar to the issues formulated by the appellant and either can be used in the determination of this appeal. Efforts shall be made to make cross references in the consideration of the appellant’s and respondent’s issues for determination. c The facts of the case based upon the pleadings and evidence have been narrated above. This being a civil matter, the onus is on the respondent as laid down in sections 135, 136 and 137 Evidence Act Cap 112 Laws of the Federation d of Nigeria, 1990, to establish its case by preponderance of evidence of probability whilst the appellant which has not filed a counter claim has only the burden to defend the case with its burden light, that respondent must succeed on the strength of its own case and not the weakness of appellant’s e case. Issue 2.1 of appellant’s issue for determination which raised the issue of burden of proof and whether the respon- f dent based upon the pleadings, and evidence the learned trial Judge was right whether respondent discharged the burden placed on it. The respondent’s issue for determination raised the same point on the burden of proof. g The appellant submitted that respondent’s claim as formulated in paragraph 18 of the further amended statement of claim (supra) was based on negligence and/or breach of contract or duty of appellant in failing to pay draft No. A269548 admitted as exhibit 1 on demand. appellant denied liability h based on breach of contract and breach of duty of care to wit on negligence as averred in paragraphs 3, 5, 6, 7, 10(a) and 12 of the statement of defence. i The appellant contended that there was no privity of contract between the parties as respondent was not its customer. Exhibit 1 was a contract of customer banker between appellant and Texaco. It conceded that exhibit 1 though made for the benefit of respondent, not being a party, it cannot enforce the j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 375 a contract against the appellant as decided in Dunlop Pneu- matic Tyre Co Ltd v. Selfridge and Co Ltd (1915) A.C. 847 at 853 adopted and followed in Ikpeazu v. African Continen- b tal Bank Ltd (1965) NMLR 374. The findings of the learned trial Judge that the transaction between the parties was contracted as the respondent was a holder of the draft for value was erroneous in that the appel- c lant paid the respondent fully for the value of the draft as at July, 1986, during pendency of the case before the judgment, the respondent did not assert payment, so appellant was not in breach of contract, so the action ought to have been dismissed based on contract as there was no privity of d contract between the parties. The respondent though also based its claim on negligence, it never proved it as a result the learned trial Judge made no e finding on negligence. The case ought to have been dismissed Tometi v. Ajaguna and others (1975) 1 NMLR 122 at 124. The finding of the learned trial Judge in treating the re- f spondent as a holder under the Bills of Exchange Act and thus enabled the respondent to treat the draft either as a bill of exchange or a promissory note differed remarkably from the case put up by the parties before the court. The respondent’s case was based on the law of contract and negligence g as earlier submitted. It was never based on the Bills of Ex- change Act. Also, respondent never treated the draft as a bill of exchange or a promissory note, it treated the draft as cash or money, as stated in the evidence of first PW and as h pleaded. This distinction is important as the damages that flow from non-payment of money differs from the dishonour of a bill of exchange or a promissory note as decided by Chitty, J, in Re English Bank of the River Plate (1893) 2 i CH.D. 438 at 446 that:– “...the normal measure of damages for non-payment of money is interest where interest is allowable by contract or by law.” A court has no power to formulate for the parties a case j never put before it, a fortiori, a court cannot decide such a [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA 376 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. formulated case without giving the parties the opportunity of a being heard. (See Adeniji and others v. Adeniji and others (1972) 1 All N.L.R. (Part 1) page 298 at 305, Animashaun v. Osuma and others (1972) 1 All N.L.R. (Part 1) page 363 at b 374, Tometi v. Ajaguna and others (supra). As the learned trial Judge formulated issue not raised from the pleadings and did not afford appellant opportunity the appeal be allowed. c The respondent on its issue, one similar to issue one in appellant’s brief of argument submitted that from the facts, the main plank that the Draft exhibit 1 purchased in Lagos payable in Port Harcourt on demand was not paid, the respon- d dent could bring its action under (i) Contract (ii) Negli- gence/Breach of duty (iii) As holder of the Draft (Bill of Ex- change). It is submitted that contract was established between the e parties and the court so found. The money for the purchase of the draft belonged to the respondent and it paid the commission. The lower court was right in so finding, giving right to the respondent to base its claim on contract. f As appellant received value and consideration in issuing exhibit 1 and having undertaken to pay the draft on demand at Port Harcourt the non-payment was a reckless and negligent act of the appellant as the reason for the refusal was not g proved. The appellant was in breach of its duty of care to pay the draft on demand. See Union Bank Nigeria Ltd v. Nwoye (1990) 2 N.W.L.R. (Part 130) page 69 at 78 C.A.; Salami v. Savannah Bank Nigeria Ltd (1990) 2 N.W.L.R. (Part 130) page 106 at 127 and Balogun v. National Bank of h Nigeria Ltd (1978) 3 S.C. 155. Exhibit 1 being a banker’s cheque as evidence of third DW showed was a Bill of Exchange, the holder can claim on i same if dishonoured. In relying on the Bills of Exchange Act, the learned trial Judge did not make out a case, the parties did not make at the hearing. By section 73 (now 74) Evi- dence Act the learned trial Judge could take judicial notice of the Bill of Exchange Act more also when the draft was j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 377 a pleaded as a bankers cheque, it is correct to state that the learned trial Judge did not formulate a different case for the respondent, so there was no denial of not being heard. The b learned trial Judge was right to have relied on the Bill of Ex- change Act as respondent was holder of the draft. Court to find in favour of respondent and dismiss the appeal. It is common ground that exhibit 1 was drawn in Lagos at c the Moloney branch of the appellant as bank draft on its branch in Station Road, Port Harcourt, in favour of the respondent on 11th December, 1985. That respondent presented exhibit 1 for payment on demand on 12th December, d 1985 which was not paid on the ground that the second signature in exhibit 1 was irregular. That on 1st April, 1986 by letter admitted as exhibit 2 appellant requested the respondent through its bankers to represent exhibit 1. That respondent’s bankers UBA received exhibit 2 on 7th April, 1986. e By letter of 8th April, 1986, by UBA admitted as exhibit 3, UBA informed respondent to represent exhibit 1. The respondent did not represent exhibit 1 as requested because it had instituted the action in the lower court against the appel- f lant with service of the writ and process on the appellant in March 1986. Eventually, respondent was duly paid and given full value of exhibit 1 in July 1986. That addresses of counsel to the parties were concluded on 10th April, 1986 g and judgment was delivered on 5th October, 1986. At pages 88–91 of the record of proceedings the learned trial Judge observed as follows:– “The key to the law that should govern the relationship between h the parties here on the banker’s draft (exhibit 1) is whether a banker’s draft falls within the definition of a bill of exchange. Section 3(1) of the Bills of Exchange Act defines a bill of exchange as follows:– i ‘A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person or j to bearer.’” [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA 378 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

It would be noted that the definition here envisages the a drawer of the bill and the drawee to be two different persons. It would also be noted that the exhibit 1 both the drawer and the drawee are the same person. It is a banker’s b draft issued by a branch of the defendant to be paid by another branch of the draft of the defendant. A banker’s draft between two branches of the same bank does not conform with an ordinary cheque when the drawer and the drawee are c two different persons. Nor does such a draft ex facie conform with the definition of a bill of exchange. A banker’s draft between two branches of the same bank is more like a promissory note. d This however, is part of what appears in Halsbury’s Law of England Volume 2 page 202, Article 374 on the topic of “Drafts between branches of same bank”:– “A draft drawn by a branch of another branch or head office of the e same bank or vice versa, is not a bill, since the drawer and drawee are in law the same person, thus it is not a cheque. But it is ‘a draft or order drawn on a banker’ and if payable to order on demand the banker is protected if he pays it in good faith . . . Drafts between two branches or between a branch and head office f of the same bank not be issued payable to bearer on demand. Drafts of the foregoing nature payable to order on demand can now be crossed. If such a draft bearing a crossing is presented for payment across g the counter, the banker may refuse to pay it; but the holder can sue the bank either as drawer of a bill or maker of a promissory note”. It would be seen at the footnote to this passage that reliance was had on the Bills of Exchange Act of 1882 and on the h decision in Capital and Counties Bank v. Gordon (1903) A.C. 240 HL. The situation is the same statutorily with the provision in section 5(2) of our Bills of Exchange Act Cap 21 Laws of i the Federation of Nigeria. This Act is in fact the codification of the laws relating to bills of exchange, cheques and promissory notes as the law stood as 45 and 46 VICTORIA 61 that is the 1882 Act of Britain. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 379 a Section 5(2) of our Bills of Exchange Act reads:– “Where in a bill the drawer and the drawee are the same person, or where the drawee is a fictitious person or a person not having ca- b pacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or as a promissory note.” This then is the attitude of the law. It is therefore lawful and within the competence of the plaintiff to treat the banker’s c draft in issue here (exhibit 1) either as a bill of exchange or as a promissory note since she is the holder. It is therefore my finding that the law governing the issues between the parties here is one relating to bills of exchange d or promissory note, particularly the Bills of Exchange Act which deals with bills of exchange, cheques and promissory notes, it is not completely an ordinary contract in the common law. By section 89 of the Act, the provisions of the Act e apply to promissory notes as well, subject to part IV of the Act (sections 85–89 of the Act) which relates to promissory notes exclusively. f My understanding of the attack on the judgment on lack of action based on breach of contract, as appellant contended (supra) that there was no privity of contract between respondent and appellant even though exhibit 1 was for respondent’s benefit being not a party. Also that there was no g duty of care owed by appellant to respondent thereby no negligence was proved and established by respondent against appellant therefore respondent lacked capacity to sue or claim in negligence against appellant. The third conten- h tion raised by appellant on issue one is that the Bill of Ex- change Act was not pleaded and if properly sustained appellant was not given opportunity to defend it. All above can succinctly be put that the appellant lacked the locus standi to i institute this action. A defendant can challenge the locus standi of a plaintiff under section 6(6)(a), (b) of 1979 Con- stitution of Nigeria which provides as under:– “6. The judicial powers vested in accordance with the foregoing j provisions of this section:– [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA 380 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(a) shall extend notwithstanding anything to the contrary in a this Constitution, to all inherent powers and sanctions of a court of law; (b) shall extend to all matters between persons, or between b government or authority and any person in Nigeria, and to all actions and proceedings relating thereto, for the determination of any question as to the civil rights and obligations of that person.” c So held the Supreme Court in the case of Chief Dr Irene Thomas and others v. The Most Reverend Timothy Omotayo Olufosoye (1986) 1 All N.L.R. (Part 1) page 215 (1986), 1 N.W.L.R. (Part 18) page 669; Badejo v. Federal Ministry of Education and others (1990) 3 N.W.L.R. (Part 143) page d 254; (1990) 2 WBRN 48 CA, Busari v. Oseni (1991) 4 N.W.L.R. (Part 237) page 557 at 566-568 S.C.; G. Cappa Ltd v. Ajayi Shonunbi and others (1994) 4 N.W.L.R. (Part 337) page 215 at 224, CA; Lawrence Elendu and another v. e Felix Ekwoaba and 4 others (1995) 3 N.W.L.R. (Part 386) page 704 at 715 CA; Chief Boniface Amadi Ogbuehi and 3 others v. The Governor of Imo State and 3 others (1995) 9 N.W.L.R. (Part 417) page 53 C.A.; Attorney-General. Ka- f duna State v. Hassan (1985) 2 N.W.L.R. (Part 8) page 453 S.C. all applied and adopted in paper presented by Onalaja, JCA on 3rd July, 1996 at the 6th Advance Course in Practice and Procedure at the Nigerian Institute Of Advance Legal g Studies University of Lagos Akoko on the topic, “Parties to Civil Actions.” It is perfectly in order for the appellant to challenge the locus standi of the respondent, it is trite law that the trial h Judge, the Court of Appeal and Supreme Court can suo motu raise the issue locus standi and can even be raised for the first time on appeal either in the Court of Appeal or the Su- preme Court. Blackburn v. Attorney-General (1971) 1 i W.L.R. 1037 per Lord Denning, M.R., Couriets Case (1978) A.C. 425; Senator Abraham Adesanya v. President of the Republic of Nigeria and another (1981) 5 S.C. 112–192; Adefulu v. Oyesile (1989) 5 N.W.L.R. (Part 122) page 377 S.C.; Oredoyin v. Arowolo (1989) 4 N.W.L.R. (Part 114) j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Onalaja JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 381 a page 172 S.C.; State v. Onagoruwa (1992) 2 N.W.L.R. (Part 221) page 33 S.C.; Olu of Warri v. Kperegbeyi (1994) 4 N.W.L.R. (Part 339) page 416 in Re Adetona (1994) 3 b N.W.L.R. (Part 333) page 481 CA. It is common ground that exhibit 1 was a bank draft issued by the Moloney branch of the appellant to its Station Road branch here in Port Harcourt in favour of the respondent, c what does a bank draft constitute in law? Or what is a bank draft? At page 145, Black’s Law Dictionary (6ed) Centen- nial Edition 1891–1991 Bank Draft means:– “Bank Draft, a check, draft or other order for payment of money d drawn by an authorised officer of a bank upon either his own bank or some other bank in which funds of his bank are deposited. An order to pay that is similar to a check, except that it is not payable on demand. Instead a bank draft is payable when the issuing firm accepts it.” e UWAIFO JCA: Defined a bank draft in African Continental Bank Ltd v. Alhaji Taofiki Alao (1994) 7 N.W.L.R. (Part 358) page 614 at 629 wherein it was held:– “13. A bank draft is a cheque, draft or order for payment of f money drawn by an authorised officer of a bank upon either his own bank or some other bank in which funds of his bank are deposited. A bank draft is also called a certified cheque. Lifted from (5ed) of Blacks Law Dictionary. g 14. Although it has been held that a banker’s draft payable to order on demand addressed by one branch of a bank to another branch or head office of the same bank and not crossed is not a cheque, however, in this case although all the drafts were addressed by one branch of the defendant bank h to another, they were all crossed. The trial court was therefore wrong to have held that the draft were promissory notes.” Section 2(1) Bills of Exchange Act Cap 35 Laws of Federa- tion of Nigeria, 1990 defines a draft. i In United Bank of Africa Ltd v. Julius Ibhafidon (1994) 1 N.W.L.R. (Part 318) page 90 at 99 EJIWUNMI, JCA held as follows:– “11. While a banker may refuse to honour an ordinary cheque on j the ground that the drawer has no money in his account to [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA 382 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

cover the amount in the cheque, a Bank Draft on the other a hand is payable at sight regardless of whether the person on whose behalf the draft was issued held money in his account at the material time or not. It follows that in this case, it is a non-issue whether Mr Ehinola’s domiciliary account b was opened with forged draft or not. The appellant had a duty to have honoured its draft already issued to the respondent and then proceed against Mr Ehinola to recover its money, which could be done by simply debiting (Mr) Ehi- nola’s account if it had not already done so and then call on c him to come and credit his account with more funds. 12. A bank draft means a draft payable on demand by or on behalf of a bank upon itself whether payable at the head office or some other office of the Bank.” d Sections 73 and 74(1) Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990 provide as follows:– (formerly sections 72 and 73 Evidence Act) “73. No fact of which the court must take judicial notice e need be proved. 74(1) The court shall take judicial notice of the following facts:– (a) all laws or enactments and any subsidiary legislation made there under having the force of law f now or heretofore in force or hereafter to be in force, in any part of Nigeria; (b) all public Acts passed or hereafter to be passed by the National Assembly and all subsidiary legisla- tions made thereunder and all local and personal g Acts directed by the National Assembly to be judicially noticed.” Judicial notice refers to facts which a Judge can be called upon to receive and to act upon either from his general h knowledge of them or from inquiries to be made by himself for his own information from sources to which it is proper from him to refer. Commonwealth Shipping Representative v. P. and O. Branch Services (1823) A.C. 191 at 212. Sec- i tion 74(1)(a), (b) Evidence Act (supra) enjoined a court by mandatory provision to take judicial notice of all laws or enactments made there under and having the force of law. (See James Adetipe v. Jimoh Omisakin Amodu and another (1969) NMLR 62 S.C.; Sylvester Johnson Mayaki v. Lagos j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 383 a City Council Caretaker Committee (1977) 7 S.C. 81, Ajao v. Alao (1986) 5 N.W.L.R (Part 45) 802 S.C.). There was in existence the Bills of Exchange Act Cap 21 Laws of the b Federation of Nigeria, 1958 by virtue of section 274(1) 1979 Constitution of Nigeria it was an existing law under the Constitution and read as under:– “274(1) Subject to the provisions of this Constitution, an exist- c ing law shall have effect with such modifications as may be necessary to bring it into conformity with the provisions of this Constitution and shall be deemed to be (a) an Act of the National Assembly to the extent that d it is a law with respect to any matter on which the National Assembly is empowered by this constitution to make laws in the second Schedule dealing with legislative powers e in Part 1 Exclusive Legislative List item 5 is “Banks, banking, bills of exchange and promissory notes.” As bills of exchange is on the exclusive legislative list it is only the National Assembly that can legislate on it. By sec- f tion 274(1)(a) if the 1979 Constitution of Nigeria, the Bills of Exchange Act Cap 21 Laws of the Federation of Nigeria, 1958 is an existing law. (See Chief R.O. Nkwocha v. Gover- nor of Anambra State (1984) 1 S.C.N.L.R. 634, (1984) 6 g S.C. 153). The lower court can take judicial notice of the Bills of Exchange Act Cap 21 as an existing law. Order XXXIII High Court Rules made under section 85 High Court Law of Laws of Eastern Nigeria, 1963 applica- h ble then in 1986 in Rivers State provided that “XXXIII Rules 5 and 6” state as follows:– “5. Every pleading shall contain a statement of all the material facts on which the party pleading relies, but not the evi- i dence by which they are to be proved, such statement being divided into paragraphs numbered consecutively and each paragraph containing as nearly as may be a separate allegation. 6. The facts shall be alleged positively precisely and distinctly j and as briefly as in consistent with clear terms.” [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA 384 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Ayoola James v. Mid Motors Nigeria Co. Ltd (1978) 11/12 a S.C. 31, 63; NIPC v. The Thompson Organisation Ltd and others (1969) NMLR 99. The respondent pleaded exhibit 1 as a bank draft and led b evidence on it and by section 2(1)(c) Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990, a holder means:– “‘holder’ means the payee or endorsee of a bill or note who is in c possession of it, or the bearer thereof.” Applying the above to exhibit 1, the respondent falls within the definition of a holder. As the learned trial Judge should take judicial notice of the Bills of Exchange Act which de- d fines in section 2(1)(c) Bills of Exchange Act Cap 35 a draft as meaning:– “2(1)(c) A draft drawn by a banker upon himself and payable on demand at an office of his bank.” e It is my view that exhibit 1 applying the definition of a draft (supra) by case law and statutory law is a bill of exchange, being a bill under section 5(1)(2) Bills of Exchange Act Cap 35 (supra) wherein its section 2(1) defines:– f “bill’ means bill of exchange.’” From the foregoing and the excerpts of the judgment of the trial Judge at pages 88–91 of the record of proceedings already referred to above, the learned trial Judge was right in g his invocation of the Bills of Exchange Act and rightly applied it to the facts of this case and that the respondent was an holder and being an holder, it had the locus standi to institute this action. Being a finding of fact, the power and atti- h tude of an appellate court towards finding of fact is well settled from the plethora of the judgments of the Supreme Court and this Court succinctly puts that an appellate court is loathe and does not ordinarily form the habit of disturbing i the finding of fact by the trial court unless such finding is perverse – Ebba v. Ogodo (1984) 1 S.C.N.L.R. 372, Carlen (Nig.) Ltd v. UNIJOS and others (1994) 1 N.W.L.R. (Part 323) 631 S.C., (1994) 1 NA.C.R 125; Bonwu v. O.K. Iso- kariari and Sons (1994) 7 N.W.L.R. (Part 358) 587; j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 385 a Nwokoro v. Nwosu (1994) 4 N.W.L.R. (Part 337) 172 CA. (1994) 2 NA.C.R 13. Applying the above authorities to the instant appeal, I am b bold to say that the finding of the applicability of the Bills of Exchange Act and upholding the locus standi of the respondent as the holder of exhibit 1 granted it sufficient legal interest to maintain this action, therefore issue one is resolved c against the appellant that respondent lacked legal capacity to institute this action. The issues of privity of contract and negligence were subsumed by the provisions of the Bill of Exchange Act. This court has no legal justification or basis to disturb the finding of the learned trial Judge which d granted the locus standi to the respondent. The appellant in issue 2.2 and 2.4 contends in the alternative that should the court uphold the learned trial Judge to be right that the Bills of Exchange Act governed the transaction e then applying section 57 of the Bills of Exchange Act Cap 21 which is verba section 57 Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria stipulates as follows:– “57. Where a bill is dishonoured, the measure of damages, which f shall be deemed to be liquidated damages, shall be as follows:– (a) the holder may recover from any party liable on the bill, and the drawer who has been compelled to pay the bill, g may recover from the acceptor, and an endorser who has been compelled to pay the bill, may recover, from the acceptor or from the drawer, or from a prior endorser:– (i) the amount of the bill; (ii) interest thereon from the time of presentment for h payment if the bill is payable on demand, and from the maturity of the bill in any other case; and (iii) the expenses of noting or when protest is necessary and the protest has been extended, the ex- i penses of protest.” Section 57 (supra) is in pari materia with section 57 of the English Bills of Exchange Act of 1882 the measure of or category of damages as interpreted on a dishonoured bill are j only enumerated under the Act and no more. (See McGregor [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA 386 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. on Damages (13ed) paragraph 806 at page 551, (b) In Re: a English Bank of River Plate (1893) 2 Ch.D. 438 (c) Banque Populaire de Bienne v. Cave (1895) 1 Com Case 67). Therefore the only damages to which the respondent was b entitled under section 57 of the Bills of Exchange Act would be the amount of the draft (already paid in July, 1986), the interest thereon from the time of presentation for payment and nothing more. The award of general damages of c N75,000 against appellant was wrongly awarded and should be set aside by this Court. The appellant also raised this issue on 2.4 of its brief of argument. In response, respondent argued issues 2.2, 2.3 and 2.4 of d appellant’s brief of argument along issues No. 2, 3 and 4 of respondent’s issues together. The respondent submitted that having succeeded it was entitled to both special and general damages whether it was proved under contract, and or breach of duty or obligation reliance was put on Suit No.: e W/102/81 judgment of 11th June, 1982 by Akpata, J (as he then was). The learned trial Judge rightly held that a draft was a bill of exchange under the Bills of Exchange Act Reli- ance was put on cases of Salami v. Savannah Bank (supra); f Union Bank v. Nwoye (supra) and Balogun v. National Bank of Nigeria Ltd (supra). Though the learned trial Judge was clearly of the view and rightly so that special damages were recoverable he did not g award same on the ground that it was not proved before him. With respect, the learned trial Judge was in error which had been adequately covered by the brief in the cross appeal. With regard to cases of dishonour of draft, the damages h was not limited to section 57 of the Bills of Exchange Act, general damages are also recoverable as such general damages are treated to be at large, reliance was put on Yalaju Amaye v. Associated Registered Engineering Contractors i Ltd (1990) 4 N.W.L.R. (Part 145) 422 wherein the principle to guide the court on award of general damages was laid down. Applying the principle to the instant appeal the learned trial Judge was right in view of the losses of businesses with reputable companies like Texaco Nigeria Ltd, j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 387 a Unipetrol, Flopetrol and IGS. So this Court should uphold the award of N75,000 awarded as general damages by the learned trial Judge. This Honourable Court should reject the b contention of the appellants and dismiss the appeal on this point. The bone of contention is whether the only damages for the dishonoured draft exhibit 1 to which respondent was en- c titled was only as expressed in section 57 Bills of Exchange Act (supra) as contended by appellants whilst respondent submitted it was at large and included award of general damages. d Having held (supra) that respondent had the locus standi under the Bills of Exchange Act and as based on exhibit 1, the source of the action being a bill of exchange the court is thereby enjoined to consider the applicability of section 57 e Bills of Exchange Act. It is common ground that our section 57 Bills of Exchange Act is ipissima verba section 57 Bills of Exchange Act, 1882 of English Law. The Interpretation put on it is the beacon-light at interpretation of the said sec- supra f tion 57 ( ). Paragraph 502 of Halsbury’s Laws of England Volume 4 (4ed) is hereby reproduced at page 222 thus:– “502 Measure of Damages g The damages to be recovered are deemed to be liquidated damages (section 57 Bills of Exchange Act, 1882) and they may include:– (1) the amount of the instrument; (2) interest thereon, from the time of presentment for payment if the instrument is payable on h demand and from its maturity in any other case; the interest claimed by way of damages may, however, be withheld wholly or in part if the justice of the case so requires; and where the instrument is expressed to be payable with interest at given rate, interest as damages may or may not be given the same rate and (3) the ex- i penses of noting, or when protest is necessary, and the protest has been extended, the expenses of protest.” See also Chapter 28 Damages Byles on Bills of Exchange (23ed) page 347 wherein after reference to section 57 Bills j of Exchange Act (supra) it is noted as follows:– [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA 388 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

“Amount a The amount of the bill is the sum for which it is drawn and pre- sumably if the bill provides on the face of it interest, interest for the currency of the bill would be added. Such interest is recover- b able not as damages but as debt. It has long been held at Common Law that bills and notes specified to be payable with lawful interest carried interest from their date, whether payable after date or on demand or after the happening of an event certain to happen though the time of happening was uncertain. This is now declared c by the code.” See further on the measure of damages under section 57 Bills of Exchange Act, 1882 in paragraph 795 page 543 McGregor on Damages (13ed). d From the foregoing there is much force in the argument in the contention of the appellant that award and measure of damages under section 57 Bills of Exchange Act does not include award of general damages, what is permissible is e liquidated damage. The attack and complaint of the appellant on the judgment of the learned trial Judge raised the issue of an appellate courts attitude towards awards of general damages by the f trial court. The law is well settled as pronounced by the Su- preme Court in Union Bank of Nigeria Ltd v. Odusote Book- stores Ltd (1995) 9 N.W.L.R. (Part 421) 558 per Iguh, JSC at 585, 586 where it was held:– g “12. The general principle of law is that an award of general damages is a matter for the trial Judge and normally an appeal court will not interfere with such award unless:– (a) where the trial Judge has acted under a mistake of law; h (b) where he has acted in disregard of principle; (c) where he has acted under a misapprehension of facts; (d) where he has taken into account irrelevant matters or failed to take account of relevant matters; i (e) where injustice would result if the appeal court does not interfere; or (f) where the amount awarded is either ridiculously low or ridiculously high that it must have been a wholly erroneous estimate of the damage.” j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 389 a Applied and followed in Shell Petroleum Development Company (Nigeria) Ltd v. HRH Chief C.B.A. Tiebo VII and 4 others (for themselves and as representing Perembiri b Community, Yelga (1996) 4 N.W.L.R. (Part 445) page 657 at 688 CA; Ijebu Ode Local Government v. Adedeji Balogun and Co (1991) 1 N.W.L.R. (Part 166) page 136 S.C.; Nze- ribe v. Dave Engineering Co Ltd (1994) 8 N.W.L.R. (Part 361) 124 at 140 at 141. The Appeal Court is entitled to inter- c fere with award of damages made by a Judge where the circumstances calling for such an interference are shown to the court: Adeluyi v. Abidade (1975) 4 W.S.C.A 169; Solanke v. Ajibola (1969) 1 NMLR 253; Obere v. The Board of Man- d agement Eku Baptist Hospital (1978) 6–7 S.C. 15. Applying the above to the instant appeal the learned trial Judge acted under a mistake of law of the interpretation of section 57 Bills of Exchange Act Cap 21 and 35 (supra) by e awarding the sum of N75,000 as general damages on the dishonoured bill of exchange exhibit 1. The wrong approach calls in the circumstances of this case for an interference by this Court as in addition the sum of N75,000 was ridiculously too high by taking into consideration the alleged con- f tractual losses and loss of reputation based upon speculation as to the profit respondent would have made. Courts award general damages on sound legal principle and not on speculation, sentiments or as Father Christmas: Odumosu v. Afri- g can Continental Bank Ltd (1976) 11 S.C. 55 per Idigbe, JSC. For the foregoing reasons, this Court has no alternative than to interfere with the sum of N75,000 awarded as general damages based on mistake of law and wrong principle thereby giving this Court no alternative than the complaint h of the appellant is meritorious thereby setting aside the said sum of N75,000 as wrongly awarded. The contention of the respondent that the award of the sum of N75,000 general damages was rightly made is hereby rejected as devoid of i substance. I shall now proceed to consider the issue of complaint by the appellant on the award of N5,079.84 at the rate of 20% for the delay of six months on the sum of N50,798.47 cov- j ered by exhibit 1. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA 390 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The contention in issue 2.3 of appellant’s brief of argument a was that though under section 57 Bills of Exchange Act (supra) interest is awarded on the dishonoured bill is the rate paid on the sum of the bill from the time of presentment for b payment if the bill is payable on demand and from the maturity of the bill in any other case. The rate of interest must be proved strictly. The respondent submitted further that the interest is based under section 57 c Bills of Exchange (supra) on current or prevailing interest rate at the time of the transaction as stated in paragraph 804 at pages 549–550, McGregor on Damages (13ed). The respondent failed to establish the rate of interest of 20%. d Fourth PW opined in his evidence-in-chief that the rate of interest payable on a dishonoured draft was the same interest rate payable on a deposit account which in 1985 was 9½% per annum. As appellant requested respondent in April 1986 to represent exhibit 1 the respondent would be entitled to 4 e months period at the rate of 9½% per annum. The respondent conceded that the interest awarded should have been based on 9½% for six months. f It is trite law that the courts from time immemorial are re- luctant to award interests generally: London, Chatham and Dover Railway v. South Eastern Railway (1893) A.C. 429 thereby giving the rule of law that interest must not only be g pleaded but also strictly proved: Barclays Bank DCO v. Ye- sufu Alabi Adigun (1961) All N.L.R. 536. With respect, the respondent did not prove strictly the rate of interest, exhibits 16 and 16A were silent on the commis- h sion charged so as to assist the court in awarding the rate of interest actually charged on the transaction. The rate of interest is a special damage and must be proved strictly: Oshinjinrin v. Alhaji Elias (1970)1 All N.L.R. 153, Nzeribe i v. Dave Engineering Co Ltd (supra). The fourth PW testified in a cursory manner the rate of interest prevailing but subject to fluctuation and directive by the Central Bank of Nigeria, the complaint of the appellant is meritorious and justificiable the sum of N5,079.84 awarded at the rate of 20% for six j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 391 a months was not borne out from the evidence, as no shred of evidence was led on the Central Bank directive operative then. b Should I be found to have erred then as respondent was requested to represent exhibit 1 in April of 1986 by exhibit 3 but declined on the ground that it had already instituted the action against appellant in the High Court ran contrary to the c rule of law that a plaintiff must take all reasonable steps to mitigate the loss to him consequent upon the defendant’s wrong and cannot recover damages for any such loss which he could thus have avoided but has failed, through unrea- d sonable action or inaction to avoid. Put shortly, the plaintiff cannot recover for avoidable loss culled from paragraph 205 page 145 on Mitigation of Damage, McGregor on Damages, (13ed), based on this rule then respondent shall only be entitled to 4 months at the rate of 9½% on assumption that I was e wrong in dismissing the claim of interest as not strictly proved. Issue 2.5 appellant’s brief of argument and also issue 3.5 are similar as to whether the long adjournments between the f final addresses and when judgment was delivered the learned trial Judge could not have properly evaluated the evidence led before him and whether this must have occasioned a miscarriage of justice. g Section 258(1) 1979 Constitution of Nigeria provides as follows:– “258(1) Every court established under this Constitution shall deliver its decision in writing not later than 3 months af- h ter the conclusion of evidence and final addresses and furnish all parties to the cause or matter determined with duly authenticated copies of the decision on the date of the delivery thereof.” i It is common ground that evidence and final addresses of delivery of judgment between 10th April, 1987 and 5th Oc- tober, 1987 was about 6 months and exceeded and fell outside the 3 months statutory period stated in section 258(1) j 1979 Constitution: Ijebu Ode Local Government v. Adedeji [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA 392 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Balogun and Co (1991) 1 N.W.L.R. (Part 166) 136; Ifezue v. a Mbadugha (1984) 5 S.C. 79; (1984) 1 S.C.N.L.R. 427 any violation of section 258(1) of 1979 Constitution was interpreted by the strict constructionists to render the judgment b invalid. The injustice of the strict interpretation became obvious which led to amending the rigours of the strict interpretation by section 258(4) that non-compliance shall not automatically render judgment that breached the 3 month statutory period of delivery of judgment a nullity but the ap- c pellate court shall look at the reason given for the delay and whether the delay has occasioned miscarriage of justice if it does then, the case shall be remitted to the lower court for a retrial de novo instead of the voidity of the judgment. d In the instant appeal no reason was given for the cause of the delay but as the case turned out mainly on the interpretation of the Bills of Exchange Act with the supportive documentary exhibits 1 to 16 and 16A that the vision of the e learned trial Judge was not blurred and has not occasioned miscarriage of justice. The complaint though valid but as the Court of Appeal is to do substantial justice and not too much attachment to technicality which invariably leads to injus- f tice: The State v. Gwonto and others (1983) 1 S.C.N.L.R. 1421 hold that the delay in delivery of judgment within 3 months is saved as it has not occasioned miscarriage of justice. g Having regard to the thorny and complex thin wedge between a respondent’s notice under Order 3 Rule 14(1) Court of Appeal Rules and filing a cross appeal highlighted and expatiated upon in the case of Chief F.R.A. Williams v. Daily h Times of Nigeria Ltd (1990) 1 N.W.L.R. (Part 124) 1 S.C. The respondent opted to file a cross appeal per its notice of appeal at pages 109 to 111 of the record of appeals proceedings wherein 2 grounds of appeal with their particulars were i furnished. Hereinafter the respondent is referred to in this part of the judgment as cross-appellant whilst the appellant henceforth is referred to in this part of the judgment as cross-respondent. It is pertinent to state that a cross appeal is treated like a counterclaim in court of trial. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 393 a In the cross appeal at page 3 paragraph 3 cross-appellant from the grounds of appeal of the cross appeal formulated the under-mentioned issues as the issues germane in the b cross appeal in cross-appellant’s brief of argument filed in this Court on 18th May, 1990 which was adopted and relied upon in arguing the cross appeal. The issues are:– c “3. Issues for determination It is submitted that issues for determination in this appeal are as follows:– 1. Whether the trial court was right in refusing to award the d sum claimed in respect of supply of machinery to I.G. In- dustrial Construction Nigeria Ltd on the ground that the amount claimed was the gross sum and not net sum. 2. Whether the trial court was right in not making reasonable deductions from the hire rate (representing expenses) and e thereafter awarding the balance to plaintiff as net sum. 3. Whether the trial court was right in refusing the sums claimed in respect of Texaco contracts pleaded in paragraph 12(ii), (iii) and (iv) of the statement of claim on the ground that there were no particulars as to how the profit was cal- f culated and arrived at were pleaded and given in evidence. 4. Whether there was sufficient traverse of and challenge to paragraph 12(ii) (iii) and (iv) of the statement of claim by the defendant. g 5. Whether there was sufficient traverse of and challenge to paragraphs 13 and 14 of the statement of defence (sic) claim by the defendant.” In reply, the cross-respondent in its cross-respondent’s brief h of argument filed in this Court on 9th August, 1990, adopted and relied upon by learned Counsel for cross respondent in arguing the cross appeal. At page 2 of the cross-respondent’s brief of argument in the cross appeal raised from the grounds of appeal in the cross appeal, the under-mentioned i issues as the issues that arose for determination in this cross appeal:– “2.0 Issues for Determination 2.1 Whether there was specific or general traverse of para- j graphs 12, 13 and 14 of the further amended statement of [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA 394 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

claim by paragraphs 8 and 9 of the amended statement of a defence. 2.2 Whether from the pleadings and evidence led the learned trial Judge was right in refusing the special damages b claimed in paragraphs 12(ii)(iii) and (iv) and 13(i) and (ii) of the further amended statement of claim”. Under our adversarial system of jurisprudence based upon the rule of fair hearing of audi alteram partem, each person c be it a party or witness, must have a pre-knowledge or information of what he or she is coming to say in court and be prepared to prepare his or her defence rather than be groping in the dark. The procedure for intimating and forewarning of the party is by setting out the facts in the pleadings of the d party as required under the High Court Civil Procedure Rules of each state. It is this pre-eminent position that pleadings play in our civil jurisprudence that clothed it as the bed rock, foundation, and cornerstone in our civil jurisprudence e giving it the cloak that a case succeeds or fails on the pleaded fact and led to the rule that both the courts and the parties are not only bound by the pleaded facts in the pleading but also that unpleaded facts go to no issue, and evi- f dence based on unpleaded facts are to be expunged from the record if wrongly admitted both by the trial court and the appeal court: Abimbola George and others v. Dominion Flour Mills Ltd (1963) 1 S.C.N.L.R. 242; (1963) 1 All g N.L.R. 71 at 77; Ferdinand George and another v. UBA Ltd (1972) 8/9 S.C. 264, (1972) (Part 2) 1 All N.L.R. 347; Akin- folarin v. Akinnola (1994) 3 N.W.L.R. (Part 335) 659 S.C.; Ojo-Osagie v. Adonri (1994) 6 N.W.L.R. (Part 349) 131 S.C.; Aeroflot v. UBA (1986) 3 N.W.L.R. (Part 27) 188 S.C.; h Ebe Uka and another v. Chief Kalu Okorie Irolo and 5 others (1996) 4 N.W.L.R. (Part 441) 218 CA. In considering the cross appeal with respect, learned Coun- i sel for the cross-appellant in the order or arrangement or formation of its issues for determination put the cart before the horse, in that, consideration of evidence must be placed on pleaded fact as stated above. In issues 3, 4 and 5 in cross- appellant’s brief raised the issue of pleadings and j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 395 a joinder of issues by the parties. It is the rule of law that it is when issues have been properly joined by the parties that evidence can be led to establish the pleaded facts. The b proper or appropriate approach in the determination of the cross appeal is to consider the issue raised in the pleadings first before consideration of the evidence. Therefore, the method formulated by the cross-respondent is the better approach by considering the issue of pleadings first before the c evidence. So the issues formulated by the cross-respondent are the issues accepted for consideration in this cross appeal. In line with the attitude of this Court the issues distilled by the cross-appellant shall be considered along with the issues d raised by the cross-respondent. Issue 1 raised in cross-respondent’s brief in the cross appeal is same and similar to issues 3, 4 and 5 of cross- appellant’s brief. Succinctly put whether there had been e proper traverse of paragraphs 12(ii), (iii) and (iv), 13 and 14 the further amended statement of claim by paragraphs 8 and 9 of the amended statement of defence. The relevant averments in the statement of claim and the statement of defence f were already reflected above in this judgment. They are not set down again for avoidance of repetition. So also set up above in this judgment are Order XXXIII Rules 5 and 6 of High Court Rules of former Laws of Eastern Nigeria, 1963, in particular Rule 6 on how facts are to be stated, alleged g positively, precisely and consistent with a clear statement in plaintiff’s pleadings. Order XXXIII Rules 9, 10 and 11 High Court Rules, 1963 h (supra) applicable during trial read as follows:– “(9) The defendant’s pleading or defence shall deny all such material allegations in the petition as the defendant intends to deny at the hearing. Every allegation of fact, if not denied specifically, or by necessary implication or stated to be not i admitted, shall be taken as established at the hearing. (10) It shall not be sufficient to deny generally the facts alleged by the statement of claim but the defendant must deal specifically, therewith, either admitting or denying the truth of j each allegation of facts seriatim as the truth or falsehood of [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA 396 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

each is within knowledge or (as the case may be) stating a that he does not know whether such allegation or allegation is or are true or otherwise. (11) When a party denies an allegation of fact he must not do so evasively, but answer the point of substance. And when a b matter of fact is alleged with diverse circumstances it shall not be sufficient to deny it as alleged along with those circumstances, but a fair and substantial answer must be given.” c The above was judicially considered by Idigbe, JSC in Lewis and Peat (NRI) Ltd v. A.E Akhimien (1976) 7 S.C. 157; (1976) 1 All N.L.R. (Part 1) 460 that:– “When as a result of exchange of pleadings by parties to a case a d material fact is affirmed by one of the parties but denied by the other, the question thus raised between the parties is an issue of fact. To raise such issue there must be a proper traverse. A proper traverse must be a specific denial or a specific non-admission. A paragraph in a statement of defence that ‘the defendant is not in e a position to admit or deny . . . and will at the trial put the plaintiff to proof’ amounts to insufficient denial. A general traverse or general denial usually contained in the first paragraph of every statement of defence or else used as a preamble f ought not to be adopted in respect of essential and material allegations in the statement of claim.” Adopted by Oputa, JSC in Chief Mrs Faderera Akintola and another v. Mrs C.F.A. Dedeke-Solano (1986) 2 N.W.L.R. g (Part 24) page 598. Now recently held by the Supreme Court in Gbaniyi Osafile and another v. Paul Odi and another (1994) 2 N.W.L.R. (Part 325) 125 at 136, 137 and 138 that:– h “6. An averment in a statement of defence that the defendant is not in a position to admit or deny an averment in the statement of claim amounts to insufficient denial (Atolagbe v. Shorun (1985) 1 N.W.L.R. (Part 2) 360; Akintola v. Solano (1986) 2 N.W.L.R. (Part 24) 598 referred to. i 7. A general traverse contained in a statement of defence has however been recognized and convenient and permissible. In short it is a traverse. The effect of a traverse is to cast upon the appellant the burden of proving the allegations denied. In the instant case, the plaintiff’s averments in j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 397 a paragraphs 5, 6 and 7 of the amended statement of claim have been validly denied by a general traverse contained in the respondents’ traverse contained in the respondent’s statement of defence.” b See also and further Oba Goriola Oseni and 14 others (for themselves and on behalf of the people of Iba) v. Yakubu Dawodu and 2 others (For themselves and on behalf of Ilogbo-Elegba Community) (1994) 4 N.W.L.R. (Part 339) c 390 at 410 and 415 S.C., wherein it was held:– “3. The rule of pleadings is clear. In order to raise an issue of fact there must be a proper traverse. If a defendant refuses to admit a particular allegation in a statement of claim, he d must state so expressly and specifically and he does not do this satisfactorily by merely pleading that he is not in a position to admit or deny a particular allegation and or that he will at the trial put the plaintiff to the strictest proof thereof.” e In the instant case, the respondents in paragraph 1 of their amended statement of claim pleaded the capacity in which the first respondent brought the action. The appellants in their reply pleaded that they were not in a position to admit f or deny the same. Paragraph 1 was therefore not effectively or successfully traversed and on the state of the authorities, it must be deemed as admitted (Lewiseat (NRI) Ltd v. Akhimien (1976) 7 S.C. 157, Nwadike v. Ibekwe (1987) 4 g N.W.L.R. (Part 67) page 718 at 741, Owosho v. Dada (1984) 7 S.C. 149 at 183 referred to). Applying the above (lines 6–32 page 59) of court and the authorities to the instant cross appeal, cross-respondent h averred a general traverse and in its paragraphs 8 and 9 of the statement of defence, denied paragraphs 12, 13 and 14 of the statement of claim for emphasis though already reflected above they read as follows:– i “8. The defendant denies the allegations contained in paragraph 12 and all its subsections and will subject the plaintiff to the strictest proof of his averments therein.” The defendant will show that there was no loss of goodwill j from Texaco suffered by the plaintiff. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA 398 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

“9. The defendant denies the averments in the whole of para- a graphs 13 and 14 of the statement of claim and will show at the trial of this suit that they are speculative statements.” It is crystal clear that the cross-respondent denied the aver- b ments of paragraphs 12, 13 and 14 of the statement of claim (supra) and did not plead that it was not in a position to admit or deny the said averments which mode of pleading had been declared ineffective in all the authorities referred to c above. The pleadings in paragraphs 8 and 9 of the statement of defence were legally justifiable, positive traverse, aptly averred thereby in agreement with the trial court that the cross-respondent validly joined issues with the cross- appellant on the facts pleaded in paragraph 12, 13 and 14 of d the statement of claim. The complaints and attack on the judgment of the learned trial Judge is unmeritorious and lacks substance. This court rejects the complaints on issues 3, 4 and 5 in cross-appellants issue for determination, lead- e ing to dismissal of the cross appeal on the issues so raised. Be that as it may, this Court proceeds to consider issues 1 and 2 in cross-appellant’s issues for determination and issue 2.2 in cross-respondent’s issues for determination in the f cross appeal. After a careful consideration of the said issues having confirmed the finding of the learned trial Judge earlier in the appeal that the applicable law was the Bills of Exchange Act g Cap 35 Laws of the Federation of Nigeria, 1990 the applicable law of measure or award of damages is section 57 Bills of Exchange Act which was considered exhaustively in this appeal, there has been no new circumstances to depart from h the earlier position taken on this point. Having so held the issue of special damages and general damages raised in the cross appeal are merely academic and this Court like the Su- preme Court frowns at academic exercise: Ariori v. Elemo i (1983) 1 S.C.N.L.R. 1; (1983) 1 S.C. 30, Nkwocha v. Gov- ernor of Anambra State (1984) 1 S.C.N.L.R. 634; Coker v. Olukoga (1994) 2 N.W.L.R. (Part 329) 648. As a consequence the issues so contended by the cross-appellant are unmeritorious and rejected. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA Union Bank of Nigeria Plc v. Scpok Nigeria Ltd 399 a Assuming which is unaccepted that I was wrong, I would still have come to the same conclusion like the trial Judge that the cross-appellant did not establish the special and gen- b eral damages being findings of fact by the lower court. Be- ing an appellate court I am bold to say after a careful and hard look at the pleadings, evidence and ascription of the evidence that the findings of the learned trial Judge dismissing the special and general damages were aptly and legally c justifiable having been borne out from the evidence. The findings of fact in my candid view are not perverse. Being an appellate court there is no legal basis to disturb the findings of fact which in any event was made out of caution as d the applicable law for the award of damages for dishonour of exhibit 1 is section 57, Bills of Exchange Act and not the common law actions based on breach of contract and or negligence as I still maintain that they are academic issues. e For the foregoing, the cross appeal is unmeritorious, lacking in substance and merit, leading irresistibly to the dismissal of the cross appeal. Finally, for the reasons adumbrated above the appeal of the f appellant is hereby allowed, whilst the cross appeal is dismissed as lacking substance. The judgment of Hon. Justice P.G. Okara, J, of the Rivers State High Court, Port Harcourt delivered on 5th October, 1987, is hereby set aside so also g the award of N75,000 as general damages and N5,079.84 awarded as interest on N50,798.47 at the rate of 20% is dismissed. Should I be found to be wrong, the rate of interest is to be fixed at the rate of 9½% from April, 1986 to July, 1986, when the value for exhibit 1 was paid to the respon- h dent. Having succeeded in the appeal, the appellant following the rule of law that costs follow the event and awarded at the i discretion of the court acting judicially and judiciously the appellant is entitled to costs of the appeal and having dismissed the cross appeal and cross-respondent is also entitled to the cost of the cross appeal. In fixing the cost, it is awarded to compensate the successful party and not to pun- j ish the unsuccessful party, so guided, acting judicially and [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, PORT HARCOURT DIVISION) Uwaifo JCA 400 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. judiciously I award the sum of N1,000 as costs in the court a below in favour of the appellant against the respondent. The appellant is awarded N2,000 as costs of this appeal against the respondent. b As the cross appeal was dismissed, the appellant/cross respondent is awarded N1,000 as costs of the cross appeal against respondent/cross appellant. For the avoidance of doubt, the appellant is awarded the cumulative costs of c N4,000 against the respondent. OKEZIE JCA: I have had the privilege of reading in draft the judgment just delivered by my learned brother, Onalaja, JCA, and I agree with his reasoning and conclusions. The d appellant has established through cogent evidence his case. This I agree is enough to obtain judgment in his favour. I agree also with my learned brother that the cross appeal is without merit and ought to be dismissed. Consequently, I e too hereby dismiss the cross appeal and reverse the judgment of the trial High Court. The appellant/cross-respondent is awarded N1,000 as costs of the cross appeal against respondent/cross-appellant. The f appellant is awarded the cumulative costs of N4,000 against the respondent. ROWLAND JCA: I have had the advantage of reading, in draft, the lead judgment of my learned brother, Onalaja, JCA g which has just been delivered. I am in complete agreement with him. The learned trial Judge was not in error when he held that the applicable law is the Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 and the applica- h ble law of measure or award of damages is section 57 Bills of Exchange Act which was exhaustively considered in this appeal. Having said that, it seems to me that the issue of special and general damages raised in the cross appeal are merely academic and therefore lack merit and substance. I i too, dismiss the cross appeal. The appeal of the appellant is therefore allowed. I endorse the order as to costs in the lead judgment. Appeal allowed. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION)

Union Bank of Nigeria Ltd v. Simon Osezuah and Others 401 a Union Bank of Nigeria Limited v. Simon Osezuah and Others b COURT OF APPEAL, BENIN DIVISION NSOFOR, AKINTAN, IGE JJCA Date of Judgment: 19 JULY 1996 Suit No.: CA/B/11/95 c Banking – Confirmed letters of credit – Meaning of Banking – Confirmed letters of credit – Nature of Banking – Irrevocable letters of credit – Amendment or cancellation thereto – When can be done d Banking – Irrevocable letters of credit – Nature of

Facts e The plaintiffs/respondents claims against the defendant/ appellant as follows:– “1. A Declaration that the second plaintiff is not owing the defendant any sum of the overdraft Account/Loan Facilities granted to the second plaintiff by the defendant on the 28th f February, 1986 or any sum whatsoever. 2. An Order for the return to the first and second plaintiff the Title Deeds which the first plaintiff deposited with the defendant as security for a loan/overdraft for the second plain- g tiff (by virtue of the Deed of Legal Mortgage Registered as 8/8/617 at the Lands Registry, Benin City) which has been repaid fully. The defendant has refused or failed to surrender to the first plaintiff the said title deeds despite repeated demands by the first and second plaintiffs. h 3. Damages:– (a) Special damages: The sum of N30,000 per annum from 30th August, 1987 till judgment as special damages (sic) for wrongful detention by the defendant to secure over- i draft facilities or in the alternative the sum of N30,000 per annum from 30th August, 1987 till judgment for the loss (sic) of profit/loss of use occasioned (sic) by the defendant’s failure to release first plaintiff’s Title Deeds for use to secure loan by the second plaintiff. j (b) General damages: N60,000.” [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION)

402 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The second named plaintiff, Osezuah and Co (Nigeria) Lim- a ited (hereinafter to be referred to simply, as the “Company” for short) was a customer of the Union Bank of Nigeria Lim- ited, the defendant (hereinafter to be referred to simply as b the “Bank” for short). The Company kept an account with the Bank. Desirous of buying and importing some dry- cleaning equipments from MOE and Stoll International Inc., a United States of America based Company, (hereinafter to be referred to simply, as the “Overseas Suppliers” for short) c approached the Bank to help and assist it (the Company) handle the International Trade transaction with the “Over- seas Suppliers”. It (the Company) applied to the Bank for an overdraft facility to the tune of N60,000 (Sixty Thousand d Naira). It was approved or granted. For a collateral security, Simon Osezuah, the Company’s shareholder and Managing Director executed a Deed of Legal Mortgage of his property with the Bank. The Deed was registered as “8/8/617” in the e Land Registry. The Overseas Suppliers opened and sent to the Company their proforma invoices – (three of them) Nos 81–006A, 82,008 and 82,009–9A (exhibits A–A3). The values of the f equipments as per the proforma invoices were in the United States of America Dollars, what in International Trade, was the “Money of Account”. The total value was U.S.$64,590 (Sixty Four thousand, Five hundred and Ninety U.S. Dol- g lars). Consequently, the Bank opened Irrevocable Letters of Credit, (L.C.) Nos. 37/82, 40/82 and 41/82 for or on behalf of the Overseas Suppliers (exhibits “B to B5”). h The opened irrevocable letter of credit had on the reverse side an indemnity clause which the Company signed. The goods arrived in Nigeria. Some of the goods were defective i while others did not meet the specification. Consequently, the Company then wrote to the Bank to stop any payment to the Overseas Suppliers. This order was declined by the Bank on grounds that funds had already been released to the Over- seas Suppliers. The Company then demanded the return of j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION)

Union Bank of Nigeria Ltd v. Simon Osezuah and Others 403 a its title deeds. The Bank refused. The Company asserted that the refusal of the Bank to release its title deeds prevented it from obtaining a credit facility from Allied Bank for pur- b poses of expansion of its business. The Bank denied wrongly crediting the Company’s account and also denied detaining the Company title deeds. In a well considered judgment the Trial Court found for the plaintiffs. c Dissatisfied, the defendant appealed to the Court of Ap- peal. Held – 1. The Buyer who, pursuant to his sales contract instructs d his banker to issue a credit, undertakes impliedly or expressly to put the banker in funds to meet a payment under it if the documents against which the banker pays were what the Buyer calls for; and where he does so e provide funds the banker is bound to apply them to the purpose to which they are appropriated. Normally, and in the absence of any express agreement to the contrary, the banker on paying under the credit debits the Buyer’s f account. The banker must comply rigidly with his instructions and where he does, he is entitled to the indemnity of an agent. 2. The banker’s undertaking under an irrevocable or con- g firmed credit is absolute. An irrevocable or confirmed credit which has been advised to the beneficiaries cannot be cancelled at the instance of the Buyers. 3. The opening of confirmed letters of credit constitutes a h bargain between the Bank and the Vendor of the goods, which imposes upon the bankers an absolute obligation to pay. Once a credit has been communicated to the beneficiary, the Buyer cannot amend without the benefi- i ciary’s consent, nor can the issuing banker, at the instigation of the Buyer, force an amendment on the intermediary Buyer. 4. The sale of goods across the World is now usually j arranged by means of confirmed credits. The buyer [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION)

404 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

requests his banker to open a credit in favour of the a Seller and in pursuance of that request, the banker, or his Foreign agent, issues a confirmed credit in favour of the Seller. This credit is a promise by the banker to pay b money to the Seller in return of the shipping documents. Then the Seller, when he presents the documents, gets paid the contract price. The conditions of the credit must be strictly fulfilled, otherwise the Seller would not be en- c titled to draw on it. 5. Strictly speaking, a confirmed credit is an irrevocable credit. The Law, therefore, governing commercial letters of credit is largely the law of contract and agency. d Appeal allowed.

Cases referred to in the judgment Nigerian e Buraimoh v. Bamgbose (1989) 3 N.W.L.R. (Part 109) 352 Kalio v. Kalio (1975) 2 S.C. 15 Kodilinye v. Odu (1935) 2 WA.C.A 336 f Modupe v. State (1988) 2 N.W.L.R. (Part 87) 130 Mogaji v. Odofin (1978) 4 S.C. 91 National Investment and Properties Co Ltd v. Bank of West Africa Ltd (1962) 2 S.C.N.L.R. 324 g Odudu v. Atoyebi (1987) 2 N.W.L.R. (Part 58) 660 Okpala v. Ibeme (1989) 2 N.W.L.R. (Part 102) 208 Omonfoman v. Okoeguale (1986) 5 N.W.L.R. (Part 40) 179 h Foreign General and Finance Facilities Ltd v. Cooks Cars (Ram- ford) Ltd (1963) 1 W.L.R. 644 i Hadley v. Baxendale (1843–60) All E.R. Rep. 461 Pavia and Co S.P.A. v. Thurmann Neilsen (1952) 2 QB 84 at 88 Rosenthal v. Alderson and Sons (1946) 1 K.B. 374 j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION)

Union Bank of Nigeria Ltd v. Simon Osezuah and Others 405 a Nigerian statute referred to in the judgment Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990 Sections 135, 136 and 149(c) b Books referred to in the judgment Littleton S. 667 Paget’s Law of Banking, 8th Edition, Page 643 c Counsel For the appellant: Akhidenor L.O. (with him Akhigbe S.W.) d For the respondents: Imadegbelo I.E. (with him Fregene A.O.E. and Osibhal)

Judgment e NSOFOR JCA: (Delivering the lead judgment) This appeal is of particular interest, in my respectful opinion. For one thing it does raise for consideration an aspect of the Law of Inter- national Trade of general interest. f Osezuah and Co Nig. Ltd (hereinafter to be referred to simply as “the company” for short), the second respondent in the case giving rise to the present appeal, was or is a customer of the Union Bank of Nigeria Plc. The company, a g major dry cleaning business in Benin City. Now, in modern day international trade men of business or rather business- men seek for and engage bankers or banks as intermediaries to transact their business internationally. h So, the company plaintiff desirous of dealing with MOE and Stoll International Inc., a United States of America Company (hereinafter to be referred to as “the Overseas Suppliers”) to import some dry cleaning equipment enlisted i the services of Union Bank of Nigeria Plc (the Issuing Bank) in the business transaction to provide it (the company) with the necessary commercial credits a common feature in such international business transaction or contracts. The Issuing j bank never, however, handles the goods, the subject matter [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 406 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. of the contract or business for the buyer (herein the company a plaintiff). It (the issuing Bank) handles and deals in “documents” as between the seller and the buyer. Simon Osezuah (the first plaintiff) is however, a shareholder and a Managing b Director to the Company. But where does the above lead me to? It does lead me and enables me to say straightaway that the relationship arising or being created between the company plaintiff and the c Overseas Suppliers arises ex-contractu between the two of them only. It is in International Trade relationship of a “Principal” and an “Agent” between the company plaintiff being the principal and the issuing bank the Agent and this is apart from the banker/customer relationship existing be- d tween the parties as the bank and the customer. In merely furnishing collateral security for the opening of Irrevocable Letters of Credit and/or for a loan or overdraft facility, as a security to the Issuing bank, the guarantor is, in my view, no e party in the contract or in the International Trade business between the company plaintiff (with its the Issuing Bank Agent) and the Overseas Suppliers MOE Stoll International Inc. of America. No. And this becomes necessary for what I f may be disposed to say ut infra for the avoidance of a doubt. Simon Osezuah executed as a “guarantor” to the company plaintiff a Deed of Legal Mortgage on behalf of the issuing Bank i.e. the appellant herein. See page 114 of the record. g The present appeal, therefore, arises from this international trade relationship between the plaintiff company and the overseas supplier in which the Union Bank of Nigeria Plc acted for the company plaintiff. It is an appeal from the h judgment of A.A. Agun, J in Suit No. B/86/87. The judgment was given on the 10/12/93. The suit giving rise to the action was commenced by or with a writ of summons filed on 13/10/87. Consequent upon the order by court, the parties filed and exchanged their respective original pleadings. i They later amended their pleadings. The pleading were finally settled at the “Second Further Amended Statement of Claim” and the “Further Amended Statement of Defence. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Ltd v. Simon Osezuah and Others 407 a Now, since a statement of claim supersedes the writ, id est, the endorsement on the writ of summons, I advert to paragraph 49 of the second further amended statement (hereinaf- b ter to be referred to, simply as “the claim for short”) for what reliefs the plaintiffs claimed against the defendant. See Lahan and others v. Lajoyetan and others (1972) 6 S.C. 190 Paragraph 49 of the claim is in the following terms. Whereof c the first and second plaintiff’s claims (sic) as follows:– “1. A declaration that the second plaintiff is not owing the defendant any sum on the overdraft account/loan facilities granted to the second plaintiff by the defendant on the 28/2/86 or any sum whatsoever. d 2. An order for the return to the first and second plaintiffs the Title Deeds which the first plaintiff deposited with the defendant as security for a loan/ overdraft for the second plaintiff (by virtue of the Deed of Legal Mortgage Registered as e 8/8/617 at the Lands Registry, Benin City) which has been repaid fully, the defendant has refused or failed to surrender to the first plaintiff the said title deeds despite repeated demands by the first and second plaintiffs. 3. Damages:– f (a) Special damages: The sum of N30,000 per annum from 30th August, 1987 till judgment as special damages (sic) for wrongful detention by the defendant to secure overdraft facilities or in the alternative the sum of N30,000 g per annum from 30th August, 1987 till judgment for the loss (sic) of profit/loss of use occasioned (sic) by the defendant’s failure to release first plaintiff’s Title Deeds for use to secure loan by the second plaintiff. h (b) General damages N60,000. 4. Further or other reliefs. Dated at Benin City this 7th day of November, 1989.” Note (1) I confess, I am totally ignorant of what the fourth i head of the claim (i.e. “paragraph 49(4) of the claim”) connotes or is intended to mean. The case came on before the learned trial Judge on the 27/6/89 for hearing. The plaintiffs testified in line with their j joint pleadings. Thereafter, they summoned the evidence of [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 408 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. some other witnesses and then closed their side of the case. a The Union Bank of Nigeria Plc was represented during the trial by its officer, one Sunday Umakaye Romun. The defendant Bank had testified through Sunday Umakaye Romun b with whose testimony it closed its case. The learned trial Judge, having received all the available evidence both oral and documentary legally receivable and legally received, received the final oral addresses by the c Counsel. Thereafter, he reserved his judgment till the 26th Novemeber, 1993. The judgment eventually delivered on the 10th December, 1993. In a reserved and well considered judgment, the learned d trial Judge found for the plaintiffs. He wrote in page 96 of the record of appeal, inter alia:– “In the final analysis the plaintiff’s claim substantially succeeds and all the declaration sought in paragraph 49(1), (2), (3)(a)(b) of the plaintiffs’ amended statement of claim are (sic) hereby allowed e to (sic) as follows:– 1. The defendant is hereby ordered to return to the first and second plaintiffs the Title Deeds which first plaintiff deposited with the defendant by virtue of Deed of Legal Mortgage f registered as 8/8/617 at the Lands Registry, Benin City. 2. In addition, the plaintiffs in all are entitled to judgment in the sum of N250,000 (Two hundred and fifty thousand naira) made up as follows:– By way of special damages: g (a) The sum of N180,000 (One Hundred and Eighty Thousand naira) loss of profit from 30th August, 1987 to 30th August, 1993 at N30,000 (Thirty thousand naira) per annum N180,000 h (b) From 30th August, 1993 to 30th Novem- ber, 1993 the sum of ten thousand naira N 10,000 N190,000 y way of general damages: i (a) Loss sustained as a result of first plaintiff title document N 60,000 Total N250,000 (Two hundred and fifty thousand naira) j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Ltd v. Simon Osezuah and Others 409 a I assess the costs at N2,000 (Two thousand naira) against the defendant in favour of the plaintiffs. Sgd. A.A. Agun b (Judge) Friday 10th December, 1993.” Dissatisfied and aggrieved with the judgment, the defendant has, naturally and logically appealed to the Court of Appeal, c originally on three grounds of appeal. The “Notice of Ap- peal” together with the “Grounds of Appeal” was filed on the 25/2/94. It is copied in pages 117 to 119 of the record. The three original grounds of appeal, shone of their respective “Particulars of Error” respectively are:– d “Grounds of Appeal 1. The judgment is against the weight of evidence. 2. The learned trial Judge erred in law and fact when he held as follows:– e “In the instant case in view of the recklessness and nonchalant manner the defendant operated the second plaintiff account, I am of the firm and considered view that a claim of N60,000 (Sixty thousand naira) per annum is f not unreasonable and staggering in all its circumstances.” 3. The learned trial Judge did not properly evaluate and appraise the evidence led before it (sic) but took into consideration matters not connected with the operation of letters of g credit and banking practice. See Baba v. N.C.A.T.C. (1991) 5 N.W.L.R. (Part 192) 388.” Subsequently, the defendants sought for and obtained leave of court to file further or additional grounds of appeal; in h terms of exhibit A, exhibited in the application for leave dated the 9th of March, 1995. The additional grounds of appeal filed were numbered serially and consecutively as “(1) and (2).” i I shall set them down, again, shone of their respective “Particulars of Error” to avoid prolixity. They are:– “Additional Grounds of appeal:– 1. The learned trial Judge erred in law for using inadmissible j evidence exhibit Y in arriving at the award of N30,000 per [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 410 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

annum from 30th August, 1987 till judgment for loss of use a occasioned by the defendant’s failure to release first plaintiff’s deeds for use to secure loan by the second plaintiff. 2. The learned trial Judge erred in law in failing to arrive at the b conclusion the defendant’s (sic) acted in consonance with their normal course of business as envisaged in section 149(c) of the Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990.” So, there were altogether three original grounds of appeal c plus two additional grounds filed in challenge to the judgment – a total, therefore, of five grounds of appeal raised. But apparently, the numbering of both the original and the additional grounds of appeal filed is bound to be confusing. d Clearly, most certainly there has been a duplication in the numbering. That ought not to be so. The proper method of numbering any further or additional grounds of appeal raised is to number them consecutively and serially with the origi- e nal grounds of appeal filed. Thus, the confusion and the duplication of numbers are avoided. See Omonfoman v. Okoeguale (1986) 5 N.W.L.R. (Part 40) 179; William Odudu v. Ademola Atoyebi (1987) 2 N.W.L.R. (Part 58) 660. f The defendants at the trial are herein the appellant. The plaintiffs in the court below, are the respondents herein. In compliance with the rules of the Court of Appeal, 1981, the parties had filed and exchanged their briefs of arguments. g Therein each party had formulated for determination the issues. The appellants formulated in page 2 of their brief the following five (5) issues:– “Issues which arise for determination h 3.1. Whether the trial court was right in awarding N60,000 general damages on a contract for which such penalty was not provided, nor was negligence, recklessness and nonchalant manner of operating the account pleaded and having regard i to the evidence before court. 3.2. Whether the court properly evaluated the evidence so to make this award both special and general damages in a contractual relationship between the parties, the one being a mortgage involving banker/customer relationship. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Ltd v. Simon Osezuah and Others 411 a 3.3. Whether the trial court was right to have relied on the evidence connecting the feasibility report, the same being inadmissible as contrary to section 91(3) of the Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990 even b though there was no objection to its admissibility, the feasibility report having been produced when litigation was contemplated by the first and second plaintiffs. 3.4. Whether the trial Judge considered at all section 149(c) of c the Evidence Act that the common course of business has been followed in the account presented by the appellant. 3.5. Whether the trial court adequately considered the law as to opening of irrevocable letters of credit and other matters relating to enteries into any banking account especially the d one relating to the second plaintiff.” The respondent on their part had, in page 5, “paragraph 3.1.” formulated for determination the following two (2) issues immediately set down:– e “Issues for determination (i) Whether the learned trial Judge was right in holding that the defendant was Estopped from denying the fact that funds covered by irrevocable letters of credit were released to the f beneficiaries in 1983 based on defendants representations in exhibits “F” and “M”. (ii) Whether the learned trial Judge was right in the award of special and general damages to the plaintiffs.” g This appeal came on for the hearing before us on the 22/5/96. At the hearing, Mr L.O. Akhidenor for the appellant had adopted the appellant’s brief of argument deemed properly filed and served on the 26/6/95. He relied on the brief. h Similarly, Mr M. Imadegbelo of Counsel for the respondents adopted the respondents’ brief of argument deemed properly filed and served on the 16/1/96. He also relied on the brief. In laudably short a speech, Mr Akhidenor, in amplification i of his brief had urged us to dismiss the judgment of the court below and, eo ipso, allow the appeal. Mr Imadegbelo urged us contra wise. He pressed us to affirm the court below and, on that account, to dismiss the appeal. Not much speech j made, at all. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 412 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Now, it becomes desirable, indeed, necessary to give the a background facts, the antecedents of the case giving rise to the present appeal. They would not only serve to facilitate and enable a better appreciation, but also an understanding b of what issues were involved, canvassed and agitated at the trial and now on appeal. The pleadings filed, are rather prolix. They are copious – the “second further amended statement of claim” running up c to a total of 49 paragraphs copied from pages 31 to 43 inclusive of the record, and, the “further amended statement of defence,” copied in pages 57 to 63 inclusive of the record, running to a total of 24 paragraphs. So, rather than extract d the facts from the very pleadings themselves, I would, instead, summarise each party’s case, as pleaded, albeit briefly, to avoid an undue length and bulk to the judgment. The second named plaintiff, Osezuah and Co (Nig) Ltd, e (hereinafter to be referred to simply, as “the company” for short) was or is a customer to or of the Union Bank of Nige- ria Ltd, the defendant, (hereinafter to be referred to simply, as “the Bank” for short). The company kept an account with f the bank. Desirous of buying and importing some dry cleaning equipment from MOE and Stoll International Inc., a United States of America based company, (hereinafter to be referred to simply, as the “Overseas Suppliers” for short) g had approached the bank to help and assist it (the company) handle the international trade transaction with the “Overseas Suppliers”. It (the company) applied to the bank for an overdraft facility to the tune of N60,000 (sixty thousand naira). It h was approved or granted. For a collateral security, Simon Osezuah, the company’s share holder and Managing Direc- tor executed a deed of legal mortgage of his property for or with the bank. The deed was or is registered as “8/8/617” in i the Land Registry. The Overseas Suppliers opened and sent to the company their proforma invoices – (three of them) Nos. 81,006A, 82,008 and 82,009–9A (exhibits A–A3). The value of the j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Ltd v. Simon Osezuah and Others 413 a equipments as per the proforma invoices were in US dollars, what in International Trade, was the “money of Account.” The total value was U.S.$64,590 dollars (sixty four thou- b sand, five hundred and ninety United States of America dollars). Consequently, the bank opened Irrevocable Letters of Credit, (L.C.) Nos. 37/82, 40/82 and 41/82 for or on behalf c of the Overseas Suppliers (exhibits “B to BS”). On the reverse side of each “L.C.” are the undertakings executed and acknowledged by the company, including for the purposes of what I might be disposed to say, ut infra, the following expressions inter alia:– d “In consideration of the opening by you of this credit on my/our behalf of I/we hereby undertake and agree that three days before the due date of each draft drawn thereunder in case of acceptance or on receipt of document in Nigeria . . . I/we will provide you e with funds necessary to meet the payment thereof . . . It is understood . . . I/we agree that my/our liability to you in respect of each draft drawn under this credit shall not be discharged until the Cen- tral Bank of Nigeria discharged provide you with the requisite foreign currency to meet payment by you or your correspondent f and such . . . I/we hereby authorise you to debit my/our account with all sums which may become due to you in respect of this credit including your commission of . . . I/we enclose a cheque . . . for . . . to provide you with your margin security you are authorised to debit my/our account with.” g (The italics is supplied by me for emphasis of the indemnity undertaken by the company). I had rather set them out sooner than later. This I have done. h The equipment arrived Nigeria. Some of them were defective; others not the type originally ordered for. The company wrote to the bank to stop any payment to the Overseas suppliers/beneficiaries. The bank replied that that was not possible. Funds covered by the L.C.s had already been released i to the Overseas Suppliers. According to the company, it had liquidated its indebtedness to or with the bank. But notwithstanding, the bank was wrongly debiting and crediting its accounts with the bank. The company aggrieved that it com- j pleted payment to the bank in 1983. It demanded the return [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 414 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. to it of the Title Deeds registered as “8/8/617”. But the bank a wrongfully refused to do so. Because of the bank’s wrongful detention of the deeds, the company asserted, further, that it thereby lost the chance of obtaining a credit facility from Al- b lied Bank Ltd for the expansion of its business. It, accordingly, lost an estimated profit of N30,000 per annum. The above apart, the bank, in 1987 unilaterally increased its (company’s) overdraft holding. Hence the action brought. c The bank, on its part, had set up a parallel case. Not only did it deny falsely, or wrongly crediting and/or debiting the company’s account, or sending irreconcilable accounts but also denied detaining the “Deed of Legal mortgage” wrong- d fully. According to the bank, the company was or is, as at the 23/4/87 indebted to the bank to the tune of N14,517.93 (Fourteen thousand, five hundred and seventeen naira, ninety three kobo) inclusive of accruing interest charges. Of e this, the company was duly informed or warned in or by a writing dated the 23/4/87. By Banking practice, the bank is or was entitled to retain the “legal mortgage title deeds” until the company’s indebtedness was, fully, liquidated. f The bank denied the allegations contained in paragraphs 19, 20, 21, 22, 23, 24, 29, 31, 32, 33, 38, 39, 40, 41, 47, 48 and 49 of the second further amended statement of claim. It was part of the bank’s case, as pleaded, that the Central g Bank of Nigeria did not release the relevant foreign currency until 1988. This the company was duly informed of this, in writing (exhibit 2) dated the 23/2/88. The bank set up a plea of estoppel. It pleaded the indem- h nity as per the irrevocable letters of credit. It was part of the bank’s case that it was its letter of the 6/10/87 to the company, warning it of its company’s documentary financial liability and the outstanding interest charges that stirred the i company quickly to institute the present action. In my respectful view, based on the state of their pleadings, the issue that went for trial was not very complex. It fell within a narrow compass. It seems to me to be this. But j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Ltd v. Simon Osezuah and Others 415 a before I set down what the issue was, as it appears to me, I shall, firstly advert to the principles to guide me in its for- mulation. b Now, as appearing in page 643 of Paget’s Law of Banking (8ed):– “The buyer who, pursuant to his sales contract instructs his banker to issue a credit undertakes impliedly or expressly to put the c banker in funds to meet a payment under it if the documents against which the banker pays are what the buyer calls for and where he does so provide funds the banker is bound to apply them to the purpose to which they are appropriated. Normally, and in the absence of any express agreement to the contrary, the banker d on paying under the credit debits the buyer’s account. The banker must comply rigidly with his instructions and where he does, he is entitled to the indemnity of an agent.” And at page 644 occurs also the following expression:– e “The banker’s undertaking under an irrevocable or confirmed credit is, of course, absolute. An irrevocable or confirmed credit which had been advised to the beneficiaries cannot be cancelled at the instance of the buyers (Hamzeh Malas and Sons v. British Imex f Industries Ltd). In the words of Jenkins, L.J., .‘ . . . the opening of confirmed letters of credit constitutes a bargain between the bank and the vendor of the goods, which imposes upon the banker an absolute obli- g gation to pay’. Once a credit has been communicated to the beneficiary the buyer cannot amend without the beneficiary’s consent, nor can the issuing banker, at the instigation of the buyer, force an amendment on the intermediary buyer.” h Perhaps, at the risk of a repetition, (and I apologise for it) but rather necessary for the purpose of clarity and better appreciation, I did reproduce certain of the undertakings (indemnity clauses) by the company, as the buyer, to the effect that:– i “I/we agree that each draft drawn under this credit shall not be discharged until Central Bank of Nigeria provide you with requisite foreign currency to meet payment by you. . . . And if no account is maintained in my/our name in your books, I/we undertake to reim- j burse you for any claim of the above nature made.” [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 416 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

I shall not stop here. No. I shall further advert to the memo- a rable apt and instructive dicta, per Denning, L.J. (as he then was) in Pavia and Co SPA v. Thurmann Neilsen (1952) 2 Q.B. 84 at page 88 to this effect:– b “The sale of goods across the world is now usually arranged by means of confirmed credits. The buyer requests his banker to open a credit in favour of the seller and in pursuance of that request the banker, or his foreign agent, issues a confirmed credit in favour of the seller. This credit is a promise by the banker to pay money to c the seller in return of the shipping documents. Then the seller, when he presents the documents, gets paid the contract price. The conditions of the credit must be strictly fulfilled, otherwise the seller would not be entitled to draw on it.” (The Italics is mine) d Strictly speaking, a confirmed credit is an irrevocable credit. The law, therefore, governing commercial letters of credit is largely the law of contract and agency. Armed with and guided by the above discussed principles e the issue, firstly, arising from the state of the parties’ pleadings, therefore, becomes this: Has or had the company, qua buyer of the American type dry cleaning equipment from MOE and Stoll International Inc. (the overseas suppliers) f transacting through its (company buyer’s) agents (Union Bank of Nigeria Plc. (the Issuing Bank) liquidated, fully, in the terms of the undertakings, as per the irrevocable letters of credit opened, its indebtedness or documentary financial g liability to the Bank herein the appellants before the action brought, giving rise to the present appeal? And here, again, the dichotomy between the “money of account” and the “money of payment” which implies that the h debtor must use as much “currency of payment” that would be enough to pay the debt in the currency of account, must be, ever, borne in mind in considering this appeal. Secondly, the gist of liability in tort of detinue is the i wrongful detention of the plaintiff’s chattel (herein the Title Deeds registered as “8/8/617” in the Lands Registry). The action was available against the defendant who received the chattel from the plaintiff or otherwise against the defendant j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Ltd v. Simon Osezuah and Others 417 a who withholds or withheld the plaintiff’s chattel after the plaintiff had demanded its return. Hence, in General and Finance Facilities Ltd v. Cooks b Cars (Ramford) Ltd (1963) 1 W.L.R. 644, Lord Diplock, L.J. (as he then was) at page 648 differentiated action in conversion from action in detinue as follows:– “There are important distinctions between a cause of action in c conversion and a cause of action in detinue; the former is a single wrongful act and the cause of action accrues at the date of conversion, the latter is a continuing cause of action which accrues at the date of the wrongful refusal to deliver up the goods and continues until delivery up of the goods or judgment in the action in deti- d nue.” The cause of action in detinue, as herein, partakes of the nature of an action, “in rent” in which the plaintiff seeks specific restitution of his chattel (herein the Title Deeds regis- e tered as “8/8/617”). Armed with and thus guided by the principle of law discussed, ut supra, the issue, secondly, going for trial, from the state of the pleadings becomes this. Was or is the Union Bank of Nigeria Plc qua agents for Ose- f zuah and Co (Nig.) Ltd, purchasers of the dry cleaning equipment from the American company – the Overseas Sup- pliers – wrongfully detaining or retaining the “Title Deeds” given to it, (the Union Bank of Nigeria Plc, qua the Issuing g Bank of the Irrevocable letters of credit) as a collateral security? Put rather simply and more nakedly, assume, “argumento” and this is only by way of an argument, “a posteri- ori,” before Osezuah and Co Nig. Ltd ever liquidated, fully, its documentary financial liability to the Union Bank of Ni- h geria Plc., herein the appellant. Would the bank in law or at law be bound or entitled to release its security, id est, return the title deeds to Osezuah and Co Nig. Ltd on its demand? Unless and until either or/and the above be resolved one way i or another, a discussion of “remedium,” compensation or damages becomes idle and sterile. And pausing here, again, I wish to remind myself again from the state of the pleadings, that he who asserts has the j burden to prove his assertion. See sections 135 and 136 [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 418 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. respectively, of the Evidence Act Cap 112 Laws of the Fed- a eration of Nigeria, 1990. He discharges his primary onus within the principle laid down by the West African Court of Appeal (WA.C.A) in Kodilinye v. Mbanefo Odu (1935) 2 b WA.C.A 336 at 337. Although he does discharge his onus on the balance of probability (see Mogaji v. Odofin (1978) 3 S.C. 91). Yet if the story of the claimant i.e., the plaintiff, be as good as that of the defendant, or if there is an equilibrium between them or they are on an equal knell, then, “a fortiori” c the plaintiff must fail and his case be dismissed. Why? Be- cause the evidence on that imaginary scale of Justice (Carry- ing a pair of scales and not a cornucopia) has not and does not preponderate in his (plaintiff’s) favour. Pure and simple; d no more and no less! As I indicated above, there are two sets of formulations of issues for determination. I have examined the two sets. I e have compared the one set with the other set. Now, the grounds of appeal in an appellate court play a role similar to pleadings in original judgments. Issues argued in an appellate court are distilled from the ground or the grounds of appeal filed. The issues or an issue formulated must of neces- f sity flow or derive from a ground of appeal filed or more, ideally from a combination of grounds of appeal filed. Any issue not arising from the grounds of a ground of appeal goes to no issue. It is a non issue and, eo ipso, ought to be g disregarded, discounted and discountenanced. “Cadit quaestio,” the matter ends there. See Modupe v. The State (1988) 4 N.W.L.R. (Part 87) 130; Okpala v. Ibeme (1989) 2 N.W.L.R. (Part 102) 208. h Now, the respondents herein had not appealed from the judgment by the court below. No. So, they are no cross appellant. Yes. Can they even formulate an issue or issues outside the grounds of appeal filed by the appellants herein? i From my study of the respondent’s brief, unless I understood it imperfectly, I have unsuccessfully struggled to see from which of the grounds of appeal filed, the issues formulated by the respondents were distilled. Assume, I be right in j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Ltd v. Simon Osezuah and Others 419 a my view, then the result is obviously. See Buraimoh v. Bamghose (1989) 3 N.W.L.R. (Part 109) 352. The respondents cannot be allowed to formulate an issue, as it were, “in b nubibus” hanging in the air, or “in abstracto”. No. The result is obvious. And I have said enough above, I shall not repeat myself. Before discussing the learned submissions by the Counsel c on the arguments. I shall permit myself to say straight away that I have scrutinised the appellant’s brief of argument. In my respectful view, it is just a piece of prose writing running from pages 2 to 5 thereof, in, of course, “paragraphs 4.1.” to d “paragraph 4.6.”. At page 6 is the “conclusion.” There is no knowing which argument or submission related to or is related to which issue and from which grounds of appeal the issue argued relates or is distilled. e All that is left to or for the Justice preparing the judgment to sort out. In my respectful view, This irregular method helps in no small way to make the already difficult task of the Justices of the appellate court preparing the judgments f more onerous. Please help lighten their task. It is highly desirable that the briefs be carefully written. A well written brief of argument saves time. It enhances the quick disposal of the appeal. It cannot, with respect to the Counsel, regard- g ing the appellant’s brief of argument filed, be said to be a model. No. Now, to the learned submissions by the Counsel on the arguments: It was contended by the Counsel, in “paragraph h 4.1.” of page 2 of the appellant’s brief, referring to paragraph 23 of the “Second Further Amended Statement of Claim (“the claim”) that the total of the debits “Dr.” therein came to N166,312 i.e. (N75,348 plus N90,940 (see para- i graph 23(1) and 23(3) respectively) while the total credit (Cr) of N43,303 plus N75,348,00 plus N44,209 came to N162,860.11. As the Counsel submitted, by sheer simple arithmetic, there was a debit balance of N3,451.89. This j amount was by far less than the credit facility of N60,000 [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 420 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. granted to the company. It was the further contention that a the respondent did not plead by law much it was over debited. Neither did the trial court itself even inquire to find out how much the respondent was over debited with. It was part b of the contention by the learned Counsel that the respondent failed to establish in evidence by evidence say for an example, by the presentation of Bank Tellers, that it (the respondent) had liquidated the overdraft facility granted it together with the interest thereon accruing. On the contrary, the c learned Counsel had drawn attention to the evidence by the appellant through its officer in page 65 lines 16–28 and in page 66 lines 1–5, of the record to show how the respondent’s account was operated. The operation, Counsel sub- d mitted, arose from the irrevocable Letters of Credit opened and the final release of foreign currency by the Central Bank of Nigeria. Exhibit M by the Central Bank of Nigeria showed the amount not in naira but in foreign currency, id e est, United States of America dollars, id est, $7,236. Counsel, therefore, submitted that the learned trial Judge was wrong in saying, (borrowing the diction of the brief) that “there was no single document of Central Bank involvement in these dealing”. The respondent, as the f “principal” of or to the appellant, its “Agent”, it was submitted, ought to take the consequences of its Agent. The respondent was, therefore, it was submitted in page 3 of the appellant’s brief, bound by the dictates by or of the Central g Bank of Nigeria. Learned Counsel had further contended that Simon Ose- zuah the first named plaintiff at the trial (and herein the first respondent) never was a customer to or of the appellant. And h the learned trial Judge, Counsel contended, failed to appreciate that the appellant owed no duty of care to the first respondent; in respect of keeping any accounts and accordingly failed to appreciate what duties of care were owed to i the respondents respectively in the transaction giving rise to the case and giving rise to the appeal. Counsel cited and relied on Salomon v. Salomon and Co Ltd (1897) A.C. 22 and further on Akinsanya v. UBA Ltd (1986) 4 N.W.L.R. (Part 35) 273. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Ltd v. Simon Osezuah and Others 421 a Concluding, Counsel had referred to exhibit T. He contended that notwithstanding that the debit balance as shown above was N3,451.89 there was evidence (see exhibit T) that b the second respondent was indebted to the appellant to the sum of N14,517.93k being a continuing customer of the appellant. The Counsel had referred further to paragraph 24(2) of the c claim. It was the submission by the Counsel in the brief that the averment therein was “misconceived”, because the amount “brought or carried forward” was not N33,900.73 as at “9/7/86”. Rather it was “N77,203 Dr.” after which the d credit of N43,303 as pleaded in or by paragraph 24(1) of the claim was given thereby leaving the debit balance of N33,900.73 to continue (again borrowing the diction of the brief) “its journey in the account on 10/7/86, see exhibit R. e Counsel submitted in “paragraph 4.2.” in page 4 of the brief that both the trial Judge and the respondents completely did not understand or misunderstood the “continuing system”. The learned trial Judge was further criticised for f failing to resolve the accounting procedure given in evidence by the appellant and so failed and fell in error in not applying section 149(c) of the Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990. Again the case of Akin- g sanya v. UBA. Ltd (supra) was prayed in aid of. It was contended in page 4 “paragraph 4. 3” of the appellant’s brief that in making the award of N60,000 as the loss sustained as a result of first plaintiff’s title document, “the h learned trial Judge had failed to distinguish between the rights or obligation to or of the appellants to plaintiffs, herein the respondents. The first respondent (Simon Ose- zuah) had been given the award for what the trial Judge con- i sidered, wrongly it was contended, the wrong accounting of the second plaintiff’s account”. The award of the damages of N60,000 to the first respondent (Simon Osezuah) had no foundation in principle or at j law, it was contended by Counsel. Counsel referred to ex- [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 422 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. hibit 1A. It (exhibit 1A) is copied at page 114 of the record a of appeal (parenthetically let me say sooner than later that exhibit 1A reads inter alia:– “I understand that the guarantee I am about to sign is in respect of b banking facilities to Osezuah and Company Nigeria Limited is in support of legal mortgage dated 30th November 1981 registered as 8/8/617 . . . (sgd) . . . c (Signature of Guarantor 4/11/85).” Based on the foregoing, learned Counsel posited “How could the first plaintiff recover any general damages in detinue?” Counsel, on the quantum of damages recoverable in d detinue had referred to Clerk and Lindsell on Torts (4ed) page 706 Art. 1151; and further to Kalu v. Mbuko (1988) 3 N.W.L.R. (Part 80) 86, “Ratio 14,” (a term I do not like to use because it has almost always been quoted and misap- e plied by some Counsel). Dealing with the award of N30,000 per annum from 1987 till judgment, as the anticipated loss of profit, learned Coun- sel in page 5, “paragraph 4, 5”. of the appellant’s brief, f Counsel had drawn attention to the date of the filing of the writ of summons initiating the suit. The writ of summons was issued on the “13th day of October; 1987. (See page 1 of the record). He further drew attention to the respondents’ g warning letter through their Solicitor, exhibit W. “exhibit W” pre-dated the issuance of the writ of summons. It (exhibit W, letter ref. No. IEI/125/87) was written and dated the “7th July, 1987” – i.e. over three months before the writ of h summons was issued. Therein, the sum of N30,000 p.a. was being claimed. The feasibility Report (exhibit IDI) was not copied. It was the submission by Counsel that “exhibit IDI was made in i contemplation of the action brought. He drew attention to sections 90(3) and 91(3) of the Evidence Act Cap 112 Laws of Federation of Nigeria, 1990, for their effect on exhibit IDI notwithstanding that it (exhibit IDI) was admitted in evi- j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Ltd v. Simon Osezuah and Others 423 a dence without objections. Concluding Counsel contended that the learned trial Judge was wrong to have utilised it (exhibit IDI) the way be did. b The above apart, Counsel contended in paragraph 4.6 of the appellant’s brief that the award of N60,000 per annum was too remote. He cited the ancient, highly venerated and hallowed case of Hadley v. Baxendale (1843–60) All E.R. c Rep. 461 at page 465; Onwuteaka v. Davco Technical Ser- vices and Supplies Ltd FCA/L/49 of 13/2/80 (Unreported); Ogwu v. Leventis Motors Ltd (1963) 2 All N.L.R. 65. I shall pause here for a comment for the purpose of clarity d and elucidation to put the point aside. I did observe above, that the appellant’s brief of argument was one long piece of prose writing. The grounds of appeal filed (five of them) were rather unideally, split into more issues than they neces- e sarily ought to have been. Indeed some of the issues as formulated could have been very conveniently and adequately condensed into one and argued together. I have, however, adopted the method of taking and considering the submis- f sions on the arguments, also, together. This in my judgment was deserving in the circumstance. It also made for convenience. I have said this just in passing. The submissions by the respondents in the respondents’ g brief were in the main cantered and hinged on what Counsel christened, “Estoppel by Conduct”. It was contended by Counsel in page 6 paragraph 4.1 et sequentee, that the respondents, qua plaintiffs, had pleaded “estoppel” and gave h evidence in that direction. The evidence was Counsel contended, “unrebutted” by the appellants. Particular references were made to exhibits “F” and “M”. The letter by the appellants dated 23/3/83 (exhibit F) was i recited and quoted “in extenso”. It (exhibit M) I did touch on earlier on dealing with the submissions by the appellant. Based on these exhibits (F and M) it was submitted that the appellants were estopped from denying that the funds cov- j ered in or by the irrevocable letters of credit were released to [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 424 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the Beneficiaries in 1983. Reliance was placed on section a 151 of the Evidence Act Cap 112 Laws of the Federation, 1990 and the cases including Joe Iga v. Amakiri (1976) 11 S.C. 1 at pages 12–13; Ondo State University v. Folayan b (1994) 7 N.W.L.R. (Part 354) 1; 25. Counsel drew attention to the testimony by the appellant at the trial, which in the Counsel’s opinion, was supportive of his contention. Coun- sel therefore justified the learned trial Judge in accepting the c evidence and adjudging the appellants, qua defendants liable. Counsel next dealt with the “Award of Special and General damages” in page 8 “paragraphs 5.1” et sequentee, of the d respondents’ brief. Learned Counsel similarly justified the award of both special and general damages made by the learned trial Judge. e As Counsel contended, the respondents established those items of claim by credible evidence. There was evidence by the respondents that the appellant retained the “Title Deeds” in spite of the letters (exhibits “N” and “R”) of demand for f their return and after the respondents had liquidated their indebtedness to or with the appellants. It was the contention by the Counsel in page 9 of the respondents’ brief that the respondent were desirous of utilis- g ing the title deeds to secure a loan from another bank – Al- lied Bank Ltd. That bank refused to grant the loan facility because the respondents could not produce a collateral security. h Reference was made to the evidence by Patrick Kwelomen (PW2) an Accountant who prepared the Feasibility Report. (exhibit IDI) (alias, per respondents’ brief, exhibit Y). Nu- merous decided cases were cited excerpts there from quoted i in support and for support of the proposition that the evidence by the PW2 not having been contradicted, the court was justified to accept it, rely on it and act on it in the award it (the court) did make in favour of the respondents. It was j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Limited v. Simon Osezuah and Others 425 a submitted that the Feasibility Report was prepared in 1986; “not produced during the pendency of the proceeding/evidence of plaintiff, witness No. 2”. b In page 12 of the respondents’ brief, Counsel had submitted (and I beg leave to borrow the diction of the brief):– “The plaintiff went further to establish substantial award by prof- fering evidence of fictitious crediting and wrongful debiting of c second plaintiff account. The mode and manner the defendant fiddled with the second plaintiff Account is illustrated at pages 34 and 35 of the record of appeal.” (Contained in pages 34/35 are the pleadings of plaintiffs d second amended statement of claim). Note (1) (The Italics and the square brackets with their contents are mine). e It was the contention by the Counsel again in page 12 of the respondents’ brief that the appellant did not cross- examine on or contradict the evidence by the respondents on their entitlement to general damages. Learned Counsel in f conclusion urged this Court not to interfere with the awards made. Before I go any further, I shall pause, for a comment or, to dispose of certain of the false impressions, with respect, to the g respondents’ Counsel. A good starting point to make my comments intelligible is to refer firstly to exhibits “C and C1”. These are letters headed:– h “Notice of Arrival of Documentary Collection.” Part of either exhibit by the appellant to the respondents reads:– “Drawer – MOE and Stoll Inc. i Date of Bill – 29/11/82.” The letter (exhibit F) to which learned Counsel referred in page 6 of the respondent’s brief is a reply to the respon- j dents’ letter dated, “10th February, 1983,” (exhibit E). [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 426 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

“Stop of payment on letters of credit Nos. a It just remains for me to say that the letter (exhibit E) to which exhibit F was a reply demonstrated the want of knowledge of the respondents and/or the Counsel, with respect, to the duty of an issu- b ing bank in the law of International Trade when letters of credit (Irrevocable or confirmed letter mean the same thing). I had already dealt with this aspect above. See Paget’s Law of Banking (8ed) page 644 (supra). The above disposes of the matter wholly and entirely. So, cadit quaestio.” c The main wicket of the respondents’ Counsel’s submission indeed his fire power was “Estoppel by conduct” submitted upon with much vehemence but without bitterness. Again, I endeavoured to touch on this aspect of the case earlier on, d perhaps imperfectly. I dwelt in some detail on the irrevocable letters of credit opened by the appellants on behalf of the respondent, qua agents for the respondents, in the business of importing those dry-cleaning equipment. I did, in some e detail, try to set out, in extenso, the undertaking executed by the second respondent, Osezuah and Co (Nig.) Ltd. These undertakings were endorsed on the reverse side of each of the irrevocable letters of credit. The question now is: was the f second respondent not bound by these undertakings? Ans. Of course, it was. Do those undertakings not operate as an estoppel against the second respondent? g Ans. Of course the quick answer is, capital Yes. At the risk of a repetition the second respondent is estopped by his undertaking that:– h “I/we agree that my/our liability to you in respect of each draft drawn under the credit shall not be discharged until the Central Bank of Nigeria provide you with the requisite foreign currency . . .” I/we hereby authorise you to debit my/our account with all sums i which may become due to you in respect of this credit including your commission of . . .” Could the second respondent “run away,” resile from these? Again, the answer is a capital and short, unhesitating No. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Limited v. Simon Osezuah and Others 427 a Afterwards, what is an estoppel? It is a rule of the law of Evidence. It is no other than a bar to testimony. To use the language of naval warfare an estoppel must always be either b a mine layer or a mine sweeper, it can never be a capital war head. As put by Littleton S. 667:– “A man may be estopped or an estoppel may operate because a man’s act or acceptance stoppeth or closeth up his mouth to allege c or plead the truth.” To complete the circle, I now refer to exhibit M., also referred to by the Counsel for the respondent. It (exhibit M) from the Central Bank is in U.S. dollars. The amount therein d reads:– “US dollars 7,236”. I shall not stop here. No. Then came exhibit 2 dated 23/2/88, it reads:– e “Our letter of credit Numbers 37/82, 40/82 and 41/82”. Now, it may be accepted as pleaded and given in evidence that the second respondent is “a major dry-cleaning com- f pany.” But that cannot by any extension include or mean that the second respondent is an expert, “peritue” in Banking or Accounts. It was pleaded that the account of the second respondent was “wrongfully operated” and later submitted g by Counsel what there was “fictitious crediting and wrongful debiting of the second plaintiff’s account.” The question pertinent enough and asked by the Counsel for the appellant becomes: But how was it established in h evidence that the account of the second respondent was so wrongfully debited or fiddled with? The onus, in my view, lay on the second respondent to prove and establish its assertion by credible evidence. Sections 135 and 136 of Evidence i Act Cap 112 Laws of the Federation of Nigeria, 1990. They were not tendered, in evidence as evidence, in proof of the assertions “Bank Tellers” to prove payments in, in liquidation of the respondent’s indebtedness to the appel- j lant’s documentary financial credit. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 428 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Issues on the pleadings were joined on the alleged wrong- a ful debiting and/or crediting to the second respondent’s account. What was the evidence in this regard? It was contained in page 66. Part of the evidence, in chief by the de- b fendant read:– “The various debits and credits were as a result of the revaluation of foreign currency that connects all imports as devested (sic) by Central Bank of Nigeria, at this period, the Central Bank of Nige- ria was finding a realistic value for naira. The letter of credit, there c is a clause in the letters of credit authorising the bank to credit or debit the account covering to the fluctuation in exchange rate. That form of undertaking is attached to the letter of credit exhibit identification 1 and exhibit identification 2“. . . . The relevant foreign currency in respect of this transaction was ordered on 23/2/88, this d is the approval tendered, admitted exhibit 2.” Continuing at page 66, the witness further stated inter alia:– “and at 22/4/87 the balance on plaintiff account was the sum of N59,580.82k and the plaintiff was written by letter exhibit T dated e 23/4/87.” Sunday Umakaye Romun was however cross-examined. In an answer to a question by the Counsel, the witness replied in page 67 of the record inter alia:– f “It is true that all the alleged debts owed by the plaintiff arose out of the documentary credit transaction. I have exhibits 1c.2 to 1c.30. . . . The amount owed by the plaintiff was not due mainly to interest charges but due to a shortfall for re valuation exercise as ordered by the Central Bank. It is correct that if not for the re- g valuation exercise carried out by the defendant the debit notes exhibits J–J4 could not have answer.” How did the learned trial Judge handle and treat the evidence as led? He wrote on page 94 of the record inter alia:– h “In view of my preceding remarks by the wrongful act of crediting and debiting the first plaintiff’s account, the defendant committed a breach of various duties of care and skill owed to the plaintiffs by reason of its negligence and also by reason of the contractual relationship existing between a banker and its customer.” i Now, before I record my conclusion, I ask this pertinent question:– Q1. Was there any contractual relationship between Union Bank of Nigeria Plc, qua defendant at the trial and Simon j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Limited v. Simon Osezuah and Others 429 a Osezuah, shareholder and Managing Director to the Ose- zuah Co Nig. Ltd qua second plaintiff at the trial? Q2. Was the Issuing bank, id est, the appellant herein an Agent b to the first respondent in the international trade involved in the opening of the Irrevocable Letters of Credit? Q3. Did the appellant as the Issuing Bank owe any duty of care to the first respondent in the transaction? And lastly, was it the first respondent’s account that was being operated dur- c ing the period of the international trade with MOE and Stoll International Inc. of the United States of America? My quick and short answer to each and all the above posers by me is capital No. Besides, the irrevocable letters of credit, d the undertaking therein, were executed by the second respondent. From the state of the pleading, the negligence id est, a breach of a duty of care owed by one party to another was not made an issue at the trial. Neither was the crediting e of the account of Simon Osezuah, qua plaintiff, whether negligently or otherwise an issue on the pleadings between the parties. And a trial court has a duty to confine itself to issues raised on the pleadings by the contesting parties. f It is the duty of trial courts to limit themselves solely and strictly to issues raised by the parties on their pleadings, and no more. To do otherwise, might well result in a denial of justice to one or other of the contesting party. And this will amount g to a miscarriage of justice. National Investment and Proper- ties. Co Ltd v. Bank of West Africa Ltd (1962) 1 All N.L.R. (Part 4) 556; Kalio and others v. Kalio (1975) 2 S.C. 15. The above apart, it is worthy of note that a word be said of h and about section 149(c) of the Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990. It raises a presumption of validity in favour of those performing public duty. Unless I am wrong the appellant in the operation of the account of the i second respondent was operating a public function or duty in relation to the international trade and the opening of the irrevocable letters of credit. Therefore in the evaluation of the evidence of the parties the legal presumption in the fa- j vour of any party must be taken into account unless and it is [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 430 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. displaced or rebutted. But did the learned trial Judge con- a sider the legal presumption in the favour of the appellant before arriving at his conclusions? Put the other way round did the respondents displace or rebut the presumption? However b the posers be considered in my humble opinion, the answer is in the negative. The finding by the learned trial Judge above recited in my view, is perverse. c In my view of the law as it stands, having considered the submissions by the Counsel on the arguments, and applying the principle thereto, the conclusion, I have readily come to, is that Issues Nos. 3.1, 3.4 and 3.5 taken together ought, each or all, to be resolved in the favour of the appellants d and, eo ipso, against the respondents. The grounds of appeal from where they arise therefore, succeed.

I had said something above, of or about the tort of detinue, e may be imperfectly. But I shall resist repeating myself again and again. The question pertinently arising to be asked to be firstly answered, therefore becomes this. Was or is the appellant wrongfully detaining or refusing to surrender the title f deeds given it by the second respondent to secure the overdraft facility involved in the international business transaction of the second respondent and the opening of the irrevocable letters of credit on its behalf by the appellant as its g agent? And germane to the above, assume argumento (and I have not so said it) that the retention be wrongful, what is the proper quantum of damages recoverable? And unless there be an “injuria,” discussions of “medium” is worthless h and idle.

However, for convenience, I shall firstly remind myself that in an action in detinue the judgment may take one of these three forms. It may (i) take the form of the value of the i chattel as assessed and damages for its retention or (ii) the return or recovery of its value assessed and damages for its retention of (iii) the return of the chattel and damages for its detention. In Rosenthal v. Anderson and others (1946) 1 j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Limited v. Simon Osezuah and Others 431 a K.B. 374, the Court of Appeal (England) expressed itself at page 377, inter alia:– “In an action for detinue the value of the goods claimed but not re- b turned ought, in our judgment to be assessed as at the date of judgment or verdict. But see also McGregor on Damages 13th Edition Paragraph 218 et sequentes. Now, I searched unsuccessfully the record of appeal to see c any evidence that the Title No. There was, however, some evidence by the respondent in page 25 of the record that demands were made for the return of the deeds from the appellants. These demands were in writing by the solicitor. See d exhibit S, dated 1/7/87. The third paragraph of exhibit S, inter alia, read:– “Our further instruction is formally to demand our client’s title deeds in the bank’s possession. Our client require (sic) the title deeds urgently to negotiate a loan/overdraft facility.” e It (exhibit S) was followed by exhibit W. It (exhibit W) was dated 7/7/87. It contained the following expression:– “We have been informed . . . that the unlawful detention of its Ti- f tle Deeds would deprive it of expected profits of over thirty thousand naira per annum.” a piece of evidence confirmed by the feasibility report made by Patrick Kwelom (pw2). And as Mrs Obazee Dafe Blessing testified: “since the collateral was one of the most important document g (sic). The Allied Bank does not allow the taking of title deeds as a collateral on a second mortgage as it is clumsy and cumbersome.” But the version of the evidence by the appellant in this regard is contained in page 66 of the record. Part of the evi- h dence by Sunday Umakeyo Romun read:– “The plaintiff asked for the release of his documents but this could not be done as the plaintiff was still indebted to the bank. This is by the contents of exhibit O as at the close of business in April, i 1987; in exhibit P the bank informed the plaintiff of their inability to release the document because of their indebtedness; after the defendant had written exhibit P; they were no longer obliged to release the documents. The plaintiff has not paid back to the defendant the amount he is owing and the defendant is not obliged to re- j lease the documents.” [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 432 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Now, I had earlier on, in the judgment referred to exhibit T a dated the 23/4/87 informing the second respondent of its indebtedness because:– “We must emphasise that the revaluation of your letters of credit b was the result of a Central Bank of Nigeria directive on Bills they had accepted but awaiting releases of cover . . .” Then followed the letter exhibit P dated 21/10/87 headed “Release of Deed of Conveyance dated 28/3/77 etc.”. Part of c exhibit P read:– “We are writing further to our letter of the 30th September, 1987 as the outstanding overdraft has not witnessed any reduction since we wrote aforesaid letter. There is really no reason for us to hold fast to any security if the account secured has been fully settled. It d is rather unfortunate that your current account is still overdrawn. Present balance is N9,760 with interest accruing daily while the documentary credit liability is yet to be discharged . . .” (The Ital- ics is supplied by me) e Now, to exhibit Q:– It was made on the 30th September, 1987. It is headed: “Banking facilities”. Part of exhibit Q read:– “We refer to your letter dated 30th August, 1987 and regret our in- f ability to release your title deeds held by us as security for your liabilities in our books. Although, your New Nigerian Bank Ltd cheque No. BB/1644372 dated 1st July 1987 for the sum of N5,815.83 (Five thousand, eight hundred and fifteen naira, eighty g three kobo) has since been cleared and proceeds applied as part reduction of your liability, the balance of your accounts as at close of business yesterday are:– O/D N 9,759.82 D/C N49,831.00 h Total – N59,590.82 (Fifty nine thousand, five hundred and ninety naira, eighty two kobo). Interest accruing. . . . Meanwhile, the issue of releasing your title deeds is being handled i by our Legal Department and we shall let you know of our action in due course.” Now, the old adage says “one must firstly be honest before he becomes charitable”. These title deeds were given as a j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA Union Bank of Nigeria Limited v. Simon Osezuah and Others 433 a security to secure the respondents’ indebtedness to the appellants. Before the indebtedness is fully liquidated, ought the bank to return the deeds; allow the respondents’ indebt- b edness to stand “floating” unsecured? And who suffers for it and who stands to gain? I had earlier touched on the principle Magaji v. Odofin (supra) and sections 135 and 136 of the Evidence Act. I c shall not go over these again. But suffice it to say immediately that it was or is the respondents who were or are asserting that they were not indebted to the appellants in any amount and, eo ipso are entitled to the return to them of the d title deeds. And who asserts proves his assertion. Now did the learned trial Judge hand the evidence of the wrongfulness or otherwise of the retention of the title deeds, if at all he did, before he wrote as he did at page 94 repro- e duced above by me or afterwards? Let it however be noted now and here that both exhibits P and Q came after exhibits S and W respectively. Did the trial Judge make any finding that the appellants were holding the title deeds because of f the respondents’ indebtedness unliquidated fully put in other words, did he make any finding that the respondents were not owing the appellants any money at all? Nowhere in the record did he make any such vital finding. g And that I hold it was essentially due to the posture and stance he, with respect, took rather wrongly and in error when he wrote as he did in page 94 of the record. I had earlier on reproduced it while considering the earlier issues. h Needless repeating myself again and again. On the same grounds as I held above, I do also hold that there occurred a miscarriage of justice. The learned trial Judge had already, baselessly though, held that the appellant was wrongly debit- i ing and crediting the first plaintiff and committed a breach of various duties of care and skill owed to the plaintiffs. But could the award of N30,000 per annum for prospective or estimated loss of profit, stand? The principle of law estab- j lished in or by Hadley v. Baxendale is as good a law in 1843 [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION) Nsofor JCA 434 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. as it is today in 1996 a period of over one hundred years. a Was the award of N30,000 per annum as estimated loss of profit because the title deeds were not returned (wrongfully or otherwise is not the case now) to enable the respondents b to obtain a loan from another bank directly flowing from such a refusal? This is not a matter of belief or disbelief. No. It is a matter of deduction of an inference. Assuming the detention of the title deed by the appellants after demands were c wrongful and am not and have not said so) is the award of N30,000 per annum from 1987 till judgment not too remote? See McGregor. On Remoteness of Damages. The awards, in my opinion, ran counter to the principle laid down in Hadley d v. Baxendale (supra) all the facts of the case taken into consideration. And would your Lordships’ Court, ever, allow these awards to stand? I, most certainly, think not. In my judgment e they are baseless in law or at Law. Judged from the evidence placed before the trial court. Put rather nakedly but without disrespect to the learned trial Judge the finding for or in the awards are perverse. f In the final analysis, in my judgment Issue No. 3.2 ought to be resolved in the favour of the appellants. And I do hereby resolve it against the respondents. The ground of appeal from which the issue is distilled therefore succeeds. g In the result, all the grounds of appeal succeed. The judgment by A.A. Agun, J. in suit No. B/386/87 on the 10/12/93 is hereby set aside accordingly. The appeal, therefore, succeeds. There shall be costs assessed and fixed at N2,000 in h the favour of the appellants and against the respondents. IGE JCA: I have had the opportunity of reading in advance the judgment just delivered by the learned brother Nsofor, JCA I agree with him that this appeal succeeds. I adopt his i reasonings and conclusions as mine. I also set aside the judgment of Agun, J. delivered on 10/2/93 in Suit No. 8/386/87 with costs assessed at N2,000 in favour of the appellants. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, BENIN DIVISION)

Union Bank of Nigeria Limited v. Simon Osezuah and Others 435 a AKINTAN JCA: I had the advantage of reading the draft of the lead judgment prepared by my learned brother, Nsofor, JCA I entirely agree with the conclusion he reached therein b that the appeal should be allowed. I also allow the appeal and abide by all the consequential orders made therein, including that on costs. Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

436 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Bi Zee Hotels Limited v. Allied Bank (Nig.) Limited

COURT OF APPEAL, KADUNA DIVISION b ABDULLAHI, MOHAMMED, MUHAMMAD JJCA Date of Judgment: 8 AUGUST 1996 Suit No.: CA/K/11/95

Banking – Banker/Customer Relationship – Disputes arising from transaction between – Whether Federal High Court c has jurisdiction to entertain Jurisdiction – Jurisdiction of the Federal High Court over disputes arising from transaction between Customer and the Bank – Whether exists – Section 230(1)(d) Constitution of d the Federal Republic of Nigeria, 1979

Facts e The appellant instituted action in the Federal High Court against the respondent. Claims special and general damages for illegal withdrawal from its account. The trial court, upon examining the issues before it, formed the opinion that its jurisdiction was ousted by the provision of section 230(1)(d) f of the 1979 Constitution, as amended by the provisions of Constitution (Suspension and Modification) Decree No. 107 of 1993. The trial court thereafter transferred the matter to State High Court. g The appellant, dissatisfied with this decision, appealed to the Court of Appeal. Held – h The provision of 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 persons (both of i them being legal persons) with respect to disputes relating to banking business or transaction between the legal persons (human or artificial) as customers and their bankers. Appeal dismissed. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

Bi Zee Hotels Ltd v. Allied Bank (Nig.) Ltd 437 a Cases referred to in the judgment Nigerian b Metal Construction (W.A) Ltd v. Migliore (1990) 1 N.W.L.R. (Part 126) 299 Nwadike v. Ibekwe (1987) 4 N.W.L.R. (Part 67) 718 Obatoyinbo v. Oshatoba (1996) 5 N.W.L.R. (Part 450) 531 c Ogbechie v. Onochie (No.1) (1986) 2 N.W.L.R. (Part 23) 484

Nigerian statutes referred to in the judgment d Constitution of the Federal Republic of Nigeria, 1979, section 230(1)(a), (b) and (d) Constitution (Suspension and Modification) Decree No. 107 e of 1993

Counsel For the appellant: Murtala Musa, Esq. f For the respondent: F.J. Osimerha, Esq.

Judgment g ABDULLAHI JCA: (Delivering the lead judgment) The appellant issued out a writ of summons against the respondent over some dispute relating to the banking transactions between the appellant as a customer and the respondent as a h banker. Pleadings were ordered filed and exchanged. The appellant later filed an Amended Statement of Claim. In the Amended Statement of Claim the appellant in para- i graphs 4, 5, 6, 7, 8, 9, 16 and 17 averred as follows:– “4. The plaintiff claims that some time in 1982 after a long wait without Statement of Account on its Account with the defendant it suspected fraud. plaintiff thereafter wrote a letter j dated 21/1/82 to request its Statement of Account from the [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Abdullahi JCA 438 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

defendant. The above referred letter is pleaded and the de- a fendant is hereby given notices to produce its original. 5. That the plaintiff subsequently received the said statement of account and plaintiff acknowledged the said receipt by b another letter of 25/5/82. The said statement and the letters above referred to are hereby pleaded and the defendant is put on notice to produce the original letters and statement of account in her possession. 6. The plaintiff avers that some errors and fraudulent entries c were noted on the photocopy of the statement of account and these were pointed out to the defendant in letters 25/5/82, 14/11/82 and 8/12/82 to which the defendant gave no response. The said letters are pleaded and the defendant d is put on notice to produce the originals. 7. On 11/1/82 the defendant fraudulently tampered with and purportedly withdrew from plaintiff’s account No.174 operated with defendant the sum of N10,000 and N2,000 on cheque numbers 00528839 and 00528840 respectively, e which said cheques were not issued by the plaintiff. The said cheques are pleaded and the defendant is hereby put on notice to produce the original waste of same at trials. 8. Further, on 29/1/82 without instructions or cheque, the de- f fendant debited plaintiff’s Account in the sum of N30,000 thus bringing the total unauthorised and fraudulent withdrawals on the said Account No. 174 to N42,000. The statement of all the transactions is pleaded and defendants g put on notice to produce same at trial. Also plaintiff pleads its letters of 18/2/88, 2/11/90 to the defendant. 9. The defendant has raised interests and bank charges on the said N42,000 between 1982 to March, 1993 and as a result brought the debit to N139,795.47k. The statement of the h said account and the defendant are hereby put on notice to produce same at the trials of this matter. 16. That the plaintiff denies ever receiving from the defendant any statement of his account No. 174 with the remarks that i any irregularity, discrepancy should be reported to the defendant within 14 days. The plaintiff avers further that the defendant is not denying the irregular withdrawal from the plaintiff’s account and also cannot satisfactorily explain the circumstances of the said withdrawals. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Abdullahi JCA Bi Zee Hotels Ltd v. Allied Bank (Nig.) Ltd 439 a 17. Whereof the plaintiff claims against the defendant the total sum of N8,168,031.36k as special and general damages in addition to the illegal withdrawal at Bank interest rate from 1982 till date”. b Having examined the averments of the appellant in the above mentioned paragraphs, the learned trial Judge formed the opinion that the jurisdiction of his court to try the case on the state of the pleadings, particularly the statement of c claim is ousted, by the provision of Decree No. 107 of 1993 otherwise known as Constitution (Suspension and Modifica- tion) Decree, 1993. He therefore invited the Counsel for the parties to address d him on this issue, which they did. In a well considered ruling, the learned trial Judge reached the following decision:– “Therefore a company or corporation, as an, individual legal per- e son, as well as a natural or human person, can open and operate bank account with a bank and consequently becomes the bank’s customer. The law does not make any distinction or discrimination between them. f I have reproduced the above provisions of the proviso to paragraph (d) of section 230(1) of the 1979 Constitution (as amended); I have given a careful consideration to the said proviso and I cannot see how it distinguishes human or natural person from the artificial personality of companies and/or corporations. If, therefore, the g proviso ousts the jurisdiction of this Court in respect of human or natural persons, it also ousts the jurisdiction of the Court in respect of artificial person like companies and corporations. I cannot but therefore hold that the proviso has ousted the jurisdiction of this Court not only in respect of natural human persons but also in re- h spect of artificial persons (both of them being legal persons) with respect to disputes relating to banking business or transaction between legal persons (human or artificial) as customers and their banks. Consequently, I hold that this Court has no jurisdiction to i try the plaintiff’s claim as formulated, the same having been ousted by the proviso to paragraph (d) of section 230(1) of the 1979 Constitution (as amended). Having held that this Court lacks jurisdiction to entertain matter, it has to be transferred to Kano State High Court. Therefore in exer- j cise of the power conferred upon me by section 22(2) of the [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Abdullahi JCA 440 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Federal High Court Act Cap 134 Laws of the Federation of a Nigeria, 1990 and Order 8 of the Federal High Court (Civil Procedure) Rules 1976, the substantive suit herein is hereby transferred to Kano State High Court for hearing and final deter- b mination.” The section of the Constitution as amended provides as follows:– “230(1) Notwithstanding anything to the contrary contained in c this Constitution and in addition to such jurisdiction as may be conferred upon it by an Act of the National As- sembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters arising from:– d (a) the revenue of the Government of the Federation in which the said Government or any organ thereof or a person suing or being sued on behalf of the said Government is a party; e (b) the taxation of companies and other bodies established or carrying on business in Nigeria and all other persons subject to Federal taxation; (c) customs and excise duties and export duties, in- f cluding any claim by or against the Department of Customs and Excise or any member or officer thereof, arising from the performance or purported performance of any duty imposed under g any regulation relating to customs and excise duties and export duties; (d) banking, banks, other financial institutions including any action between one bank and other, any h 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: Pro- vided that this paragraph shall not apply to any i dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.” It is against this ruling, the appellant appealed to this Court. j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Abdullahi JCA Bi Zee Hotels Ltd v. Allied Bank (Nig.) Ltd 441 a The appellant filed a single ground of appeal, which is glaringly an incompetent ground of appeal. It reads as follows:– b “GROUNDS OF APPEAL The learned Federal High Court Judge erred and misdirected himself when he held that he lacks jurisdiction to hear matter which borders on banker and customer relationship even though the said c customer was a corporation. Particulars (a) The corporate customer is not the same as individual customer envisaged by the proviso to the new section d 230(1)(d) of the Constitution of the Federal Republic of Nigeria as Amended by Decree No. 107 of 1993 at PART B of the Second Schedule of the said Decree. (b) That the word individual customer could not include e corporate customer. (c) That the spirit or the intendment of the decree is to bring matter affecting corporations within the jurisdiction of the Federal High Court. f Additional grounds may be filed upon receipt of the Records of Proceedings”. The law is clear now beyond doubt that a ground of appeal cannot be an error in law and a misdirection at the same time g as the appellant’s single ground clearly postulated. By their very nature on ground of appeal cannot be the two. See Nwadikwe v. Ibekwe (1987) 4 N.W.L.R. (Part 67) 718. Clearly the question for argument and determination raised h in this ground is what the true rule of law is on the matter, that is, whether a corporate customer is not the same as individual customer of a bank. In other words the question arises out of the uncertainty of the law or a question of the con- i struction of statutory provision, which clearly is the case here. See Metal Construction (W.A) Ltd v. Migliore (1990) 1 N.W.L.R. (Part 126) 299. Since the Counsel for appellant had combined both errors j in law and misdirection at the same time in one ground of [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Abdullahi JCA 442 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. appeal as he did, that would render the ground incompetent a and liable to be struck out. I think, it will not be out of place if I shed more light on the law as clearly demonstrated by Ogundare, JSC in Oba- b toyinbo v. Oshatoba (1996) 5 N.W.L.R. (Part 450) 531 at 547 to 549, where His Lordship painstakingly set out the pronouncement of his learned brothers on the issue. He stated with the dictum of Nnaemeka-Agu, JSC in the c case of Nwadike v. Ibekwe (Supra) at 743 which reads:– “. . . It is a recognised fact that the line of distinction between law simpliciter and mixed law and fact is a very thin one. But one does not convert a ground of mixed law and fact into a ground of law d by simply christening it ‘error in law’ or ‘misdirection in law’. Eso, JSC in his illuminating dictum in Ogbechie v. Onochie (Su- pra) at Page 491 observed:– “There is no doubt that it is always difficult to distinguish a e ground of law from a ground of fact but what is required is to examine thoroughly the grounds of appeal in the case concerned to see whether the grounds reveal a misunderstanding by the lower Tribunal of the law or a misapplication of the law to the facts already proved or admitted, in which case it would be question of f law, or one that would require questioning the evaluation of facts by the lower Tribunal before the application of the law in which case it would amount to a question of mixed law and fact. The issue of pure fact is easy to determine.” g As to what is a question of law with which a ground of law is concerned Karibi-Whyte, JSC opined thus in Metal Con- struction (W.A.) Ltd v. Migliore (Supra) at Pages 149–150:– “Generally considered, the term ‘question of law’ is capable of h three different meanings. First it could mean a question the Court is bound to answer in accordance with a rule of law. This excludes the exercise of discretion in answering the question as the court thinks fit in accordance with what is considered to be the truth and justice of the matter. Concisely stated a question of law in this i sense is one predetermined and authoritatively answered by the law. The second meaning is as to what the law is. In this sense an appeal on a question of law means an appeal in which the question for argument and determination is what the true rule of law is on a certain matter. The question of law in this sense arises out of the j [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Abdullahi JCA Bi Zee Hotels Ltd v. Allied Bank (Nig.) Ltd 443 a uncertainty of law. A question of the construction of statutory provision falls within this meaning. The third meaning is in respect of those questions which are committed to and answered by the authority which normally answers question of law only. Thus any b question which is within the province of the Judge instead of the jury is called a question of law, even though in actual sense it is a question of fact. The cases which readily come to mind are the interpretation of documents, often a question of fact, but is within c the province of a Judge. Also the determination of reasonable and probable cause for a prosecution in the Tort of malicious prosecution, which is one of fact, but is a matter of law to be decided by the Judge.” And as to what is a question of fact the learned Justice of the d Supreme Court added at Page 150:– “Now turning to what is a question of fact? It is easy to postulate that it is anything which falls outside the meaning of question of law. That will not be entirely correct, because there are exceptions. e Like question of law, question of fact has more than one meaning. The first meaning is that a question of fact is any question which is not determined by a rule of law. Secondly, it is any question except a question as to what the law is. Thirdly, any question that is to be answered by the jury instead of by the Judge is a question of f fact”. In construing a ground of appeal, the ground as formulated and its particulars are to be considered together.” Now, having found that the lone ground of appeal filed by the appellant is an incompetent ground, it follows therefore g that the lone issue formulated for the determination of the appeal in the appellant’s brief of argument is not competent. Consequently, the whole appeal is liable to be struck out. It is accordingly struck out. h Be that as it may, just for the sake of argument, even if I considered the appeal on its merit, I would have dismissed it as lacking in merit. I say this because having regard to the material placed be- i fore the learned trial Judge and the state of the law, that is the proviso to section 230(1)(d) set out above, I quite agree with the learned trial Judge that the jurisdiction of his court is ousted from determining the complaint of the appellant as j formulated from the statement of claim. [1994 – 1996] 6 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Abdullahi JCA 444 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The fanciful but misconceived arguments advanced by the a Counsel for the appellant in trying to draw a distinction between individual banker and non-individual banker as he put it is a non-starter and with due respect, I do not buy it. This b is because the state of the law as it is now makes or even suggests no such distinction. The fanciful arguments put forward by learned Counsel are that when one visits banks to transact banking business, the c banks have separate types of forms for individual bankers and another set of forms for non-individual bankers. Another difference is that individual bankers’ accounts are deemed open upon provision of satisfactory reference, while d in the case of non-individual bankers, there is need to verify the authenticity of the corporation. If the appeal had been considered on its merit, I would have dismissed it and affirmed the order made by the e learned trial Judge. All the same having struck out the appeal as incompetent, I award N2,000 costs in favour of the respondent. f MOHAMMED JCA: Having had the opportunity before today of reading the judgment of my learned brother Abdul- lahi, JCA which he has just delivered, I agree with him that the lone ground of appeal filed by the appellant from which g the lone issue for determination was formulated, is incompetent. This of course means that the appeal itself is incompetent and liable to be struck out. Accordingly, the appeal is struck out with N2,000 costs to the respondent. h MUHAMMAD JCA: I had the benefit of a preview of the judgment just delivered by my learned brother Abdullahi, JCA. I agree with the reasons given and the conclusions reached. The appeal being incompetent, I too strike it out i with N2,000 against the appellant in favour of the respondents. Appeal struck out. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Savannah Bank of Nigeria Ltd v. Alhaji RA Salami 445 a Savannah Bank of Nigeria Limited v. Alhaji RA Salami b SUPREME COURT OF NIGERIA MOHAMMED JSC, UWAIS CJN, BELGORE, IGUH, OGUNDARE JJSC Date of Judgment: 27 SEPTEMBER 1996 Suit No.: S.C./44/1990 c Banking – Banker and customer relationship – Scope and extent – Obligation of banker to honour cheques drawn by customer – Relevant considerations d Facts The respondent was a customer of the appellant at its Ijebu- Igbo Branch. He entered into a guarantee arrangement with the appellant guaranteeing the overdraft granted to another e customer with the understanding that his balance at all times in his account must not be less than the amount guaranteed. He issued some cheques which were dishonoured by the Bank in order to maintain the minimum balance agreed. The respondent as plaintiff in the High Court, Ijebu-Igbo, Ogun f State sued for damages for wrongful dishonour of cheques. The High Court held that the dishonour of respondent’s cheques was not wrongful. g Dissatisfied, the respondent appealed to the Court of Ap- peal. The Court of Appeal in a majority decision allowed the appeal and set aside the judgment of the High court. The appellant appealed to the Supreme Court. h Held – There are several limitations to the banker’s duty to honour a cheque by the customer. First, the banker is either actually in credit, or, where it is in debit if the customer has been i given an overdraft. Thus, if the customer has made a deposit, but a cheque is presented before the banker had reasonable time crediting the amount deposited into his account, he is not liable if he dishonours the cheque. j Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

446 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Cases referred to in the judgment a Nigerian Olagunju v. Raji (1986) 5 N.W.L.R. (Part 42) 408 b Foreign Govt. of Kelantan v. Duff Development Co Ltd (1923) A.C. 395 c Marzetti v. Williams (1830) IB. and Ad. 415 Strongman (1945) LD v. Sincock (1955) 2 Q.B. 525 Tucker v. Bennet 38 Ch.D. 1 d Webster v. Higgin (1948) 2 All E.R. 127

Nigerian statute referred to in the judgment

Evidence Act Cap 112 Laws of the Federation of Nigeria, e 1990, section 132

Counsel Appellant absent and unrepresented f For the respondent: A. Osinuga

Judgment MOHAMMED JSC: (Delivering lead judgment) The plaintiff, g who is respondent in this appeal, instituted an action before the High Court of Ijebu Igbo, Ogun State, and claimed against the defendant N50,000 as special and general damages for wrongful dishonour of his cheques. h The facts which gave rise to this appeal are in the following narrative:– Alhaji R.A. Salami, maintained a current account No. 074 with the appellant at Ijebu Igbo branch. The respondent, on i 5th November, 1984, issued out two separate cheques for N1,000 and N3,000 in favour of one Ladipo Sodeinde and Alhaji Ileaje respectively. Again on 31st December, 1984, he issued out cheque No. 119/C 006534 for the sum of j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC Savannah Bank of Nigeria Ltd v. Alhaji RA Salami 447 a N2,000 and another cheque No. 119/C 005535 for the sum of N1,000. Both cheques were issued in favour of his son Mr Isiaka Ayodele, with special instruction to his son that if he b collected the money he should deliver it to any of his friends coming from Abuja. The money was to be used for the joint venture that the respondent was executing with his friend at Abuja. All the cheques were dishonoured by the appellant. c The respondent demanded an apology from the bank for dishonouring his cheques when he had enough funds in his account to meet the amount in the cheques. When the apology was not given he instituted this action. d Pleadings were ordered, duly filed and delivered. The respondent gave evidence showing that he had enough funds in his current account No. 074 to meet the amount requested to be drawn in all the dishonoured cheques. His second wit- e ness was one Alhaji Rahman Olalere Yinusa. Part of his evidence touches the main issue concerning this appeal. When PW2 was cross-examined part of his reply read thus:– “I can read and write. I agree that the overdraft given to me was f for a period of 3 months. The manager of the defendant Bank stated the conditions under which the overdraft would be approved. I also signed a paper in October 1984 in connection with this overdraft. g Letter of Approval dated 22/10/84 is admitted and marked exhibit ‘L’. Witness continues: One of the conditions is that the guarantor must be a customer of the defendant Bank. Another condition is that the guarantor’s account must be good. I first nominated one Popoola as a guarantor. h Popoola is a wealthy man. He latter refused to go through with formal process because according to Popoola, he guaranteed someone who later died and at the time, he (Popoola) was still paying the debt. Before he said this, he had signed the formal i guarantor’s form. Witness reads out Clauses 4 and 9 of exhibit ‘L’. The Manager told me that the guarantor’s account must not fall below N5,000 during the pendency of the loan to me. I explained this to the j plaintiff.” [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC 448 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The case for the appellant was given through six witnesses. a But the most important of them is the evidence of Mr Oluyemi Kuforiji, the Manager of the respondent bank at Ijebu Igbo branch. Part of his evidence is as follows:– b “During October, 1984, Alhaji Yinusa applied for credit facilities. I looked at the account ledger in his name. He told me the purpose he wanted the money i.e. to buy drugs. He asked for N5,000. I gave conditions under which I would approve the overdraft. I c told him he should have a fixed amount of N5,000 in his account or someone with N5,000 in his savings or current account. This amount of N5,000 would be used to support the overdraft. This is known as personal guarantee supported with cash. This means that the account of the guarantor must not fall bellow N5,000 at any d time before the overdraft is fully repaid. In other words, the guarantor’s account is blocked to the extent of N5,000. I repeat, the account blocked must not be allowed to reduce beyond N5,000. On this arrangement, Alhaji Salami’s account would not be allowed to go bellow the sum of N5,000.” e The respondent told the trial court that on 5th November, 1984, he instructed his son to pay N4,000 into his current account and after payment he was given a teller. The teller was admitted as exhibit G. The respondent however, admit- f ted during cross-examination that the Manager told him that at the time his cheque for N1,000 was presented for cashing his account’s credit balance would fall below N5,000. The respondent however denied any knowledge that the condi- g tion of his standing as guarantor for Alhaji R.O. Yinusa was that his account must not fall below N5,000. The learned trial Judge after considering all the evidence adduced found, in a well considered judgment, that the dis- h honour of the respondent’s cheques was not wrongful. He accordingly dismissed his claim. Alhaji R.A. Salami being dissatisfied with the decision of the trial High Court filed an appeal before the Court of Appeal. In a split decision Sulu i Gambari, JCA and Ogwuegbu, JCA (as he then was) allowed the appeal and awarded N10,000 damages in favour of Alhaj Salami. Akanbi, JCA (as he then was) dissented and dismissed the appeal. j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC Savannah Bank of Nigeria Ltd v. Alhaji RA Salami 449 a The majority decision was based on the interpretation given exhibit J. Exhibit J was a letter which Alhaji Yinusa told the trial Court that the Manager told him to get the re- b spondent to write to the bank and say that he (the respondent) agreed to stand as a guarantor to the loan which Alhaji Yinusa applied to be given. Alhaji Yinusa told the Court that he helped the respondent to write the letter. The letter is ex- c hibit J and it reads:– “This is to certify that I guarantee M/S Royco Chemists and Su- permarket Limited, Ijebu Igbo, for the sum of N5,000 (Five Thou- sand Naira) and I also guarantee that my account be blocked for the same amount in the event the guarantee fails to pay the over- d draft on schedule.” Sulu-Gambari, JCA who wrote the lead judgment, with which Ogwegbu, JCA concurred, interpreted exhibit J in the following words:– e “It means that in the event the guarantee (borrower) fails to pay the overdraft on schedule, the guarantor’s account would be blocked for the same amount. The schedule of payment was to en- ure for the period of three months. In the course of the specified f period, the borrower complied with the terms of the repayment schedule. He paid in N1,000 and it was in evidence that he never defaulted. Having not defaulted therefore, the account of the guarantor does not become blockable.” Dissatisfied with the majority decision of the Court of Ap- g peal, the appellant came before this Court. Learned Counsel for the appellant relied on a single issue in prosecuting this appeal. The issue reads:– “Whether the majority of the Court of Appeal (Sulu-Gambari and h Ogwuegbu, JJCA) was right in relying solely on exhibit ‘J’ to conclude that the defendant unlawfully dishonoured the plaintiff’s cheques and without taking into consideration evidence of the nature of the transaction, the circumstances under which the exhibit i was written and the intention of the parties to the transaction.” Learned Counsel for the respondent formulated a similar issue and urged that the appeal be dismissed. Two documents are vital for the determination of this ap- j peal. They are exhibit J (reproduced above) and exhibit S [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC 450 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. which is the bank’s continuing Guarantee Form. The appel- a lant’s case as given in the pleadings is that the condition for grant of the overdraft by the appellant to PW2 was that the guarantor’s account must not fall bellow N5,000 during the b pendency of the overdraft. In the minority judgment of Akanbi, JCA (as he then was) the learned justice disagreed with the interpretation given to exhibit J by the majority judgments. The learned Justice quite correctly, in my view, c gave reasons for his disagreement with the majority in the following words:– “In the instance case to construe exhibit ‘J’ in the manner appellant’s Counsel would want me to do, is to overlook the facts of the d case, the issue before the court and the nature of the transaction. PW2, the plaintiff’s own witness testified to the effect that the condition precedent to the grant of the overdraft was that he should produce a guarantor who has a current account with the bank, that guarantor must maintain in the account a minimum sum of N5,000 e of the overdraft and that the sum has to be blocked for the duration of the overdraft. The witness said that he duly communicated these requirements to his guarantor and it was in those premises that exhibit ‘J’ was written not by the lending bank but by the PW2 himself before the guarantor duly signed it. The trial court adverted in f its mind to these and came to the conclusion that the intention manifested in exhibit ‘J’ was as long as PW2 continued to enjoy and operate the overdraft facilities, the appellant has to have at least N5,000 in his current account to support the overdraft.” g It is quite plain, going through the evidence as a whole that Akanbi, JCA was quite right in his interpretation. In his testimony, PW2 told the trial Court that when he approached the bank for the loan, the Manager told him that he must get h somebody who had an account with the bank and that the guarantor’s account must not fall below N5,000 during the pendency of the loan given to him. PW2 said that he explained the condition to the respondent. i The learned Counsel for the respondent argued that the majority decision had no difficulty in holding that the language of exhibit J was so clear that no parole evidence is required to determine its true meaning. It is trite law that j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC Savannah Bank of Nigeria Ltd v. Alhaji RA Salami 451 a when a transaction has been reduced into writing by the agreement of the parties, extrinsic evidence is inadmissible to contradict, vary, add to or subtract from the terms of the b document. However, a stranger to the agreement could not be precluded from proving the truth of what had been agreed to, in order to establish the ignorance, carelessness or fraud of the parties. c In the case in hand, exhibit J is a letter written to the Bank Manager by the respondent certifying that he stood as guarantor to Messrs Royco Chemists and Supermarket, Ijebu Igbo, for the overdraft of N5,000. The issue in dispute between the parties is the point where the respondent said in d exhibit J that he agreed that his account be blocked for the same amount in the event PW2 failed to pay back the overdraft on schedule. The document was signed by both PW1 and PW2. PW2 as a matter of fact explained in his evidence e before the trial court that he helped the respondent who was illiterate to draft the letter, exhibit J. It is evidently clear that the Manager of the Bank is a stranger to the terms of the agreement in exhibit J. That being so, it falls within the ex- f ception to the general rule that extrinsic evidence could be adduced to explain what the Manager termed as additional security to the guarantee. It is quite in order to permit the Manager to establish through evidence what he actually told g PW2 orally as a condition for the guarantee of the loan. The evidence of PW2 confirmed what the Manager told the Court was the condition of the guarantee. Those conditions were clearly spelt out in exhibit S. I therefore entirely h agree with the opinion of Akanbi, JCA (as he then was) in the minority judgment that if the construction of the majority justices to exhibit J is without reference to the circumstances that brought it to life, the document would be rendered useless and guaranteeing nothing. If the account of the respon- i dent is not blocked to maintain a minimum of N5,000 during the pendency of the overdraft, what is the wisdom of the bank insisting in blocking the account in the first place? The respondent could clear all the funds in his current account j since the bank could not dishonour his cheque during the [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC 452 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. pendency of the overdraft. Thus, if PW2 defaulted in paying a back the overdraft by which time the account of the respondent was without credit balance, blocking the account would be the most ridiculous and absurd exercise. b I therefore agree with the minority judgment that the learned trial Judge was right that at the time of the cheques of the respondent was presented before the bank, the amount in his current account would not leave the mandatory c N5,000 which had been blocked pending the settlement of the draft. The learned trial Judge gave his reason why he believed that the cheques presented by the respondent were not dishonoured wrongfully in the following words:– d “If, on the 5/11/84, the opening balance in account No. 074 was N5,979.89 as I have held above, that the agreement between the Bank and the plaintiff is that at all times during the life of the overdraft in favour of PW2, the minimum to remain in the account should not be less than N5,000 can be said that there was sufficient e and available fund in this account when exhibit ‘B’ or ‘D’ was presented on 5/11/84? There was no sufficient and available fund to accommodate either of them or worse still, both. This is so because I believe that when these two cheques were presented, the f payment in exhibit ‘G’ had not been made. Similarly and for the same reason as above, when exhibits ‘E’ and ‘F’ were presented on 31/12/84 (the defendant was not sure that exhibit ‘E’ reached the Bank on 31/12/84) there was no sufficient fund in the account 074 to accommodate these cheques.” g There are several limitations to the banker’s duty to honour a cheque drawn by the customer. First, the banker is under an obligation to honour a cheque only if the customer’s ac- h count is either actually in credit, or, where it is in debit if the customer has been given an overdraft. Thus, if the customer has made a deposit, but a cheque is presented before the banker who has had reasonable time crediting the amount deposited into his account, he is not liable if he dishonours i the cheque. See Mazetti v. Williams (1830) IB. and Ad. 415, 424. The Manager in the cash in hand explained that when the cheques were presented, the N4,000 which the respondent directed to be paid into his account had not yet been j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC Savannah Bank of Nigeria Ltd v. Alhaji RA Salami 453 a credited to the account. It is therefore wrong to hold the bank liable for the dishonour of the respondent’s cheques if the banking practise is taken into consideration. b In the end, this appeal succeeds and it is allowed. The majority judgment of the Court of Appeal, together with all the orders made therein, are set aside. If any money had been paid to the respondent, it should be refunded. The decision c of the High Court which the minority judgment of the Court of Appeal set aside is hereby confirmed. I award N1,000 costs in favour of the appellant.

UWAIS CJN: I have had the opportunity of reading in draft d the judgment read by my learned brother Mohammed, JSC I agree that the appeal has merit. Accordingly I too allow the appeal and hereby set aside the e decision of the Court of Appeal with N1,000 costs against the respondent.

BELGORE JSC: I had the privilege of reading in advance the judgment of Mohammed, JSC with which I am in full f agreement. Parties are bound by their agreement and the lodgements in respondent’s account could not support his commitment to the appellant on the overdraft facility granted PW2 which he guaranteed. I find great merit in this g appeal and for the fuller reasons in the judgment of my learned brother, Mohammed, JSC I also allow this appeal setting aside the majority judgment. I also abide by the consequential orders as to costs made by Mohammed, JSC h OGUNDARE JSC: The plaintiff was at all times material to this action as a customer of the defendant bank. Sometimes in 1984 he stood guarantor for Royco Chemists and Super- market Limited who had applied for, and was granted, an i overdraft facility by the bank in the sum of N5,000. A condition of the guarantee was that the plaintiff would keep his current account in such a manner that the balance, at all times while the facility was being enjoyed by the borrower, j would not fall below the sum of N5,000. Apart from the [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 454 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. guarantee agreement (exhibit S) a letter, exhibit J was signed a by the plaintiff and forwarded to the defendant bank, exhibit J reads:– “The Manager, 22nd October, 1984 b Savannah Bank (Nig.) Ltd Ijebu Igbo, Dear Sir, This is to certify that I guarantee M/S Royco Chemist and Super- c market Ltd Ijebu Igbo for the sum of Five Thousand Naira (N5,000) and also agreed that my account be blocked for the same amount in the event the guarantee fails to pay back the overdraft on schedule. d Thanks Yours faithfully, R.A Salami and Sons 1 Ramisegun St., Oke Shopin, e Ijebu Igbo, Ogun State. (Sgd.) R.A. Salami f Managing Director”. While the overdraft facility remained unpaid, the plaintiff issued cheques on his account which were dishonoured by the defendant bank and in consequence, he instituted an ac- g tion against the defendant claiming a total of N50,000 special and general damages for wrongful dishonouring of his cheques. At the trial in the High Court of Ogun State, pleadings h were ordered, filed and exchanged; evidence was led for the parties. After addresses by learned Counsels for the parties, the learned trial Judge (Ajibola, J.) in a considered judgment, found that the dishonour of the plaintiff’s cheques in i question was not wrongful and dismissed the plaintiff’s action. The plaintiff appealed to the Court of Appeal. In a split decision (Sulu-Gambari, JCA and Ogwuegbu, JCA (as he then j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC Savannah Bank of Nigeria Ltd v. Alhaji RA Salami 455 a was), and Akanbi, JCA (as he then was) (dissenting), that the Court allowed the appeal, set aside the judgment of the trial High Court and entered judgment in favour of the plain- b tiff in the sum of N10,000 general damages with costs. It is against that judgment that the defendant bank has now appealed to this Court upon three grounds of appeal. Written briefs of arguments were filed and exchanged by c the parties. In the appellant’s brief the defendant bank poses the following question as calling for determination in this appeal:– “Whether the majority of the Court of Appeal (Sulu-Gambari and d Ogwuebgu, JJCA) was right in relying solely on exhibit ‘J’ to conclude that the defendant unlawfully dishonoured the plaintiff’s cheques and without taking into consideration evidence of the nature of the transaction of the parties to the transaction.” e The plaintiff in his own brief reframed the question as follows:– “Whether the majority decision of the Court of Appeal, Ibadan, (Sulu-Gambari and Ogwuegbu, JJCAs) as to the correct interpretation of exhibit ‘J’ in coming to the conclusion they reached was f right.” The learned trial Judge had found that the agreement between the bank and the plaintiff “is that at all times during g the life of the overdraft in favour of PW2, the minimum to remain in that account (plaintiff’s) should not be less than N5,000 and that at the time the cheques in question in this case were presented to the bank for payment, the plaintiff had less than that amount in his account. The Court of Ap- h peal (Majority decision) came to a different conclusion on the construction to be placed on the agreement between the parties. i Sulu-Gambari, JCA in his lead judgment observed:– “The first rule about the construction of documents enjoins that the simple natural meaning of the words be ascribed to them unless this is impossible, and the defendant must be severally precluded from giving oral evidence to disparage the clear expression already j reduced for the plaintiff in writing. If a document that is capable of [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 456 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

being interpreted clearly is misconstrued, nobody let alone an illit- a erate should be made to suffer any detriment for such misconstruc- tion. I have come to the conclusion in this respect that the learned trial b Judge has not given the document, exhibit ‘J’, its natural and ordinary meaning and that upon a close reading and study of that of the document, it is manifest that what was stated in exhibit ‘J’ is to the effect that the appellant’s current account No. 074 could be blocked if, and only if, the PW2 (Borrower) defaults in the repay- c ment of the overdraft facility of N5,000 (Five Thousand Naira) granted to him, after the expiration of three months. This period of time was supplied by the evidence of DW1 which had already been quoted at pages 37 to 38 of the record (supra)”. d The learned Justice of Appeal explained “It (exhibit J.) means that in the event the guarantee (borrower) fails to pay the overdraft on schedule, then the guarantor’s account would be blocked for the same amount. The schedule of payment was to ensure for the period of three months. In the course of the e specified period, the borrower complied with the terms of the repayment schedule. He paid in N1,000 and it was in evidence that he never defaulted. Having not defaulted therefore, the account of the guarantor does not become blockable. So as at the time the f cheques were being issued and presented for payment and were dishonoured by the bank, the act of dishonouring those cheques amounts to a breach of contract.” (first brackets are mine) g Ogwuegbu, JCA in his own contribution, observed:– “exhibit ‘J’ to my mind means what it says. That the appellant’s account should be blocked for the sum of N5,000 (Five Thousand Naira) in the event of the borrower’s failure to repay on schedule h i.e. 31/1/85. There is no evidence that the overdraft facility was due for repayment at the time the cheques were presented. There- fore until there is a default in repayment of the entire facility or any outstanding balances as at 31/1/85, the appellant’s account could not be blocked in the sum of N5,000. If the contrary is the i case, what would be the position where the borrower is owing N1,000 (one thousand Naira) before 31/1/85 and the appellant who has N4,000 (Four Thousand Naira) in his account issues a cheque for N2,000 (Two Thousand Naira) in favour of a third party? Will the said cheque not be honoured having regard to the terms of j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC Savannah Bank of Nigeria Ltd v. Alhaji RA Salami 457 a exhibit ‘J’? My answer is in the affirmative. One must consider the meaning of the words used and not what one may guess to be the intention of the parties. See Smith v. Lucas (1881) 18 Ch.D. 531 at 554. It is one of the cardinal rules of construction that the court b deals with a document according to the clear intention of the parties appearing in the four corners of the document itself. exhibit ‘J’ is clear and unambiguous and will therefore prevail. This is not a case where the intention of the parties collected from the expres- c sions used in the documents does not square with the words used in which case the intention would prevail. A situation might arise where the appellant withdraws all or substantial part of his money in his account before 31/1/85 to the extent that the respondent bank is still owed a larger amount by the d borrower. In such a case, the respondent bank should fall back on exhibit ‘S’ because they failed to stipulate in clear terms in exhibit ‘J’ that the account of the appellant should be block in the sum of N5,000 (Five Thousand Naira) during the duration of the overdraft e facility – 31/1/85. If there was any oral agreement it was embodied in exhibit ‘J’ and evidence cannot be given to prove its content. See Lagos Timber Co Ltd v. Titcombe (1943) 17 NLR 14 and Eke v. Odolofin (1961) All N.L.R. 404 at 406. Unfortunately in this case, the expressed intention of the respon- f dent bank in exhibit ‘J’ is different from what they really desired. Se Simpson v. Foxon (1907) pages 54 at 57. The words used in exhibit ‘J’ must be given their plain ordinary meaning since it would not lead to any absurdity or inconsistency with other expressions used therein or with exhibit ‘S’. g It is my humble opinion that the learned trial Judge misconstrued the true meaning and purport of exhibit ‘J’. He went outside the four walls of the document without any justification for doing so.” With profound respect to their Lordships of the Court below h they cannot on the evidence be right. To begin with, exhibit J was written by the plaintiff to the defendant and not the other way round. Secondly, there was evidence which the learned trial Judge accepted that before exhibit J was written i the bank manager explained fully to the plaintiff that he would be required to keep a minimum of N5,000 in his account during the period of the overdraft facility to Royco Chemists and Supermarket Ltd and the plaintiff agreed. Ex- j hibit ‘J’ was written by him in confirmation of his agreeing [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 458 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. to the condition. Akanbi, JCA summarised the facts very lu- a cidly in his dissenting judgment when he said:– “In the instant case to construe exhibit ‘J’ in the manner appellant’s Counsel would want me to do, is to over look the facts of the b case, the issue before the court and the nature of the transaction. PW2 the plaintiff’s own witness testified to the effect that the condition precedent to the grant of the overdraft was that he should procure a guarantor who has a current account with the bank, that guarantor must maintain in the account a minimum sum of N5,000 c of the overdraft and the sum has to be ‘blocked’ for the duration of the overdraft. The witness said that he duly communicated these requirements to his guarantor and it was in those premises that exhibit ‘J’ was written not by the leading bank but by the PW2 himself before the guarantor duly signed it. The trial Court adverted its d mind to these and came to the conclusion that the intention manifested in exhibit ‘J’ was that as long as PW2 continued to enjoy and operate the overdraft facilities, the appellant has to have at least N5,000 in his current account to support the overdraft. Indeed e exhibit ‘L’ which Alhaji Yinusa PW2 signed before he was allowed to take advantage of the overdraft facilities as I noted before clearly stipulated that the security was a ‘personal guarantee supported with a pledged current account No. 074’. After all exhibit ‘J’ was an additional security to exhibit ‘S’ which is in common f form.” I agree entirely with the learned Justice of Appeal when he observed:– “So in my view to construe exhibit ‘J’ without reference to the cir- g cumstances that brought it to life, is to create an absurd situation whereby exhibit ‘J’ would be rendered as useless piece of document guaranteeing nothing conferring no right whatsoever and no obligation either. Were that the intention of the parties there would h have been no need for exhibit ‘J’ to be executed when already exhibit ‘S’ contained some form of guarantee. Equally so, the endorsement refereed in exhibit ‘L’ would also have been unnecessary.” In my respectful view, the interpretation placed on exhibit J i by the learned trial Judge and confirmed by Akanbi, JCA is the correct one having regard to the circumstances of this case. And as it is not in dispute that the times the plaintiff’s four cheques were presented for payment he had up to j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC Savannah Bank of Nigeria Ltd v. Alhaji RA Salami 459 a N5,000 in his account, those cheques were rightly dishonoured by the defendant bank. I accordingly answer the only question placed before us in this appeal in the negative. b It is for the above reason that I agree with my learned brother Mohammed, JSC that this appeal be allowed. I too allow it, set aside the judgment of the Court below and restore that of the trial High Court dismissing plaintiff’s case. I c abide by the order of costs made by my learned brother Mo- hammed, JSC IGUH JSC: I have had the pleasure of reading in draft the judgment just delivered by my learned brother Mohammed, d JSC And I agree entirely that there is substance in this appeal and that the same ought to be allowed. What called for determination before the trial Court was whether the plaintiff’s cheques, exhibits B and D of the 5th e November, 1984 for N1,000 and N3,000 respectively and exhibits E and F of the 31st December, 1984 for N1,000 and N2,000 respectively were rightly dishonoured by the defendant. The answer to this question is essentially dependent on f the main issue for decision in this appeal. This is whether the current account No.074 of the plaintiff who guaranteed the N5,000 overdraft facility granted by the defendant to PW2 Alhaji Yinusa, was subject to “blockage” in the sum of g N5,000 during the subsistence of the facility. Whereas the trial Court resolved this issue in the affirmative, the majority judgment of the Court of Appeal was on a contrary view hence this appeal. h With profound respect to the Court of Appeal, it would seem that it has based its judgment solely, but erroneously, on the interpretation of exhibit J as if that document constituted the contract of guarantee between the plaintiff and the i defendant in respect of N5,000 overdraft facility granted by the defendant to PW2. Without doubt, the contract between the parties was exhibit S, the Bank’s standard “Continuing Guarantee” form which the plaintiff duly executed. exhibit J j is a mere letter dated 22nd October, 1984 which PW2, the [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC 460 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. beneficiary of the overdraft facility, wrote in his own words a to the defendant on behalf of the plaintiff. Although the plaintiff signed exhibit J, it cannot be seriously argued that it constituted the contract of guarantee between parties. Al- b though, I am prepared to accept the observation in the minority judgment of the Court of Appeal that exhibit J at best is an “additional security” to exhibit S, it is clear to me that there is no evidence of its acceptance in law by the defendant bank. c Turning now to the interpretation of exhibit J, it is convenient at this stage to reproduce it. It reads thus:– “The Manager, d Savannah Bank (Nig.) Ltd, Ijebu Igbo. Dear Sir, This is to certify that I guarantee M/S Royco Chemist and Super- e market Ltd, Ijebu Igbo for the sum of N5,000 (Five Thousand Naira) and also agreed that my account be blocked for the same amount in event the guarantee fails to pay back the overdraft on schedule. Thanks. f Yours faithfully, R.A. Salami and Sons 1, Ramisegun Stret, Oke Shopin, g Ijebu Igbo, Ogun State. Sgd. R.A, Salami h Managing Director.” The appellant’s contention is that although extrinsic evidence is not admissible to contradict or vary a written contract, such evidence is admissible for the purpose of apply- i ing it to the facts which the parties had in their mind at the time of making the contract or to explain it or identify the subject matter. It was therefore submitted that the evidence of what happened at the time exhibit J was made is admissible and that the trial Court was right to have relied on the j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC Savannah Bank of Nigeria Ltd v. Alhaji RA Salami 461 a evidence of both the defendant and the plaintiff’s own witness, to arrive at the correct or real meaning of the words therein employed. In the view of the appellant, the only rea- b sonable interpretation that could be given to the contents of exhibit J is that the account of the guarantor must not fall below N5,000 at any time before the overdraft is fully repaid. c The respondent has argued that since the contents of exhibit J are not ambiguous, the clear duty of the court is to give the document its natural and ordinary meaning and it interpret it as it is and ignore any extrinsic evidence that may d seek to explain the document. The submission is that since the contents of exhibit J are not ambiguous, the only plain reasonable interpretation to it is that the plaintiff’s current account could only be blocked after PW2 had defaulted in the repayment of the overdraft facility granted to him. e It cannot be disputed that when a transaction has been reduced to, or recorded in writing by the agreement of the parties, extrinsic evidence is, as a general rule, inadmissible to f contradict, vary add or subtract from the terms of the document. But there are several exceptions to this general rule of evidence. So evidence may, again, as a general rule, be admissible to contradict or vary a private document intended g by the parties to operate merely as a collateral or informal memorandum of a transaction, and not as agreement, contract or other binding legal instrument. Where a contract, not required by law to be in writing, purports to be contained in a document which the court is justifiably satisfied was not h intended to express the whole agreement between the parties, proof may be given of any omitted or supplemented oral term expressly or impliedly agreed between them before or at the time of the execution of the document, if it be in- i consistent with the documentary terms. Even where there exists a contract purporting to be fully expressed in writing, whether required by law to be so or not, proof may be given of a prior or contemporaneous oral agreement or warranty, j not inconsistent with the document, and which forms part of [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC 462 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the consideration for the main contract. See Webster v. Hig- a gin (1948) 2 All E.R. 127, Strongman (1945) LD v. Sincock (1955) 2 Q.B. 525 etc. However both the terms of the collateral agreement and animus contrahendi of the parties thereto b must be strictly proved. The burden of proof is upon the party who alleges non-completeness of the full terms of the document. See Tucker v. Bennet 38 Ch.D.1 at 9. Another qualification to the general rule is where there ex- c ists a separate oral agreement constituting a condition precedent and with reference to any obligation under contract. In such circumstance extrinsic evidence of such oral agreement is admissible in interpreting the contract. See section 132 of d the Evidence Act. And although evidence of surrounding circumstances may not be admissible for the purpose of adding to a deed, a stipulation to which the parties did not intend by that deed to agree; if the Court, knowing the terms of a deed and all the circumstances surrounding its execu- e tion, is satisfied that the parties intended by that instrument to agree to terms which though not clearly expressed, are in its belief to be implied in it, there is no reason why it should not give effect to it. See Government of Kelatan v. Duff De- f velopment Company Ltd (1923) A.C. 395 at 412 and Hamlyn and Co v. Wood and Co (1981) 2 Q.B. 488. Extrinsic evidence to some extent, may therefore, be admissible to show the true nature of the transaction of the apparent intention of g the parties although such evidence may vary or add to the written instrument. See too Olagunju v. Raji and Another (1986) 2 N.W.L.R. (Part 42) 408 at 419. As I have already observed, exhibit J is clearly not the con- h tract or agreement of guarantee between the plaintiff and the defendant. It is a mere private letter written by PW2, the beneficiary of the overdraft facility to the defendant bank. PW2 in exhibit J, employed his own words to the best of his i ability to confirm the already concluded transaction between the defendant bank and the plaintiff as the guarantor of the overdraft facility granted to PW2. This same writer, PW2, unequivocally admitted in his evidence that the defendant bank’s manager made it clear to him that the guarantor’s ac- j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC Savannah Bank of Nigeria Ltd v. Alhaji RA Salami 463 a count must not fall below N5,000 during the subsistence of the overdraft facility and that he explained this fact to the plaintiff. Of his evidence, the learned trial Judge stated b thus:– “PW2 did not claim to be an expert in English Language. He put the gist of what the bank wanted into exhibit ‘J’ using the word “blocked” to mean that the minimum in the guarantor’s account No. 074 must not be less than N5,000 during the period of the c overdraft.” I agree with the learned trial Judge on this observation. It is clear to me that it was the very terms of the guarantee as offered by the defendant and accepted by the plaintiff and d PW2 that he reconstructed in exhibit J to the best of his knowledge of the English language. In the second place, exhibit J was clearly not legally bind- e ing extract of guarantee between the parties in the transaction. As already indicated, it was at the “additional security” or collateral memorandum in respect of the same transaction. It is finding of the learned trial Judge, and this is amply supported by the accepted evidence of the plaintiff’s own f witness, PW2 that exhibit J, did not expressly contain the whole terms of the agreement between the parties. The sup- plemental oral term expressly agreed to between the parties before exhibit J was written does not, on the evidence of g PW2 and the finding of the learned trial Judge, appear to be inconsistent with the document itself. Additionally, the defendant on whom the burden of proof rested established both by its evidence and that of the plaintiff’s witness. PW2, the h non completeness of exhibit J. It was further established that there was a prior or contemporaneous oral agreement between the parties which formed part of the consideration for the main contract of guarantee. i This prior agreement was to the effect that the plaintiff’s account, while the overdraft facility lasted, must never fall below N5,000 to guard against possible failure by PW2, to repay the overdraft on schedule. I think, having regard to the j above circumstances, that the trial court was fully justified [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC 464 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. in coming to the conclusion that the manifest intention of the a parties was that as long as PW2 operated and enjoyed his overdraft facilities the plaintiff must have at least N5,000 in his relevant account as security against any possible breach b of repayment on the part of PW2. In view of my above findings, I am unable to subscribe to the view of the majority decision of the court below to the effect that the transaction between parties is to the effect that c the plaintiff’s account could be blocked if, and only if, PW2 defaulted in the repayment of his overdraft facility of N5,000. There is finally the further finding of the learned trial d Judge, with which I am in full agreement, that if any of the cheques, exhibits B, D, E and F were paid at the time of presentation, the balance of the money in the plaintiff’s account would be insufficient to support the overdraft. In the e circumstances, the trial court was quite right to have held that the plaintiff’s relevant cheques were not unlawfully dishonoured and to have dismissed the plaintiff’s claim. It is for the above and the more detailed reasons contained f in the leading judgment of my learned brother, Mohammed, JSC that I too allow this appeal. The majority judgment and orders of the Court of Appeal are hereby set aside. The decision of the trial court is hereby restored together with the or- g der for costs therein made. I abide by the order for costs contained in the leading judgment. Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Federal Republic of Nigeria v. Patrick U. Eze and Others 465 a Federal Republic of Nigeria v. Patrick U. Eze and Others (No. 2) b FAILED BANKS TRIBUNAL, ZONE V, LAGOS AUGIE J Date of Judgment: 8 OCTOBER 1996 Suit No.: FBFMT/L/ZV/1C/96 c Banking – The business or operation of a bank – Offences relating thereto under any enactment, Failed Banks Tribunal – Jurisdiction – Whether the Tribunal could try offences – Whether the Tribunal has the sole and exclusive jurisdiction d to try offences relating to the business or operation of a bank under any other enactment apart from Banks and Other Financial Institutions Decree (BOFID) and the Nige- ria Deposit Insurance Corporation (NDIC) Decree – Whether the Tribunal could try offences committed before e the commencement of the Failed Banks Tribunal

Facts The third accused was alleged to have conspired to commit a f felony:– “to wit, granting credit facilities to Sebastian Uguagwu without authority in contravention of the rules and regulations of the bank and committed an offence punishable under section 3(1)(d) of the g Failed Banks Decree No. 18 of 1994.” The fifth accused in Count 18 is alleged to have also committed a felony:– “to wit, you committed the offence of forgery in that you fraudu- h lently included in the list of company’s whose cheques are accommodated for guidance facility in respect of account No. 4319 at Nsukka Branch of the bank, the names of companies not approved by the Executive Director and you committed an offence punishable under section 467 of the Criminal Code – read together i with section 3(1)(d) of Decree No. 18 of 1994.” Counsel to the third and fifth accused persons raised a preliminary objection challenging the jurisdiction of the Tribunal to try charges against his clients after five witnesses had tes- j tified for prosecution on the grounds:– [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

466 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(1) That the Honourable Tribunal has no jurisdiction un- a der section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (hereinafter referred to as “the De- b cree”) to try the charges in Counts 9, 12 18 against the third and fifth accused persons. (2) That the Honourable Tribunal is not competent to try the charges in Counts 9, 12 and 18 against the third c and fifth accused persons on the ground that the charge in each of the counts is void for vagueness, uncertainty and ambiguity. Counsel agreed that the Tribunal was empowered to try d “other offences relating to the business or operations of a bank under any enactment” not any act relating to the business or operation of a bank under any enactment. In other words, that the enactment creating the offences by express e words of its title or by the necessary implications of its title, not any act done after its promulgation by any one, is the sole determinant as to whether these offences relate to the business or operation of a bank. f In opposing the application, Counsel for the prosecution argued that the arguments of Counsel for the accused were a complete misconception of the true meaning of section 3(1)(d) of the Decree in that the limitation is not with regard g to the type of enactment but rather to the type of offence. He further argued that if the offence has anything to do with the business or operation of the bank, then it becomes subject to the jurisdiction of the Tribunal. h Concerning the allegation of vagueness of the charge, Counsel to the accused argued that the wording of the charges were susceptible to at least three interpretations in that the phrase “read together with section 3(1)(d)” of the i Decree may be interpreted:– (i) as meaning as modified by section 3(1)(d) by addition, enlargement, substraction, restriction or otherwise. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Federal Republic of Nigeria v. Patrick U. Eze and Others 467 a (ii) to mean as incorporated by section 3(1)(d) by reference into the Decree. (iii) as being meaningless. b Counsel argued that it is meaningless and void because section 3(1) does no more than set out the jurisdiction of the Tribunal and the jurisdiction of the Tribunal cannot form part of the offences charged against the accused persons. c The Prosecutor argued that the charge was not vague as it contained all the requirements of a valid charge and the accused did not raise objection immediately the charge was read but participated in the proceedings by cross-examining d the five witnesses called by the prosecution. Counsel to the accused also argued that since the acts charged against the third and fifth accused persons took place before 9th November, 1994, the commencement date e of the Decree, the Tribunal had no jurisdiction to try them. Responding Counsel to the prosecution submitted that bringing the charge before the Tribunal was only in accordance with the legal principle that while the procedure was gov- f erned by the law at the time of trial, the charge and conviction relate to the law at the time of commission of the offence. Dismissing the preliminary objection, the Tribunal. g Held – 1. That the offences stated in the charges against the third and fifth accused persons were offences relating to the h business or operation of a bank and as long as the offences had to do with business or operation of the bank, then it did not matter under what ever enactments it may be, it becomes subject to the jurisdiction of the Tribunal. i 2. By virtue of the provisions of section 3(1)(d) of the De- cree, the Tribunal is empowered to try offences relating to the business or operation of a bank under any enactment in addition to trying the offences specified in Part j III of the Decree, BOFID and NDIC since the Decree [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

468 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

did not say “try other offences under any enactment re- a lating to the business or operation of the bank” but rather “try other offences relating to the business or operation of a bank under any enactment”. b 3. By virtue of the Failed Banks Decree, the Tribunal has the sole and exclusive jurisdiction to try all the offences relating to the business or operation of a bank under any other enactment including the Criminal Code, Penal c Code, BOFID, NDIC Decree etc. 4. Since the accused were charged with conspiracy and forgery respectively under the Criminal Code, no matter how long ago the offence was allegedly committed once d it is an offence relating to the business or operation of the bank under any enactment, the Tribunal could try it. Preliminary objection of the third and fifth accused persons dismissed. e

Cases referred to in the judgment Nigerian f A.G. Federation v. Sode (1990) 1 N.W.L.R. (Part 128) 500 Abiola v. FRN (1995) 3 N.W.L.R. (Part 382) 203 Bature v. The State (1994) 1 N.W.L.R. (Part 320) 267 g Ekpo v. Calabar LGA (1993) 3 N.W.L.R. (Part 281) 324 Federal Republic of Nigeria v. Abubakar (1997) 1 FBTLR 129 Governor Anambra State v. Anah (1995) 8 N.W.L.R. (Part 412) 213 h Lekwot v. Judicial Tribunal (1993) 2 N.W.L.R. (Part 276) 410 Madike v. I.G.P. (1992) 3 N.W.L.R. (Part 227) 70 Mattaradona v. Ahu (1995) 8 N.W.L.R. (Part 412) 225 i Obakpolor v. State (1991) 1 N.W.L.R. (Part 165) 113 Okafor v. A.G Anambra (1991) 6 N.W.L.R. (Part 200) 659 Okoroafor v. Misc. Offences Tribunal (1995) 4 N.W.L.R. (Part 387) 59 j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Federal Republic of Nigeria v. Patrick U. Eze and Others 469 a Onyeanusi v. Misc. Offences Tribunal (1995) 8 N.W.L.R. (Part 415) 628 Sele v. The State (1993) S.C.N.J. 15 b State v. Onagorowa (1992) 2 N.W.L.R. (Part 221) 33 Tafida v. Abubakar (1992) 3 N.W.L.R. (Part 230) 511

Foreign c Connally v. General Construction Co (1926) 269 US 385 at 391 Jordan v. De George (1951) 342 US 223 d Williams v. United States (1951) 341 US 97 Winters v. New York 333 US 507

Nigerian statutes referred to in the judgment e Criminal Procedure Act Cap 80 Laws of the Federation of Nigeria 1990, section 167 Failed Banks (Recovery of Debts) and Financial Malprac- f tices in Banks Decree No. 18 of 1994 (as amended), section 3(1)(d)

Counsel g For the third and fifth accused: Prof. Ben Nwabueze, SAN For the Prosecution: Mr Idris Abubakar

Judgment h AUGIE J: This is a preliminary objection raised by Prof. Ben Nwabueze SAN, challenging the jurisdiction/competence of the Tribunal to try the charges against the third and fifth ac- i cused persons. The grounds for the said objection are as follows:– (1) That the Honourable Tribunal has no jurisdiction under section 3(1)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No.18 of 1994 j (hereinafter referred to as “The Decree”) to try the charges [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 470 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

in counts 9, 12 and 18 against the third and fifth accused a persons. (2) That the Honourable Tribunal is not competent to try the charges in counts 9–12 and 18 against the third and fifth ac- b cused persons on the ground that the charge in each of the counts is void for vagueness, uncertainty, and ambiguity. Prof. Nwabueze, SAN raised this objection after five witnesses had testified for the prosecution. The law permits him to do so as it has been said times without number, that the c issue of jurisdiction of a court is fundamental, and its being raised in the course of proceedings can neither be too early or premature nor too late. This is because if there is a want of jurisdiction, the proceedings of the court will be affected d by a fundamental vice and would be a nullity however, well conducted the proceeding might otherwise be. See Lekwot v. Judicial Tribunal (1993) 2 N.W.L.R. (Part 276) 410; Bature v. The State (1994) 1 N.W.L.R. (Part 320) 267; Gov. Anam- e bra State v. Anah (1995) 8 N.W.L.R. (Part 412) 213. See also The State v. Onagoruwa (1992) 2 N.W.L.R. (Part 221) 33 where Akpata, JSC stated at pages 58–59:– “It is now common place, indeed a well beaten legal track, that ju- f risdiction is the legal right by which courts exercise their authority. It is the power and authority to hear and determine judicial proceedings. A court with jurisdiction builds on a solid foundation because jurisdiction is the bedrock on which court proceedings are based. But when a court lacks jurisdiction and continues to hear g and determine judicial proceedings it builds on quicksand and all proceedings and steps based on it will not stand.” Prof. Nwabueze, SAN submitted a 22 paragraph brief of argument in support of the motion. Paragraphs 1–11 of the h said brief addressed the issue of jurisdiction, wherein he argued that what the Tribunal is empowered to try is “other offences relating to the business or operation of a bank under any enactment,” not any act relating to the business or op- i eration of a bank under any enactment. He submitted that the distinction sought to be drawn between an offence and an act is crucial in the interpretation of section 3(1)(d) of the De- cree. He pointed out that a criminal offence is a legal prohibition under penal sanction, and that what is so prohibited j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Patrick U. Eze and Others 471 a may be an act, an omission an utterance etc. He then argued that it is the legal prohibition under penal sanction that must relate either by express words or by necessary implication to b the business or operation of the bank. He contended that the test is whether, before any act is done by anyone, or when no act has been done by any one or without reference to any act done by any one, it can be said simply by looking at the title or provisions of the relevant enactment, that they, by c express words or by necessary implication, create an offence in relation to the business or operation of a bank, and that the test is not whether such act relates to the business or operation of a bank. Prof. Nwabueze further submitted that d aside from the offences specified in Part III of the Decree, BOFID, 1991 and the NDIC Decree, 1988, the best example illustrating the limits of the jurisdiction of the Tribunal under section 3(1)(d) are the offences created by the Dishon- e oured Cheques (Offences) Act Cap 102 Laws of the Federa- tion of Nigeria, 1990. He submitted that the title of the enactment necessarily implies that the offences created thereunder relate to the business or operation of a bank, as only f banks print and give out Cheques as part of their business or operations. Secondly, that section 1(1) of the Act refers expressly to a bank and by merely looking at the title of the enactment and the terms of the offences as set out in the provisions of the enactment and before any act is done by g anyone, it can be said right away that the offences created by the Dishonoured Cheques (Offences) Act relate to the business or operation of a bank. h Prof. Nwabueze also submitted that the word “offences” in section 3(1)(b) and (c) bears the same meaning and has the same intendment as in section 3(1)(d), viz. a legal prohibition sanctioned by a penalty and argued that the title “Failed Banks Decree” and the terms of the offences created by the i provisions in Part III of the Decree make it clear that the offences specified in that part relate to the business or operation of a bank, even before any act is done by anyone or when no act has been done by any one. In other words, that j the enactment creating the offences by express words of its [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 472 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. title or by the necessary implication of its title, not any act a done after its promulgation by any one, is the sole determinant as to whether these offences relate to the business or operation of a bank. b In opposing the application, Mr Idris Abubakar, learned Counsel for the prosecution, submitted that the arguments of Prof. Nwabueze are a complete misconception of the true meaning of section 3(1)(d) of the Decree in that the limita- c tion is not with regard to the type of enactment but rather to the type of offence. It is his contention that if the offence has anything to do with business or operation of the bank, then it does not matter under what ever enactment it may be, it be- d comes subject to the jurisdiction of the Tribunal. He then argued that if the legislature had intended that it is only enactments relating to the business or operation of the bank that should be subject to the jurisdiction of the Tribunal, it e should and would have said so by rewording subsection (d) to read “try other offences under any enactment relating to the business or operation of the bank”, as the words “business or operation” would have qualified the enactment. Mr f Abubakar further submitted that the prosecution’s position is amply supported by the decision of the Special Appeal Tri- bunal in the case of Federal Republic of Nigeria v. Mallam S.B. Abubakar SAT/MO/240/95 of 16/4/95 (1997) 1 F.B.T.L.R. 129 which is binding on this Tribunal. g To start with, for an objection to the jurisdiction of the court to succeed, the following must be shown to be non- existent:– h (a) that the court is properly constituted as regards members of the bench, and that no member is disqualified for one reason or the other; (b) the subject matter of the case is within its jurisdiction i and there is no feature in the case which prevents the court from exercising its jurisdiction; and (c) the case comes before the court initiated by due process of law and upon fulfilment of a condition j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Patrick U. Eze and Others 473 a precedent to the exercise of jurisdiction. See Abiola v. Fed. Rep Of Nigeria (1995) 3 N.W.L.R. (Part 382) 203, Bature v. The State (supra); The State v. Ona- b goruwa (supra). In the instant case, the challenge of jurisdiction is as to the subject matter of the case and it is trite law that a court or Tribunal as in this case, has the jurisdiction to determine whether it has juris- c diction in respect of the subject matter. See Okafor v. A.G. Anambra (1991) 6 N.W.L.R. (Part 200) 659. It is essential for jurisdiction that the point to be decided is within the power of the court. The emphasis is in the expres- d sion “powers”, for jurisdiction is sometimes defined as the “power” of the courts to entertain the pending action. Courts are creatures of statute. All superior courts of record are in- vested with defined jurisdiction by our Constitution. Other e laws may extend such jurisdiction. Similarly, the Constitu- tion or other laws may, in certain cases or class of cases, also abridge, constrict or even oust such jurisdiction of a court which formally existed. See Lekwot v. Judicial Tribu- f nal (supra). The powers of this Tribunal in respect of criminal matters are set out in section 3(1) of the Decree and I agree with Prof. Nwabueze that section 3(1)(d) of the Decree can only g be correctly interpreted in the context of the 2 preceding sub-paragraphs of the subsection which reads as follows:– 3(1) “The Tribunal shall have power to:– (a) . . . h (b) try the offences specified in Part III of this Decree; (c) try the offences specified in BOFID (Banks and Other Financial Institutions Decree, 1991 and the NDIC De- cree, 1988; and i (d) try other offences relating to the business or operation of a bank under any enactment.” But I do not agree with him that the distinction sought to be drawn between an offence and an act is crucial in the inter- j pretation of section 3(1)(d) of the Decree. I am of the view [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 474 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. that the emphasis should be more on the expression “relating a to the business or operation of a bank under any enactment.” The Tribunal has power to try offences specified in part 111 of the Decree, offences specified in BOFID and the NDIC b Decree, and finally, “offences relating to the business or operation of a bank under any enactment”. “Offence” is defined in section 2 of the Criminal Code and it reads as follows:– c “An act or omission which renders the person doing the act or making the omission liable to punishment under this code, or under any Act, or Law is called an offence.” The main gist of Prof. Nwabueze’s arguments is that this d Tribunal lacks jurisdiction to try the third and fifth accused persons because in contrast to the offences created under BOFID and the NDIC Decree specifically mentioned in section 3(1)(c) of the Decree, the offences under or created by e sections 390, 419, 467 and 516 of the Criminal Code with which the accused persons are charged, do not, either by the express words of the provisions in those sections or by necessary implication refer to a bank or relate to the business or f operation of a bank. He insisted that they are general offences in the sense that they have a generality of application to the business, operations, activities or acts of all persons, corporate and unincorporate. g To buttress his arguments, he gave the following examples of acts which he said relate to the operation or business of a bank and which may constitute offences under the Criminal Code or other enactment:– h (1) An outsider, not a director or employee of a bank steals its name stamp, seal, ledger card. (2) Bank robbery by a gang of armed men who make i away with all the money in the bank’s vault, killing many of the bank’s staff and halting all transaction or operations in the bank for several days after the robbery. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Patrick U. Eze and Others 475 a (3) A customer of a bank angered by the long delay in cashing a cheque, jumps over the counter, assaults a lady cashier and stabs five male bank staff attempt- b ing to rescue the lady cashier, creating such a pan- demonium as brings all operations or transactions in the bank to a halt.

(4) An outsider, not a director, employee or customer of c a bank, for reasons unknown sets the bank’s building on fire which razes the building completely, destroy- ing all its property, money, books of account, etc. d Prof. Nwabueze then posed the question, whether such acts or similar examples are triable by the Tribunal merely because they relate to the business or operation of a bank and may constitute offences under the Criminal Code or other e enactment. In answering the question, he said, regard must be had to section 2 of the Decree which, except for cases already pending at the commencement of the Decree, ousts the jurisdiction of the courts in respect of all matters within the f jurisdiction of the Tribunal. Prof. Nwabueze was therefore of the view that it is not, and cannot be the intention of the Decree, that the Tribunal shall be the sole and exclusive Tri- bunal for the trial of all acts relating to the business or op- g eration of a bank which are offences under some enactment. On his own part, Mr Idris Abubakar, learned Counsel for the prosecution, argued that the various examples given by Prof. Nwabueze only illustrate that there are offences that do h relate to the business or operation of the bank, such as stealing the money of the bank by abuse of it’s process and granting credit facilities without lawful authority. He submitted that granting credit facility is part of the banking i process and forging a bank document to facilitate circum- vention of credit facility are obviously offences connected with the business or operation of the bank and are no where near the examples given by Prof. Nwabueze. He therefore j submitted that the interpretation put on section 3(1)(d) of the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 476 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Decree and the arguments of Prof. Nwabueze thereon are a totally misconceived. I agree with Mr Abubakar, that the examples given by Prof. Nwabueze are quite farfetched and are obviously not b offences relating to the business or operation of the bank. On the other hand, in Count 9 of the charge before the Tribunal, the third accused is alleged to have conspired to commit a felony:– c “to wit, granting credit facilities to Patrick Ugwu Eze without lawful authority in contravention of the rules and regulations of the bank and thereby committed an offence punishable under section 516 of the Criminal code — read together with section 3(1)(d) of d the —— Decree No. 18 of 1994.” In Count 12 of the charge, the third accused is also alleged to have conspired to commit a felony:– “to wit, granting credit facilities to Sabastian Ugwuagu without e lawful authority in contravention of the rules and regulations of the bank and thereby committed an offence punishable under section 51 of the Criminal Code — read together with section 3(1)(d) of the —— Decree No.18 of 1994.” f The fifth accused in Count 18 is alleged to have also committed a felony:– “to wit, you committed the offence of forgery in that you fraudulently included in the list of company’s whose cheques are ac- g commodated for guidance facility in respect of account No. 4319 at Nsukka Branch of the bank, the names of companies not approved by the Executive Director and you committed an offence punishable under section 467 of the Criminal Code —— read together with section 3(1)(d) of —— the Decree No. 18 of 1994.” h In criminal matters, it is the charge before the court that de- termines the jurisdiction of the court to entertain the matter. I am not allowed to consider the evidence adduced by the prosecution witnesses in coming to a decision whether or not i the Tribunal has jurisdiction. What a court will consider in coming to such a decision is the charge or charges before the court outlining the offence or offences alleged to have been committed by the accused persons and not the evidence j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Patrick U. Eze and Others 477 a adduced by the witnesses. See Mattaradona v. Ahu (1995) 8 N.W.L.R. (Part 412) 225. I have no hesitation whatsoever in agreeing with Mr b Abubakar that the offences outlined in the charges against the third and fifth accused persons are offences relating to the business or operation of a bank and as long as the offence has to do with business or operation of the bank, then c it does not matter under what ever enactment it may be, it becomes subject to the jurisdiction of the Tribunal. Using Prof. Nwabueze’s line of argument that only banks print and give out cheques as part of their business or operations, is it not obvious also that the acts of granting of credit facilities d without lawful authority in contravention of the rules and regulations of the bank and forging of bank documents to fraudulently include the names of companies not approved by the Executive Director in the list of companies whose e cheques are accommodated for guidance facility are acts relating to the business or operation of a bank. It is elementary law that in the interpretation of statutes, the court is concerned with the intendment of the statute. In f this connection, the statute must be examined as a whole with a view to determining the object it was intended to serve. In addition, it should be interpreted broadly so as not to defeat the intention of the law maker. See Onyeanusi v. g Misc. Offences Tribunal (1995) 8 N.W.L.R. (Part 415) 628; Ekpo v. Calabar LGA (1993) 3 N.WL.R. (Part 281) 324; Ta- fida v. Abubakar (1992) 3 N.W.L.R. (Part 230) 511. It is also trite law that a court of law is concerned with law h as it is and not with law as it ought to be. Thus, a court is not to ascribe meanings to the clear, plain and unambiguous provisions of a statute in order to make such provisions conform with the court’s own view of their meaning or of what they ought to be in accordance with the tenets of sound so- i cial policy. See Onyeanusi v. Misc. Offences Tribunal (supra); A.G. Fed. v. Sode (1990) 1 N.W.L.R. (Part 128) 550. Now, the provision of section 3(1)(d) of the Decree is quite clear, plain and unambiguous; this Tribunal is empowered to j try other offences relating to the business or operation of a [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 478 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. bank under any enactment, in addition to trying the offences a specified in Part III of the Decree and offences specified in BOFID and the NDIC Decree. I agree with Mr Abubakar, that if it is only enactments relating to the business or opera- b tion of the bank that should be subject to the jurisdiction of the Tribunal, it would have been so stated in the Decree. Section 3(1)(d) of the Decree did not say “try other offences under any enactment relating to the business or operation of the bank”, but rather “try other offences relating to the busi- c ness or operation of a bank under any enactment”. A cursory look at the provisions of the Decree, it’s title and particularly the name of this Tribunal established by the De- d cree, “Failed Banks (Recovery of Debts) and Financial Mal- practices in Banks Tribunal”, shows clearly that contrary to Prof. Nwabueze’s contention, it is in fact the intention of the Decree, that the Tribunal shall be the sole and exclusive Tri- bunal for the trial of all offences relating to the business or e operation of a bank under any other enactment apart from BOFID and the NDIC Decree. In other words, the Decree gives the Tribunal power to try other offences relating to the business or operation of a bank under any enactment. “Any f enactment” under the provision of section 3(1)(d) of the De- cree, must in my view include the Criminal Code, Penal Code etc, provided the offence charged must relate to the business or operation of a bank. g I am strengthened in this view by the decision of the Spe- cial Appeal Tribunal in the recent case of Federal Republic of Nigeria v. Mallam S.B. Abubakar (supra), which Mr Abubakar rightly observed is binding on this Tribunal. See h section 5(1) and (2) of the Decree. In that case, one of the issues for determination was whether the Lower Tribunal had jurisdiction to try offences created by the Criminal Code of Lagos State. In holding that the lower Tribunal had jurisdiction to try such offences, the Special Appeal Tribunal as i per Agbaje, JSC (as he then was) observed as follows on page 150:– “It is pertinent to note here that section 3(1)(d) of the Decree does not say that the Tribunal shall have power to try ‘other offences j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Patrick U. Eze and Others 479 a relating to banks and banking’ but ‘other offences relating to the business or operation of a bank under any enactment’. BOFID provides for the offences relating to ‘banks and banking’. How- ever, in the business or operation of a bank, offences may be b committed by the director of the bank with respect to the commodity in which a bank deals, that is to say money, or with respect to the books which a bank keeps. Such offences, in our view, do not necessarily contravene the laws relating to banks and banking. But c they have to do with something arising from the business or operation of a bank. Such offences may be stealing of the money of the bank, fraudulent false accounting and false entries in the books of the bank. Laws relating to banks and banking regulate and control (1) the establishment of banks and (2) the banking business. They d do create offences and penalties for the contravention of the regulations in that regard. Such a law is BOFID. ——— We agree with Chief Williams S.A.N that the provisions in the Criminal Code relating to conspiracy, stealing, false entries and fraudulent false accounting are State Laws. So in our judgment, the offences e charged in this case are State offences. But the offences, in our judgment do not relate to banks or banking but relate to the business or operation of a bank.” (Italics mine.) In view of the foregoing, I hold that this Tribunal has the ju- f risdiction under section 3(1)(d) of the Decree to try the charges in Counts 9, 12 and 18 against the third and fifth accused persons. The objection of Prof. Nwabueze, SAN on this issue is hereby overruled. g On the second issue of lack of competence by the Tribunal to try the offences as charged on the ground of their being void for vagueness, Prof. Nwabueze submitted that it is a principle of our criminal justice that the terms of an offence, h either as defined in the law creating it or as charged, must be clear and unambiguous. He referred the Tribunal to the decision of the Supreme Court of the United States of America in Connally v. General Construction Co 269 U.S. 385 at 391 i (1926) applied in Winters v. New York 333 U.S. 507, and Williams v. United States 341 U.S. 97 (1951), wherein the court held that a law creating a criminal offence is void if it uses terms “so vague that men of common intelligence must j necessarily guess at its meaning and differ as to its [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 480 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. application”. He also referred to the American case of Jor- a dan v. De George 341 U.S. 223 (1951) where Justice Jack- son held that an offence or a criminal charge is void if its terms are so vague as to be meaningless. b It is Prof. Nwabueze’s contention that the question raised by the offences as charged is as to what the charges mean. He is of the view that the wording of the charges are susceptible to at least three interpretations in that the phrase “read c together with section 3(1)(d)” may be interpreted:– (i) as meaning as modified by section 3(1)(d) by addition, enlargement, subtraction, restriction or otherwise; d (ii) to mean as incorporated by section 3(1)(d) by reference into the Decree; (iii) as being meaningless. e Prof. Nwabueze argued that it is meaningless because section 3(1) does no more than set out the jurisdiction of the Tribunal and the jurisdiction of the Tribunal cannot form part of the offences charged against the accused persons. He f therefore submitted that the charges are so vague that “men of common intelligence must necessarily guess at its meaning” and argued that since the terms are not just vague but meaningless, the charges are accordingly void. He further g submitted that the provisions of sections 162–165 of the Criminal Procedure Act Cap 80 Laws of the Federation of Nigeria, 1990 relating to variations of a charge presuppose that there is before the Tribunal a valid but imperfect or er- h roneous charge and that they do not apply when the charge is entirely void. On this issue, Mr Abubakar submitted that there is nothing vague about the charges as they informed the accused person i about the type of offences they have been alleged to have committed, the time they were alleged to have committed the offence, the place where they were alleged to have committed the offence, and the law they are alleged to have j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Patrick U. Eze and Others 481 a contravened. He argued that in fact the charge was so clear to them that they pleaded not guilty without equivocation, and that even in the brief of argument, there was nowhere it b was stated that the accused persons did not understand the charges alleged against them. Mr Abubakar was of the view that all the arguments in the brief were theoretical arguments, since there was nowhere it was said that the accused persons misunderstood the charges against them, further- c more, that five witnesses had already testified for the prosecution and had been rigorously cross-examined by the learned Counsel for the third and fifth accused persons. He then wondered what defence he was pursuing with the rigor- d ous cross-examination, if he failed to understand what the charge was from the beginning. Mr Abubakar then posed the question, even if the charges are vague, which he did not concede to, would that make e them void and referred the Tribunal to the case of Obak- polor v. The State (1991) 1 N.W.L.R. (Part 165) 113 in support of his submission that the answer is in the negative. He therefore urged the Tribunal to dismiss the entire motion as f being totally misconceived. On his own part, Prof. Nwabueze replied that the question before the Tribunal is, what does the charge mean and what law are the accused persons alleged to have contravened?. g He submitted that the arguments in the brief is that the statement of the law under which the accused persons are charged is meaningless because the words “read together” has no precise meaning, furthermore, that it can mean at least three things and the Tribunal is not competent to con- h vict with those statements of law. He referred the Tribunal to paragraph 16 of the brief of argument in answer to the case cited by Mr Abubakar, Obak- polor v. The State (supra) and submitted that the arguments i here is not that the charge or charges are just imperfect or erroneous, but that the argument is that they are entirely void because they mean nothing and where a charge is entirely void, there is nothing before the Tribunal and there can j therefore be no question of submission. He further argued [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 482 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. that the Tribunal can not be given jurisdiction which it does a not have merely by the accused person submitting to its jurisdiction and that it is a completely different question from where the charge is merely defective. b Now, what is the issue for determination here? To answer that question, it is necessary to consider the basic rules on arraignment and charges. An accused person is arraigned in court upon a charge sheet. A charge sheet is the document c before the court which informs the court and the accused of the allegations levelled against the accused by the prosecution. In other words, the charge sheet contains the charge or charges against the accused person. The particulars required d to be contained in a charge sheet are as follows:– (a) Name of the accused or accused persons; (b) Date of the alleged commission of the offence; (c) Place of the commission of the offence; e (d) Statement of the offence committed; (e) Name of the person and of the thing against whom or in respect of which the offence was committed; (f) The enactment and the section of the enactment alleg- f edly contravened; (g) Signature of the person drafting the charge. By virtue of section 167 of the Criminal Procedure Act, any objection to a charge for any formal defect on the face of it g must be taken immediately after the charge has been read over to the accused and not later. In Obakpolor v. The State (supra) cited by Mr Abubakar, the Supreme Court held as per Akpata, JSC that an objection to a defective charge h should be taken immediately after it has been read over to the accused because he would be saying in effect that there is no valid information to which he could plead, and that pleading to it is a submission to trial on a defective charge, if i the defect does not deprive the court of jurisdiction. The five accused persons in this case were arraigned before this Tribunal on a 78 count charge and all the accused persons, including the third and fifth accused persons, j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Patrick U. Eze and Others 483 a pleaded not guilty to the respective counts against them, i.e. Counts 9, 12 and 18 in respect of the third and fifth accused persons. Trial commenced and five witnesses testified for b the prosecution and were cross-examined by the learned Counsel for the third and fifth accused persons as pointed out by the learned Counsel for the prosecution. The third and fifth accused are not claiming that they were not informed about the allegations levelled against them by the prosecu- c tion. There is no dispute as to information about the type of offences they are alleged to have committed, the time they were alleged to have committed the offence, the place which they were alleged to have committed the offence. But it d would appear from the arguments of their Counsel, that the bone of contention is the law they are alleged to have contravened. Prof. Nwabueze’s objection is that the statement of the law e under which the accused persons are charged is meaningless because of the expression “read together with section 3(1)(d) of the Decree”. His argument is that the expression can be interpreted to mean at least three things, (1) as modified by f section 3(1)(d) by addition, enlargement, subtraction, restriction or otherwise; (2) as incorporated by section 3(1)(d) by reference into the Decree; and (3) as being meaningless. His contention is that it is meaningless because section 3(1) does g no more than set out the jurisdiction of the Tribunal and the jurisdiction of the Tribunal cannot form part of the offences charged against the accused persons. His submission therefore is that the charges are so vague that “men of common intelligence must necessarily guess at its meaning” and since h the terms are not just vague but meaningless, the charges are accordingly void. To my mind, the issue for determination therefore is, whether the use of the expression “read together with section i 3(1)(d) of the Decree” in Counts 9, 12 and 18 renders the charges against the third and fifth accused persons void on the ground that the terms are not just vague but meaningless. I find I can not and will not agree with Prof. Nwabueze’s j submission on this issue. I have earlier on ruled that the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 484 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Tribunal has jurisdiction to try the third and fifth accused a persons because the offences allegedly charged against them under the Criminal Code, relate to the business or operation of a bank. The third accused is being charged with conspir- b acy, an offence under the Criminal Code. The fifth accused is being charged with forgery, an offence under the Criminal Code. The enactment and the section of the enactment allegedly contravened are clearly set out in Counts 9, 12 and 18 as follows:– c 9. “——— and thereby committed an offence punishable under section 516 of the Criminal code — read together with section 3(1)(d) of the — Decree No. 18 of 1994.” d 12. “—— and thereby committed an offence punishable under section 516 of the Criminal code — read together with section 3(1)(d) of the — Decree No. 18 of 1994.” 18. “— and you committed an offence punishable under section 467 of the Criminal Code — read together with section e 3(1)(d) of . . . the Decree No. 18 of 1994.” It might be correct to say that the use of the expression “read together with section 3(1)(d) of the Decree” is superfluous in f the charge, but that does not render the charge vague or meaningless nor detract from the fact that the third and fifth accused persons were duly informed in the charge about the enactment and the section of the enactment they allegedly contravened as required by law. Even if different meanings g can be ascribed to the charge by the use of the said expression, it is a well known principle that courts generally always guard their jurisdiction jealously and would not allow their jurisdiction to be taken away except by statutes ex- h pressed in clear and positive terms. Where the provisions of the statute designed to oust the court’s jurisdiction is called for interpretation, such provisions are always construed strictly and when they are capable of bearing more that one i meaning, the meaning which preserves the court’s jurisdiction is always preferred and adopted. See Okoroafor v. Misc. Offences Tribunal (1995) 4 N.W.L.R. (Part 387) 59; Madike v. I.G.P. (1992) 3 N.W.L.R. (Part 227) 70. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Patrick U. Eze and Others 485 a In this case, the third and fifth accused having been informed by the prosecution about the law they are alleged to have contravened, which is the Criminal Code, I hold that b the use of the expression “read together with section 3(1)(d) of the Decree” in Counts 9, 12 and 18 merely notifies them that they are being charged before the Tribunal pursuant to the provisions of section 3(1)(d) of the Decree which empowers the Tribunal to try offences relating to the business c or operation of a bank under any enactment. The objection of learned Counsel for the third and fifth accused persons on this ground is also overruled. d In addition to these two grounds of objections mentioned in the motion paper, Prof. Nwabueze filed additional paragraphs 17–22 to the brief of arguments raising the issue of the jurisdiction of the Tribunal not being retroactive. The main gist of his objection on this ground, is that since the e acts charged against the third and fifth accused persons took place before 9th November, 1994, the commencement date of the Decree, the Tribunal has no jurisdiction/competence to try them. f Learned Counsel for the prosecution, argued in reply, that this is equally a misplaced argument, since it has not been contended that the acts charged were not offences under the various enactments as at the time the offences were commit- g ted. He equally submitted that bringing the charges before the Tribunal is only in accordance with the legal principle that while the procedure is governed by the law at the time of trial, the charge and conviction relate to the law at the h time of the commission of the offence. To support this submission, he referred the Tribunal to the Supreme Court decision in Mohammed Sele v. The State (1993) S.C.N.J. 15. Mr Abubakar argued that what the Decree did in section i 3(1)(d) of the Decree was to remove those classes of offences from the purview of the ordinary courts and make them triable exclusively by the Tribunal. He submitted that to go to the ordinary court now for a charge against the ac- j cused persons is to go to a forum whose jurisdiction has [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 486 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. already been removed by that subsection. Prof. Nwabueze a had in paragraph 21 of the additional brief of argument submitted as follows:– “If the phrase ‘offences specified in BOFID 1991’ in section b 3(1)(c) is interpreted not only to include offences specified in the enactment replaced by BOFID 1991, i.e the Banking Decree, 1969, and offences specified in the enactment replaced by the Banking Decree, 1969, i.e. Banking Act, 1958, —— but also to acts committed already in contravention of the 1969 and 1958 stat- c utes, then the Failed Bank Tribunal would have been enabled to try criminal acts committed 26 years ago in contravention of the Banking Decree, 1969 or committed 37 years ago in contravention of the Banking Act, 1958. It would also have been enabled to try d criminal acts committed 80 years in contravention of some relevant provision of the Criminal Code, which was enacted in 1916. Such a startling result could not have been within the contemplation of the Failed Banks Decree 1994, and is certainly not covered by any clear, unequivocal provision in the Decree.” e In reply to this, Mr Abubakar submitted that as long as it is an offence relating to the business or operation of the bank and it remains in our statutes books, it does not matter if it is 80 or 800 years later, the Tribunal is empowered to try such f an offence. He further argued, that section 3(1)(d) of the De- cree speaks of “any enactment” and since it is all encom- passing as it covers all enactment without any exception, then even it is from the time of Adam, as long as it is in our g statute books, the Tribunal is empowered to try it without exception. Once again, I find I have to agree with Mr Abubakar, learned Counsel for the prosecution that this ground of ob- h jection equally lacks merit and should be disregarded. As I have earlier stated, the third and fifth accused are being charged with the offences of conspiracy and forgery respectively. These are offences under the Criminal Code and not i under the Decree. The Decree promulgated in November, 1994, established this Tribunal to recover debts owed to failed or distressed banks and to try any person accused of financial malpractice in banks generally. Now, section 3(1)(d) of the Decree in particular gave the Tribunal the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Patrick U. Eze and Others 487 a power to try any offence relating to the business or operation of the bank under any enactment. In effect, what the Decree did was to oust the jurisdiction of the ordinary courts from b trying such cases or class of cases. This is clear from the provisions of section 2(1)(b) and (3) of the Decree and it reads as follows:– 2(1) “Any part-heard proceeding relating to a matter for which the Tribunal has jurisdiction, which is pending before any c court on the date of the making of this Decree:– (b) shall, in a criminal case, be continued and completed as if this Decree has not been made (3) A person who has been tried and convicted for an offence d charged under any other enactment shall not be tried a second time for the same offence, notwithstanding that he could be proceeded against in accordance with the provisions of this Decree.” (Italics mine.) e So, the issue of retroactive jurisdiction does not arise at all. No matter how long ago the offence was allegedly committed, once it is an offence relating to the business or operation of the bank under any enactment, the Tribunal can try it. f This ground of objection is overruled. The preliminary objection challenging the jurisdiction/competence of the Tri- bunal to try the third and fifth accused persons be and is hereby overruled. [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

488 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Central Bank of Nigeria v. Great Merchant Bank Limited b FEDERAL HIGH COURT, LAGOS DIVISION BELGORE CJ Date of Judgment: 28 OCTOBER 1996 Suit No.: FHC/L/CS/131/95

Banking – Central Bank of Nigeria – Purporting to acquire c or purchase a bank for nominal fees – Steps Central Bank to take – Sections 32–38 Banks and Other Financial Institu- tions Decree No. 25 of 1991 Central Bank – Purporting to acquire or purchase a bank d for nominal fees – Steps to take – Sections 32–38 Banks and Other Financial Institutions Decree No. 25 of 1991

Facts e The applicant by Originating Summons applied for an order of Court to enable it or any person nominated by it to purchase and or acquire the respondent for a nominal fee of N1 for the purpose of restructuring and subsequent sale of it. f The ground for the application was that the respondent had insufficient assets to cover its liabilities and that the paid up share capital of it was lost and unrepresented by available assets and that a restructuring of it would result in lesser g hardship to the owners of it and the depositors than an outright liquidation.

Held – h 1. Before the Central Bank can acquire a bank for a nominal fee, the Central Bank must show that:– (a) the bank being bought has insufficient assets to cover its liabilities and that its share capital is lost and un- i represented by available assets. (b) the Governor of the Central Bank in compliance with section 32 of Banks and Other Financial Institutions Decree No. 25 of 1991 has conducted a special j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION)

Central Bank of Nigeria v. Great Merchant Bank Ltd 489 a examination or investigation of the books and affairs of that bank. (c) the Governor of the Central Bank has as empowered b by section 33 of Banks and Other Financial Institu- tions Decree removed for reasons to be recorded in writing, the Manager or Officer of the bank with the approval of the President. c In the instant case since the evidence shows a compliance with (a)–(c) above, the application ought to be granted. 2. Per curiam d “The duty of the Court in this case, as in other cases, is not only to see to the legality of the case leading to requirement to the purchase or for acquiring the respondent but to examine also the whole fairness of the process. Apart from the generic demand of justice for such a step, there is a consti- e tutional requirement of it. The Constitution requires a fair hearing and adequate compensation each of which demands the full hearing of the two sides of the case and obligation to weigh the evidence and consider legal submission before arriving at a decision. The evidence from affidavit is that f the respondent is insolvent even with all efforts of the respondent after its attention was called to its short coming and despite the efforts of the Caretaker Committee that replaced its Board. The legal process to be taken by the applicant has been shown and accepted to have been taken.” g Application granted.

Nigerian statute referred to in the judgment h Banks and Other Financial Institutions Decree No. 25 of 1991, sections 32, 33

Judgment i BELGORE CJ: The Originating Summons in this case is for an order for the applicant, that is, the Central Bank of Nige- ria or any person nominated by it to purchase and or acquire the respondent, that is, Great Merchant Bank Limited for j a nominal fee of N1 for the purpose of restructuring and [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ 490 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. subsequent sale of it. The ground for the application was that a the Great Merchant Bank Limited, the respondent had insufficient assets to cover its liabilities and that the paid up share capital of it was lost and unrepresented by available assets b and that a restructuring of it would result in lesser hardship to the owners of it and the depositors than an outright liquidation. In support of this claim, the applicant filed an affidavit, c another further affidavit and finally a further affidavit again. Three of the affidavits were sworn to by the Senior Officers of the applicant Bank. Both of them were Deputy Directors in Banking Supervision Department while the fourth one d was sworn to by a Litigation clerk of the chambers of the applicant’s Counsel. The respondent did not apply to cross- examine any of them on their affidavits. The respondents too supported their case by a counter-affidavit, a reply to further and better affidavit both sworn to by the second respondent. e The applicant too did not apply to cross-examine him on his two counter-affidavits. There was no oral evidence and there was only one documentary evidence apart from document annexed to various affidavits and counter-affidavits. f From the four affidavits and further and better affidavits produced by the applicant, the following facts were presented. The respondent was a company registered in Nigeria and was licensed to carry on the business of banking and g that the respondent’s banking affairs had been in a poor state for a long time the fact which necessitated the applicant to undertake some supervisory measures. Between December, 1993 to October, 1994 the liquidity of the respondent had h been below the statutory requirements of 30% and since June, 1994 it had consistently been below 10%. Despite remedial measures taken by the applicant the respondent’s overdrawn current account as at 30th November, 1994 from i the applicant was N4,981,953 and N11,460,708 from Char- tered Bank and that the respondent failed to honour its banking obligations to local Banks, individual and institutional investors, some of whom had protested to the applicant. The applicant as a result conducted an examination into the state j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ Central Bank of Nigeria v. Great Merchant Bank Ltd 491 a of affairs of the respondent on 30th November, 1994 and the report of the examination was exhibit GMB That this Spe- cial Report exhibit 0M1 as well as statutory returns both b confirmed that the respondent was insolvent and that its capital bad been completely eroded by accumulated losses and non performing credits. The position of the respondent by 30th November, 1994 was that out of N354,364,869 total credit portfolio of it, N352,328,104 that is 99% were classi- c fied as defective were totally lost and N16,877,311 were classified doubtful, while only N20,367 that is 1% of the total credits were performing as shown at page VIIA of exhibit GMB1. Out of the N352,328,184 defective loans, d N328,563,700 were classified as lost, while N16,877,311 were doubtful and N6,887,73 were sub-standard as shown on page VIIA of exhibit GMB1. Other known losses of the respondent within and outside Nigeria amount to e N70,999,329 as shown in Schedule V of exhibit GMB1. The fixed assets of the respondent as at 30th November, 1994 stood at N16,472,029 and other assets were N94,982,216 while the respondent’s liabilities stood at the f same time N188,190,292 and liabilities per contract were N110,994,064. Despite the Order of the applicant to the respondent in 1993 that the latter should inject a further N42M to its paid g up capital the respondent’s paid up capital still remains N40M by 30th November, 1994 as it was originally by 30th November, 1994. Further the applicant imposed holding actions on the respondent in March, 1994 and requested its shareholders to inject N46.0M within three months. This re- h quest was not carried out by June, 1995. The minimum amount required by the respondent was N319.0M which by November, 1995 had risen to N514M. The respondent was technically insolvent and required additional capital of about i N290.9M to meet even the minimum risk weighted asset ratio of 8%. The Governor of the applicant wrote on 24th July, 1995 to the Head of State as he was obliged to do by Law recom- j mending the restructuring of the respondent and requiring [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ 492 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the permission of the Head of State to approve proposal con- a tained in the letter which included a request to acquire the respondent at a nominal fee for the purpose of restructuring and subsequent resale of the respondent. The Head of State b gave his assent to the two requests on 10th August, 1995. The approval was contained in exhibit GMB2. After the receipt of the Head of State’s approval exhibit GMB the applicant appointed Nigeria Deposit Insurance Corporation as its agent to manage the affairs of the respondent. c That after the Interim Management Committee appointed in August, 1995 made all efforts to improve the finances of the respondent; by 18th January, 1995 the respondent’s overdrawn position on its account with the applicant was d still N31.54M. Also as of that date the respondent still had serious problem meeting matured deposits and inter-bank placements while interests continued to accumulate on all the outstanding sums as evidenced in exhibit. OK a letter e dated October 9th, 1995 of complaint of one of the respondent creditors, Royal Mortgage Finance Limited. That is a fact gathered from applicant’s affidavits. The first respondents who are the agents of the applicant f managing the respondent as interim management did not give any evidence oral or by affidavit; in fact their Counsel submitted that he had no objection to the application. The shareholders, who were, on their own application g joined as a second respondent filed counter-affidavit and a reply to further affidavit, but neither in the two documents did they deny categorical substantial parts of facts deposed to in the four affidavits of the applicant. The counter- h affidavit of the second respondent representative, who was also one of the Directors of first respondent up till 15th Sep- tember, 1995 when the applicant’s agent took over the management of the first respondent did not deny the position of the first respondent as at 30th November, 1994 as deposed to i by the applicant’s deponents. Rather he stated in paragraph 17 of his counter-affidavit that:– “While the said exhibit. GMB1 may contestably represent the 1993/94 financial condition of the respondent Company the steady j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ Central Bank of Nigeria v. Great Merchant Bank Ltd 493 a improvement in the fortunes of the Company has since rendered significant parts of the said report obsolete.” He went further to depose in paragraph 22 of his counter- b affidavit that:– “Indeed within six weeks of September 1st, 1995, the respondents, have either through our dissolved board or through the Manage- ment Committee succeeding us, retrieved over N53Million and by c the end of 1995 recovered apart from the aforesaid substantial debts over N100 Million of the hitherto classified “Lost” exposure. The document shown to me marked exhibit ‘F09’ is a copy of the recoveries list for Sept/Oct., 1995 aforesaid.” Paragraphs 5 and 9 of the counter-affidavit of the second re- d spondent are very relevant and they read:– “5. The vicissitudes encountered by the respondents in recent years and the misunderstanding between the applicants and the respondents which has led the applicants to be contem- e plating unjustifiably auctioning the respondents for one naira originated from the suspected wrongdoings of one Dr Moses Odaro and Mr Martins Edigin, the Former Managing Director/Chief Executive and Deputy General Manager of the respondents at all time material to this Suit. f 6. Sometime in March, 1994, the respondents’ Board of Direc- tors (part of which I was) suspended the two senior execu- tives as soon as we suspected the said wrongdoings. 7. . . . g 8. . . . 9. Following the applicants’ directive, the respondents also sometime in November, 1994 informed the applicants that the respondents have duly removed the said Dr M. O. Odaro h from the Board of Directors of the respondent Company, and the document shown to me marked exhibit. ‘F06’ is a copy of the said respondents’ letter.” So also very relevant are paragraphs 15 and 17 of the same i counter-affidavit. They read as follow:– “15. Sometime in April/May, 1995, the respondent Company’s acting Managing Director, Mr Vince brought to the attention of the Board of the respondents the letter written by the Deputy Governor of the applicants, forwarding a copy of j “Report of Routine Examination on Great Merchant Bank [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ 494 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Ltd” which Report is the same GMB1 attached to the appli- a cant’s affidavit. The document shown to me marked exhibit. ‘F08’ is the covering letter aforesaid. 16. . . . b 17. While the said exhibit. GMB1 may contestably represent the 1993/94 financial condition of the respondent Company, the steady improvement in the fortunes of the Company has since rendered significant parts of the said report obsolete.” c These are the two sides of the story of the respondent Bank. The respondent did not actually deny that it was not in financial trouble, it did not deny the mismanagement of its top executive. What the counter-affidavit meant as “steady improvement in the fortunes of the respondent”, to me is no d more than a euphemism for the present financial position of the respondent. The respondent in spite of any recovery of debt being made, is still being weighed down by a past debt and mismanagement with no clear evidence as to how to e solve the problem but at the same time urging the court to accept an imaginary financial buoyancy in future under a suitable management which it has not produced concrete evidence as to how such can be achieved. f On the evidence produced by both sides, I believe the evidence of the applicant that at the time the Writ in this case was issued and up to the conclusion of the trial the financial position of the respondent is as stated in paragraphs 4(c) to g 4(3) of affidavit of Olatosin Kajugbole sworn to on 19th March, 1996 and that by virtue of such position the respondent has insufficient assets to cover its liabilities and that its share capital is lost and unrepresented by available assets. h What is the position of the Law having established the state of the financial position of the respondent, has the applicant complied with necessary statutory provisions in carrying out its statutory obligation before bringing this appli- i cation to the Court? To know whether the applicant had carried out its duty under the relevant Law, that is, Banks and Other Financial Institutions Decree No. 25 of 1991 in respect of this case, it is necessary to go through the steps j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ Central Bank of Nigeria v. Great Merchant Bank Ltd 495 a mandatory for it to take before the matter comes to court as it has come now. In doing so we have to go through the provisions of sections 32 to 38 of Decree No. 25 aforemen- b tioned. Section 32 empowers the Governor of the applicants’ Bank to order a Special examination or investigation of the books and affairs of the respondent. I am of the view that the words c “examination”, “investigation”, “books” and “affairs” used in the section were deliberately used and each has definite and different meaning. Examination may mean to look carefully in order to learn about what is being looked into or to test the knowledge or ability of what is being looked into, it d can be carried out suo motu without any intent of wrong doing simply to confirm how well the object being examined is performing whether with full knowledge or experience as expected of it or whether it is acting within laid down regu- e lations. While usually to investigate is also to examine or inquire or make a careful study of, with a connotation that something is going wrong and it has to be looked into and usually, it is carried out as a result of a complaint or allega- f tion. While special examination can be routine regular or special, investigation cannot be regular. Did the applicant carry out a special examination or investigation of the respondent? Paragraphs 9 and 10 of the sup- g port affidavit sworn to on 14th November, 1995 stated that the applicant conducted an examination into the affairs of the respondent as at 30th November, 1994 which report was tendered as exhibit GMB1. The examination must be ac- h cepted as a result of the affairs of the respondent as related to the preceding paragraphs 5, 6,7 and 8 of the same affidavit. The paragraphs stated that the respondent’s affairs has been in a poor state for a long time which had made the applicant to take “some supervisory measures” because the li- i quidity ratio of the respondent had been below the statutory requirement of 30% as it was only 10%. Thus the examination conducted on 30th November, 1994 should not be otherwise than a special examination or an investigation as the j applicant was already in the knowledge of the state of affairs [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ 496 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. of the respondent. The examination must have been con- a ducted to see what further remedial measures should be taken. This fact was borne out by the next paragraph of the affidavit, paragraph 10 which stated that the Special Exami- b nation Report as well as statutory returns have confirmed that the respondent was insolvent and its capital base had been completely eroded by accumulated losses. The contention of the respondent that exhibit GMB1 was not a special report because the letter exhibit F08 annexed to counter- c affidavit forwarding the report termed it as routine examination report and that the report also was headed routine examination as at 30th November, 1994. But as stated earlier special report can be a routine examination and in this case d that was the case in my opinion since the bank had been under vigilance of the applicant as a result of which examination of 30th November, 1995 was ordered. I do not regard the nomenclature is of any particular significance in this e case. The idea of it is clear, the respondent is not prejudiced by it and it is, if not within the letter of the law, it is certainly within the intent of it. I accept that the applicant had complied with section 32 of the Banking and Other Financial In- f stitution Decree. Section 33 empowers the Governor of the applicant with the approval of the President, to remove for reasons to be recorded in writing, manager or officer of the bank. Para- g graph 23 of the counter-affidavit stated that the Board of the respondent was removed as from 15th September, 1995 and from exhibit A the President approved on 10th August, 1995, the proposal of the applicant to the measure laid down in the law, to the necessary step to be taken under section 33 h had been legally taken. The respondent’s learned Counsel attacked the mode of seeking approval of the President as contained in exhibit A. i One may not consider lumping together of many banks for seeking approval from President as ideal but considering that they all have identical reasons which necessitate the seeking of the approval, one cannot say that the method is wrong. The method is certainly not illegal, section 14(b) of j [1994 – 1996] 6 N.B.L.R. (PART II) (FEDERAL HIGH COURT, LAGOS DIVISION) Belgore CJ Central Bank of Nigeria v. Great Merchant Bank Ltd 497 a the Interpretation Act (Cap 192) makes singular and plural interchangeable it says:– “words in the singular include the plural and words in the plural b include the singular.” I am of the view considering the steps taken by the applicant before this application was made as disclosed by evidence, that all the required statutory steps had been taken by the c applicant. The duty of the Court in this case, as in other cases, is not only to see to the legality of the case leading to requirement to the purchase or for acquiring the respondent but to exam- d ine also the whole fairness of the process. Apart from the generic demand of justice for such a step, there is a constitutional requirement of it. The Constitution requires a fair hearing and adequate compensation each of which demands e the full hearing of the two sides of the case and obligation to weigh the evidence and consider the legal submission before arriving at a decision. The evidence from affidavit is that the respondent is insolvent even with all efforts of the respon- f dent after its attention was called to its short coming and despite the efforts of the Caretaker Committee that replaced its Board. The legal process to be taken by the applicant has been shown and accepted to have been taken. Consideration has been taken into account of the best method that would g benefit the respondent and its Shareholders. The fairness of the purchase at the nominal value of an enterprise that is worthless is taken into account. Taking all these into consideration, I do order the applicant to purchase the respondent h at a value of one naira for the purpose of restructuring and subsequently selling it. I do order also that the respondent should be given the first choice of repurchasing it after the restructure at the value given by the applicant. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS)

498 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Nigeria Deposit Insurance Corporation v. Afro Continental Nigeria Limited and Others (No. 2) b SPECIAL APPEAL TRIBUNAL, LAGOS AGBAJE, ODUNLAMI JJ

Date of Judgment: 29 OCTOBER 1996 Suit No.: SAT/FBT/281/96 c Failed Banks Tribunal – No provision for enlargement of time to appeal under the section 5(1) Failed Banks (Recov- ery of Debts) and Financial Malpractices Decree No. 18 of 1994 (as amended) d Facts The appellant in the instant case, sought for an extension of time to lodge an appeal from the Special Appeal Tribunal e against an order of the Lower Tribunal. Going by the provisions of section 5(1) of the Failed Banks Decree, appeal must be filed with 21 days, the appellant however based their application on the provisions of f paragraph 22(1) Schedule 1, Failed Banks Decree No. 18 of 1994 (as amended).

The two provisions provides as follows:– g “22(1) The Tribunal shall have power to enlarge or abridge the time, appointed by this Decree or the Rules of Court mentioned in paragraph 27 the schedule or fixed by any order enlarging time for doing any act or taking any proceeding upon such terms (if any) as the justice of the case h may require.” Section 5(1) of the Decree No. 18 of 1994 (as amended) reads :– i “A person convicted or against whom a judgment is given under this Decree may, within 21 days of 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.” j [1994 – 1996] 6 N.B.L.R.(PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS)

Nigeria Deposit Insurance Corp v. Afro Continental Nigeria Ltd 499 a Held – 1. The Special Appeal Tribunal has no jurisdiction to extend time within which to Appeal to it from the Failed b Banks Tribunal. This is because there is no provision in the Decree creating the Special Appeal Tribunal which gives it power to extend or enlarge the time within which to Appeal to it from the Lower Tribunal. c 2. In the instant case, since the Special Appeal Tribunal has no power to extend the time to appeal to it from the Lower Tribunal the Application of the applicant is incompetent. d 3. The definition of Tribunal in paragraph 22(1) of Sched- ule 1 to the Failed Banks Decree refers to the Lower Tribunal trying the case and not the Special Appeal Tri- bunal. e Application struck out.

Nigerian statute in the judgment Failed Banks (Recovery of Debts) and Financial Malprac- f tices in Banks Decree No. 18 of 1994 (as amended), section 5(1), Schedules 1, 22(1)

Counsel g For the appellant: Mr C.O. Ofodile, SAN For the respondents: Mr Allotey

Judgment h AGBAJE J: This is a Motion on Notice filed by the applicant/appellant’s Counsel, Mr C.O. Ofodile, SAN asking for:– i 1. An Order extending time within which to apply for leave to appeal. 2. An Order granting leave to appeal. 3. An Order enlarging the time within which the applicant/ j appellant is to file its notice and grounds of appeal. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS) Agbaje J 500 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

4. An Order deeming the notice and grounds of appeal a filed with this application as properly filed and served on the respondents. 5. An Order granting leave to applicant/appellant to b compile the Record of Appeal. 6. Serve same on respondents; and 7. an Order for accelerated hearing of the Appeal. c Mr C.O. Ofodile, SAN for appellant/applicant informed this Tribunal that the judgment in the Lower Tribunal was delivered on 12th July, 1996. The right to appeal in the case is laid down in section 5(1) of the Failed Banks (Recovery of d Debts) and Financial Malpractices in the Banks Decree No. 18 of 1994. This section 5(1) states:– “a person convicted or against whom a judgment is given under this Decree may, within 21 days of conviction or judgment, appeal e 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.” The Learned Counsel for the applicant/appellant informed us f that the 21 days allowed for appeal ran out on 2nd August, 1996 and that this application was brought on 5th August, 1996 i.e. some 4 days after the expiration of the time prescribed for appeal. He relied heavily on paragraph 22(1) of g Decree No. 18 of 1994 for bringing the application which states:– “22(1) The Tribunal shall have power to enlarge or abridge the times, appointed by this Decree or the Rules of Court h mentioned in paragraph 27 of this schedule or fixed by any order enlarging time for doing any act or taking any proceeding upon such terms (if any) as the justice of the case may require.” He also referred us to Paragraph 22(5) and (6) of the Sched- i ule to the Decree, dealing with mode of application for abridgment and enlargement of time. Learned Counsel also referred us to section 16(2) of Cap 389 Laws of Federation of Nigeria, 1990 which empowers an appeal Tribunal to j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS) Agbaje J Nigeria Deposit Insurance Corp v. Afro Continental Nigeria Ltd 501 a regulate its own proceedings and urged on us to allow his application. It is the view of this Tribunal that it (“The Special Appeal b Tribunal”) is a creation of a Decree and 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 c appeal to it from the Lower Tribunal. The reference to Tri- bunal in paragraph 22(1) of the Schedule to the Decree No. 18 of 1994 refers to the Failed Bank Tribunal and Mr Ofo- dile agrees that the definition of Tribunal in paragraph 22(1) d refers to the Lower Tribunal trying the case and not to this Special Appeal Tribunal. It is the opinion of this Tribunal which it has held in many other cases that it has no power to extend the time within which to appeal to it from the Lower e Tribunal. It is our view that such power must be authorised by the Decree creating it. We are in agreement with the Learned Counsel, Mr Al- lotey for the respondents that this Appeal Tribunal has no f jurisdiction to extend the time within which to appeal to it from the Lower Tribunal and therefore this motion is incompetent and it is struck out. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

502 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Folbod Investments Limited v. Nigeria Deposit Insurance Corporation b SPECIAL APPEAL TRIBUNAL, LAGOS ZONE AGBAJE, ODUNLAMI JJ Date of Judgment: 29 OCTOBER 1996 Suit No.: SAT/FBT/280/96

Failed Banks Tribunal – Right of appeal under the Failed c Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended)

Facts d In the Failed Banks Tribunal, Lagos Zone II, Holden at La- gos, presided over by M.A. Ope-Agbe, J (hereinafter referred to as the “Lower Tribunal”), the respondent, Nigeria Deposit Insurance Corporation, Liquidator of Alpha Mer- e chant Bank Plc, in exercise of the powers conferred on it by Law, commenced proceedings on 1st July, 1996 against the appellants to recover debt owed by them to the Bank-in- liquidation assessed at N135,960,638.46 as at 31st May, f 1996. An order of Interim Injunction dated 1st July, 1996 was obtained ex parte by the respondent at the Lower Tribu- nal, pending the hearing and determination of the motion on Notice for the interlocutory injunction. The Interim Order prevented the appellants from further collecting rent on a g property at Ikoyi and from withdrawing the sum of N7.0 Million Naira in an account with Union Bank of Nigeria Plc at its Head Office at Marina, Lagos. h On 5th July, 1996, the appellants filed an application in the Lower Tribunal to set aside the ex parte Order obtained by the respondent, contending that the Lower Tribunal had no jurisdiction to entertain the respondent’s action against the appellants. On 26th July, 1996, the Lower Tribunal, ruling i on the appellants’ application to set aside the ex parte Order, discharged the order obtained by the respondent but affirmed that it had jurisdiction to hear the application by the respondent for recovery of the debt owed by the appellants. j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

Folbod Investments Ltd v. Nigeria Deposit Insurance Corporation 503 a The appellants, on 30th July, 1996 filed a Notice of Appeal against the said ruling of the Lower Tribunal and on the same day filed a motion for stay of proceedings in the Lower b Tribunal, pending the hearing and determination of the said appeal filed by them which was the subject matter of this ruling. The respondent, on 19th August, 1996, filed a notice of c preliminary objection to the appeal filed as being incompetent, on the grounds that the appellants had no right of appeal as the Failed Banks (recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 as amended, d hereinafter referred to as the Decree, did not confer a right of appeal against interlocutory decision of the Lower Tribu- nal. Sections 4(1) and 5(1) of the Failed Banks Decree No. 18 e of 1994 (as amended) read:– Section 4(1):– “The Tribunal shall deliver its judgment not later than 21 working f days from the day of its first sitting.” Section 5(1):– “A person convicted or against whom a judgment is given under g this Decree may, within 21 days of conviction or judgment appeal to the Special Appeal Tribunal established under the Recovery of Public Property (Special Appeal Tribunal) Decree, 1984, as amended in accordance with the provisions of that Decree.” h 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 i given a narrow interpretation to mean final judgment alone. 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 deci- j sion. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

504 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

2. An appellant wishing to appeal against the interlocutory a decision of the Lower Tribunal can attach such decision in the appeal against the final judgment of the Lower Tribunal. b 3. In the instant case, since the appeal filed herein is against the interlocutory decision of the Lower Tribunal, the appeal is incompetent. 4. By the noscitur a sociis rule of construction, since the c word conviction in section 5(1) of the Decree evidently means the final judgment of the Tribunal and the word conviction in the Decree is coupled with the word judgment in the Decree, it follows that the word “judgment” d in section 5(1) of the Decree must because of the noscitur a sociis rule be restricted in meaning to a sense analogous to the less general sense of the word judgment which the word conviction which precedes it connotes. e Appeal struck out.

Nigerian statute referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malprac- f tices in Banks Decree No. 18 of 1994 (as amended), sections 4(1), 5(1)

Counsel g For the appellants: Prof. A.B. Kasunmu (SAN) For the respondent: Mr Sangosanya

Judgment h AGBAJE J: In the Failed Banks Tribunal, Lagos Zone II, holden at Lagos, presided over by M.A.Ope-Ageb, J (hereinafter referred to as the “Lower Tribunal”), the respondent, Nigeria Deposit Insurance Corporation, Liquidator of Alpha i Merchant Bank Plc, in exercise of the powers conferred on it by law, commenced proceedings on 1st July, 1996 against the appellants to recover debt owed by them to the Bank-in- liquidation assessed at N135,960,638.46 as at 31st May, j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Folbod Investments Ltd v. Nigeria Deposit Insurance Corporation 505 a 1996. An order of Interim Injunction dated 1st July 1996 was obtained ex parte by the respondent at the Lower Tribu- nal, pending the hearing and determination of the motion on b Notice for the Interlocutory injunction. The Interim Order prevented the appellants from further collecting rent on the property at lkoyi and from withdrawing the sum of N7 Mil- lion in an account with Union Bank of Nigeria Plc at its c Head Office at Marina, Lagos. On 5th July, 1996, the appellants filed an application in the Lower Tribunal to set aside the ex parte Order obtained by the respondent, contending in the main that the Lower Tri- d bunal had no jurisdiction to entertain the respondent’s action against the appellants. On 26th July, 1996 the Lower Tribu- nal, ruling on the appellants’ application to set aside the ex parte Order, discharged the order obtained by the respondent e but affirmed that it had jurisdiction to hear the application by the respondent for recovery of the debt owed by the appellants. The appellants on 30th July, 1996 filed a Notice of Appeal f against the said ruling of the Lower Tribunal and on the same day filed a motion for stay of proceedings in the Lower Tribunal, pending the hearing and determination of the said appeal filed by them, which is the subject matter of this rul- g ing. The respondent on 19th August, 1996, filed a notice of preliminary objection to the appeal filed as being incompetent, on the grounds that the appellants have no right of appeal as h 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, does not confer a right of appeal against interlocutory decision of the Lower Tribunal. i In support of the application for stay of proceedings in the Lower Tribunal, the appellants deposed in an affidavit, inter alia, that it will be oppressive and also result in financial hardship if they have to defend the action only for the appel- j late court to rule that the Tribunal lacked jurisdiction to [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 506 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. entertain the suit. It appears to us that if this Special Appeal a Tribunal has no jurisdiction to entertain the appellants’ appeal against the interlocutory decision of the Lower Tribu- nal, the reason for asking for a stay of proceedings will be of b no moment, since the appeal and the application for a stay of proceedings must necessarily abate. So, when the appellants’ application for a stay of proceedings came before us for hearing on 30th September, 1996, we pointed out to Counsel c for the appellants, Professor A.B. Kasunmu, SAN that the first hurdle he had to scale in this application is to satisfy us that we have jurisdiction to entertain the appellants’ appeal. Professor A.B. Kasunmu, SAN promptly addressed him- d self to the issue of the jurisdiction of this Tribunal to entertain the appeal. As he must needs do, he directed us to section 5(1) of the Decree which provides for a right of appeal from the decisions of the Lower Tribunal to this Special Ap- e peal Tribunal. The subsection says “a person convicted or against whom a judgment is given under this Decree may, within 21 days of conviction or judgment appeal to the Spe- cial Appeal Tribunal established under the Recovery of Pub- f lic Property (Special Appeal Tribunal) Decree, 1984, as amended in accordance with the provisions of that Decree.” He submitted and we dare say we agree with him, that the word “judgment” used in the Decree is wide enough to cover any decision of a Court or Tribunal. He urged us to g construe “judgment” in the Decree in this wide sense. For his part, Mr Sangosanya Counsel for the respondent, submitted to us that in construing the word “judgment” in h section 5(1) of the Decree, we must bear in mind the policy and object of the decree, so that the construction adopted by us would be in accordance with that policy and object. He directed us to section 4(1) of the Decree which says “the Tri- bunal shall deliver its judgment not later than 21 working i days from the day of its first sitting”. He submitted and we agree with him, that it is clear from section 4(1) of the De- cree that the intention of the Decree is to provide for speedy trials of cases before the Lower Tribunal. He submits that a j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Folbod Investments Ltd v. Nigeria Deposit Insurance Corporation 507 a situation which permits of a right of appeal against interlocutory decisions of the Lower Tribunal with their atten- dant delay in the trial of cases in that Tribunal will not foster b or promote the object of the decree. He therefore urges us to construe the word “judgment” in its narrow sense which means the final judgment of a Court or Tribunal and does not include its interlocutory decisions. c The first and most elementary rule of construction is that it is to be assumed that the words and phrases of technical legislation are used in their technical meaning if they have acquired one, and, otherwise, in their ordinary meaning. This d argues in favour of Professor Kasunmu’s contention before us. For the word “judgment” in its ordinary and literal meaning means a decision of a Court or Tribunal which will include its interlocutory and final decisions. On the other e hand, it is recognised that statutes should be construed in a manner to carry out the intention of the legislature. This rule has been stated as follows: The words of statute, when there is a doubt about their meaning, are to be understood in the sense in which they best harmonise with the subject of the f enactment and the object which the legislature has in view. It has also been stated that the rule of construction must be confined to cases where the policy and object of the legislature are clear from the statute itself though the words are g ambiguous. The clear intention of the Decree as it can be gathered from section 4(1) thereof, to which we have referred above, h is to provide for speedy trials of cases arising from the provisions of the Decree. Professor Kasunmu, SAN in fact has not argued to the contrary before us. We have said that the word judgment in its ordinary and literal meaning includes both interlocutory and final decisions of a Court or Tribunal. i To our minds therein lies, the doubt or ambiguity in the scope of the meaning of the word “judgment” used in section 5(1) of the Decree. The adoption of the meaning of the word judgment in its widest sense which includes both inter- j locutory and final decisions will make all decisions of the [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J 508 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Lower Tribunal Appealable under section 5(1) of the De- a cree, a situation which will hardly ensure speedy trials of cases in the Lower Tribunal. On the other hand, the con- finement of the meaning of judgment in section 5(1) of the b Decree to final judgment alone will certainly prevent delays in the trial of the cases which will be in accordance with the known and declared object of the Decree. For this reason we agree with Mr Sangosanya that the word judgment in section c 5(1) of the Decree should be construed in its narrow sense – final judgment – to the exclusion of its wide meaning that is final and Interlocutory decisions. There is another reason, in our view, why the word judg- d ment in section 5(1) of the Decree should be construed in its narrow meaning, final judgment. This is because of another rule of construction which says when two or more words which are susceptible of analogous meaning are coupled to- e gether noscitur a sociis, they are understood to be used in their cognate sense. They take, as it were, their colour from each other, that is, the more general is restricted to a sense analogous to the less general. This rule is referred to as the f noscitur a sociis rule. In section 5(1) of the Decree it is stated that the person convicted or against whom a judgment is given under the Decree may appeal within 21 days of the conviction or g judgment. The word “conviction” evidently means the final judgment of a Court or a Tribunal. So the word “conviction” definitely refers to the meaning of judgment in its narrow sense, its less general sense, that is, final judgment and does h not include interlocutory judgment. The word conviction in the Decree is coupled with the word judgment which as we had said, in its widest sense covers both interlocutory and final decisions of a court or Tribunal. It appears to us that the word “judgment” in section 5(1) of the Decree must be- i cause of the noscitur a sociis rule be restricted in its meaning to a sense analogous to the less general sense of the word judgment which the word conviction which precedes it connotes. j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Agbaje J Folbod Investments Ltd v. Nigeria Deposit Insurance Corporation 509 a We are therefore satisfied that section 5(1) of the Decree prescribes right of appeal only against a final decision of the Lower Tribunal and not against its interlocutory decision. b This means that the motion for stay of proceedings must be refused by us as we have no jurisdiction to entertain the appellant’s appeal. The appellant’s appeal is not before us now. In view of what we have just said no useful purpose c will be served by still keeping the appeal on our list. The appellants’ appeal is hereby struck out by us for want of jurisdiction. Our decision does not mean that the interlocutory orders or d decisions of the Lower Tribunal cannot be challenged or questioned on appeal. What we are saying is that such decisions – must, if there is need to do so, be attacked in the appeal against the final judgment of the Tribunal. Happily, Or- e der 3 Rule 22 of the Court of Appeal Rules which is applicable to this Tribunal says:– “No interlocutory judgment or order from which there has been no appeal shall operate so as to bar or prejudice the court from giving such decision upon the appeal as may seem just.” f We shall now hear Counsel on the issue of costs. [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

510 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Dr Stanley Macebuh and Another v. Nigeria Deposit Insurance Corporation and Others b SPECIAL APPEAL TRIBUNAL, LAGOS ODUNLAMI J, BALONWU, SAN, AGBAJE J Date of Judgment: 8 NOVEMBER 1996 Suit No.: SAT/FBT/301/96

Failed Banks Tribunal – Power of Failed Banks Tribunal to c lift veil of incorporation in order to discover the directors behind the corporate veil Failed Banks Tribunal – Subsisting judgment of High Court – Failed Banks Tribunal – Duty of Tribunal to approve sub- d sisting judgment of High Court Word And Phrases – “Debt” in section 29 Failed Banks De- cree No. 18 of 1994 (as amended) – Meaning – Judgment e debt – Whether comes within

Facts The appellant/respondent applied to the lower Tribunal to f recover the sum of N95,979,605.02 (Ninety-five Million, Nine Hundred and Seventy-nine Thousand, Six hundred and Five Naira, Two Kobo) being the total debt owing the Bank by a Company, Marissa Investments Limited. The Tribunal g found out during trial that the respondents/appellants were the Directors of the Company. The Tribunal lifted the veil of incorporation pursuant to section 3(3)(b)(ii) Failed Banks Decree No. 18 of 1994 (as amended). The applicant/respondent also tendered a judgment earlier obtained in h the High Court against the appellants/respondents and same was adopted as judgment of the Tribunal. The appellants/respondents being dissatisfied appealed to i the Special Appeal Tribunal. Held – 1. The Failed Bank Tribunal pursuant to section 3(3)(b)(ii) of Failed Banks Decree No. 18 of 1994 (as amended) j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J Dr Stanley Macebuh v. Nigeria Deposit Insurance Corporation 511 a has the power to lift the corporate veil of a corporate body indebted to a Failed Bank to determined the liability of its members who may be liable jointly or severally b for the debts owed by the corporate body to the Failed Bank, but such power should be exercised where the Tri- bunal is satisfied on the evidence before it that it is necessary to do so in the interest of Justice. c 2. Where there is a subsisting judgment of the High Court yet unpaid before the Tribunal, the Tribunal is duty bound to give the judgment full weight, and adopt it as judgment of the Tribunal, and once the Tribunal give d judgment based on the earlier judgment, the said judgment of the Tribunal supersedes it and that will be the said subsisting judgment on the matter. 3. By virtue of section 29 of the Failed Banks Decree No. e 18 of 1994 (as amended) debt means any loan, advance, credit accommodation, guarantee or any credit facility together with the interest thereon, which remains outstanding and unpaid against a customer of a bank in fa- f vour of the bank. In the instant case the N20,000,000, judgment debt in favour of the Alpha Merchant Bank which remained unpaid comes within the definition of debt in section 29 of g the Failed Banks Decree No. 18 of 1994 (as amended). Appeal dismissed, cross appeal allowed.

Cases referred to in the judgment h Nigerian Ariori v. Elemo (1983) S.C. 13 at pages 48–49 Ezomo v. Oyakhire (1985) 2 S.C. 260 at 274 i Metalloplastica (Nig.) Ltd v. NDIC (1997) 1 FBTLR 171 N.B.N. Ltd v. Guthire (Nig) Ltd (1993) 3 N.W.L.R. (Part 284) 643 Skenconsult (Nig) Ltd v. Ukey (1980) 1 S.C. 6 j Sobogun v. Sanni (1974) 1 All N.L.R. (Part 2) 311at 36 [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE)

512 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Trenco (Nig) Ltd v. African Real Estate and Investment a Company Ltd (1978) 4 S.C. 9

Foreign b Manchester and Milford Railway Co Ex parte Cambrian Rly. Co (1880) 14 Ch.D. P 645

Nigerian statute referred to in the judgment c Failed Banks (Recovery of Debts) and Financial Malprac- tices in Banks Decree No. 18 of 1994 (as amended), sections 3(3)(b)(ii), 29 d Counsel For the appellant/cross-respondent: Bambo Adesanya, Esq. For the respondent/cross-appellant: Nasiru Tijani, Esq. e ODUNLAMI J: This is an appeal against the judgment of the Failed Banks Tribunal, Zone 2, Lagos delivered by Ope- Agbe, J on the 8th November, 1996. The respondent applied to the Tribunal on 19th December, 1995 to recover debt of f N95,979,605.02 from Marissa Investments Limited, first respondent, second respondent – Stanley Macebuh, Dr Yemi Ogunbiyi, third respondent and George Aoud the fourth respondent. The claims were joint and several. The first and second respondents filed a joint reply and were represented g by Chief K.H.C. Nwokolo. The third respondent filed a separate reply and was represented by Mr O. Ayanlaja, SAN. The fourth respondent, George Aoud, was served but he did not appear and did not file any reply to the applica- h tion. He was not represented by Counsel and thus the action against him was undefended. At the trial the respondent tendered some documents amongst which are exhibits T and V. Statements of Account, i judgment of Lagos High Court exhibits G–G7 wherein the Court gave judgment against the four respondents in favour of Alpha Merchant Bank Plc for N20,000,000 jointly and severally. The respondents also tendered exhibit 7 j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J Dr Stanley Macebuh v. Nigeria Deposit Insurance Corporation 513 a Certificate of Occupancy No. 8/8/1987 in respect of the first appellant’s parcel of land at Plot 19, Block A, Lekki Penin- sular Scheme which was pledged as security for the facilities b granted. In exhibits G–G7 the learned Judge of the Lower Tribunal found the first, second and fourth respondents liable jointly and severally in the sum of N20,000,000 with interest and c the first defendant in the Lower Tribunal, first appellant in this appeal Stanley Macebuh, and the fourth defendant in exhibits G–G7 were found liable jointly and severally to the respondents in the sum of N24,625,814.23 with interest d whilst the claim against the third defendant in the Lower Tribunal, Dr Ogunbiyi was dismissed. The second and fourth respondents in the Lower Tribunal were dissatisfied with the judgment and so they lodged this e appeal whilst the applicant also filed a cross appeal against the dismissal of the claim against third respondent – Dr Ogunbiyi. The learned Counsel for the appellant, Mr Adesanya on f page 3 of the amended brief dated 27th June 1997 filed 3 issues for determination. The first is whether the mere fact that the first appellant was the alter ego of the Debtor Company (Marissa) could g without more fix the first appellant with liability jointly and severally with the Debtor Company for the money owed by the Debtor Company. In support of this ground, he contended that more is re- h quired to fix liability on the Directors to lift the Corporate veil and he referred to section 290, CAMA. He contended that by section 290, CAMA, there must be evidence of fraud or improper use of the money before attaching liability to i the Directors. But section 3(3)(b)(ii) states that the Tribunal shall in exercise of its powers under this Decree, lift the corporate veil of a body corporate where necessary for the purpose of revealing its members who may be liable jointly and j severally for the debt owed by the Corporate body to a [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J 514 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Failed Bank. Hence, when the Tribunal was satisfied with a the evidence before it, that in the interest of justice, the Cor- porate veil of the second to fourth defendants in the Lower Tribunal should be lifted he rightly lifted the veil and later b considered that involvement. In arriving at this decision, the totality of the evidence was considered as by section 3(3)(b)(ii) Decree No. 18 of 1994, the Tribunal has the duty of finding out those directors who c are liable either jointly and severally for the debt owed by the Corporate body to a failed bank. In this case 70 exhibits (in respect of the debt) were tendered. The first appellant signed 90% of them either as d Chairman or Executive Chairman and the fourth respondent in the Lower Court signed some of them jointly with him. Apart from this, there is evidence that the first appellant paid the fee for his Certificate of Occupancy in respect of his e piece of land at Lekki Peninsular covered by Certificate of Occupancy No. 8/8/1987 – exhibits 23, 25A and 26 from the Corporate Account. The first appellant issued a personal cheque – exhibit 14, f for N3,000,000 in partial liquidation of the indebtedness to the Bank. He had earlier paid N2,000,000. Again, the first appellant had deposited the title deeds of g his piece of land as security for the various facilities granted (first respondent) Marissa Investment Limited. As of today Marissa has no asset. In Trenco Nigeria Ltd v. African Real Estates and Investment Company Ltd and another (1978) 4 h S.C. 9, the veil was lifted and it was found that the Chairman of the Board of Directors of the first defendant Company was also a Director of the second defendant who entered into oral agreement with the plaintiff. Further, the first appellant in his evidence at page 116 of the records stated as i follows:– “Yes when decisions were taken at the time, I took them and communicated the decisions, to other Directors. On other occa- sions, I formally informed other Directors.” j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J Dr Stanley Macebuh v. Nigeria Deposit Insurance Corporation 515 a On communicating the decision to the other Directors, the third respondent raised no dissenting voice but acquiesced. From the above, it is clear that the first appellant was the al- b ter ego of the Company and now the first defendant Com- pany has no asset (page 116 lines 18 and 19 of the Tribunal record of proceedings). We are satisfied that the learned Judge of the Lower Tribunal was right in lifting the corporate veil in ascertaining the Directors liability. c Learned Counsel for the appellants contended that before the veil is lifted it must be shown that the device of incorporation is used for some illegal or improper purpose. The d learned Counsel also contended that funds were not diverted to the use and benefit of the first appellant, but the foregoing evidence does not support the contention. The second issue for determination is whether the Lower e Tribunal was right in holding that the debt of N24,625,814.23 was proved against the first appellant. But it is clear in the evidence before the learned Judge of the Lower Tribunal and the pleadings that the first and second appellants did not deny paragraphs 1, 2 and 3 of the appli- f cant’s pleading in it’s application, as to the addresses of first to third respondents who were said to be borrowers on page 18 of the record. Apart from this, exhibits T and V were tendered. Exhibit T is the Statement of Account of first respon- g dent which he maintained with the defunct bank when in operation. Whilst exhibit V is a Certified True Copy of the Trade Bills of Exchange Account, there is also a letter written by the first respondent signed by him Stanley Macebuh h for asset lease facility of N24 million. It is on record that indebtedness was proved against the first respondent in the case before the Lower Tribunal and judgment was entered in favour of the applicant and there i has been no appeal against it. It was as a result of lifting the veil of Corporation on first respondent that the liability became attached to the second respondent now the appellant. The learned Counsel for appellant further contended that j the Tribunal has no jurisdiction to entertain the claim of [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J 516 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

N20,000,000 for which judgment had been obtained in a exhibits G–G7 as “judgment debt” does not come within the definition of “Debt” in the Decree and that it is an abuse of the process of Tribunal or Court for the Lower Tribunal to b enter judgment for the same amount in the claim. He opined that the definition does not cover judgment debt. But section 29 Failed Banks Decree No. 18 of 1994 defines “debt” as follows:– c “’Debt’ means any loan, advance, credit accommodation, guarantee or any other credit facility together with the interest thereon, which remains outstanding, and unpaid against a customer of a bank in favour of the Bank. d It therefore follows that the N20,000,000 judgment in exhibits G–G7 in favour of the Alpha Merchant Bank which remains unpaid comes within the definition of debt in the Decree in respect of which the Tribunal has jurisdiction to deal with. e It is correct to say that the judgment in exhibits G–G7 is still unpaid when the action was taken before the Tribunal. The payment of the amount on exhibits G–G7 can be en- f forced by the Order of Tribunal. There was no oral evidence, all that was done was to tender it (exhibits G–G7) and once the Tribunal gives judgment on it, exhibits G–G7 had no binding effect any more as the judgment of the Tribunal supersedes it and that will be the subsisting judgment on the g matter and so it is erroneous to say that there exist two judgments in respect of the N20,000,000 claimed by the respondent, NDIC. h Learned Counsel in his argument said there must be evidence of fraud or improper use of the money by the applicant or the first respondent – Marissa Investment Limited but the evidence shows that part of the Bank money was used by the first applicant in purchasing his land at Lekki i Peninsular and there is evidence that the first appellant had to pay some of the debt personally and so it cannot be genu- inely argued that such use of Bank money is not improper (see exhibits 25, 25A and 26). j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J Dr Stanley Macebuh v. Nigeria Deposit Insurance Corporation 517 a Leaned Counsel also informed us that section 290 of Com- panies and Allied Matters Act was not canvassed before us in Metalloplastica (Nig.) Plc and others v. NDIC Appeal b No. SAT/FBT.279/96 (1997) 1 FBTLR 171 when this Tri- bunal held as follows:– “We are of the view that the Learned Trial Chairman of the Lower Tribunal was in duty bound to give the consent judgment full c weight and meaning. In fact the said consent judgment has become a right” which has accrued to the applicant. In Manchester and Milford Railway Co v. Exparte Cambrian Rly. Co (1880) 14 Chancery Division Page 645, it was held that the only evidence required of an application by a judgment Creditor is d an affidavit that the applicant is such a Creditor and that his judgment debt is unsatisfied. The applicant in the Lower Tribunal went further than that, he produced the judgment itself exhibit B.” In this case the respondent tendered the judgment, exhibits e G–G7 in the court below and in the circumstance, the Chair- man of the Lower Tribunal should give it full weight and meaning. In the circumstance if section 290 CAMA was canvassed in the Metalloplastica (Nig.) Plc case the result f would have been the same. In view of the evidence before the Lower Tribunal we hold that the judgment of Lower Tribunal was right in holding that the first appellant was using the Company as a cloak or g sham and so we agree the veil was rightly lifted and since the first defendant has no asset (see page 19 of the record) it is necessary for the Directors to pay the debt of the Com- pany to the creditor. h In the cross appeal, the learned Counsel for the respondent said that the Lower Tribunal ruled that the third respondent was not liable as he was not served with the Writ of Sum- mons and therefore the proceeding against him in the Lower i Tribunal is a nullity. Learned Counsel to the respondent informed us that there is no credible evidence before the Lower Tribunal to show that the respondent Dr Ogunbiyi was not served. He informed us in the case in which exhibits j G–G7 is the judgment, the first appellant, Dr Stanley [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J 518 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Macebuh, gave evidence that he instructed Counsel to de- a fend them (the four defendants) in the case and that Counsel Chief Nwokolo, represented them (all the defendants) including Dr Ogunbiyi, he entered unconditional appearance b on behalf of all the defendants. There is also evidence on record that at the time, Chief K.H.C. Nwokolo and Co filed Statement of Defence for the 4 defendants including the third respondent Dr Ogunbiyi. Their Solicitors K.H.C. c Nwokolo also filed counter-claim on their behalf. In the case before the Lower Tribunal, the applicant/respondent in the case called three witnesses whilst the first respondent – Stanley Macebuh; Theophilus Boufini, RW2 and Mrs d Oladimeji Okewale, gave evidence for the respondents and the Counsel for Dr Ogunbiyi, third respondent closed the case for his client. The evidence of service of the Writ of Summons was elic- e ited by cross-examination of the third respondent witness Okewale who stated on Page 63 line 5 of the record as follows:– “I cannot say that the third respondent – Dr Ogunbiyi was served f with the originating summons and that there was no endorsement of service on the writ of Dr Ogunbiyi – third respondent.” The other evidence is that of RW3, Mrs Okewale, a Legal Practitioner in the Law Firm of Messrs Ayanlaja, Adesanya g and Co at pages 157–159 who gave evidence that she was instructed to conduct a search into the case file of Alpha Merchant Bank Plc v. Marissa Investments Suit No. LD/2565/93 in order to find out whether there was affidavit h of service in respect of the Writ of Summons and Statement of Claim in respect of all the defendants. She conducted the search and found out that only one affidavit of service dated 18th November 1993 in respect of summons for judgment dated 8th November 1993 was in the file. This shows that i the file did not contain the affidavit of service of any of the respondents in the file relating to the case LD/2565/93, all of them were present at the trial and Counsel represented some of them. j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J Dr Stanley Macebuh v. Nigeria Deposit Insurance Corporation 519 a The question to ask is whether from the evidence of non- service of writ of summons given in this case is there any credible evidence from which to hold that the third respon- b dent was not served with the writ of summons? In a case of this nature one would have expected credible primary evidence would be given. For instance the third respondent Dr Ogunbiyi should not have closed his case as announced by his Counsel without giving evidence. His testifying that he c was not served with the writ of summons would have thrown a brighter light on his case and that would have been a direct and primary evidence that he was not served, he would have told the Tribunal how he came to be in Court. d His Counsel, Chief Nwokolo was said to have entered unconditional appearance for him and others. He was present in court and did not give evidence to show that the third respondent, Dr Ogunbiyi, was not served and would have told e (the Tribunal) how he came about filing all the papers on his behalf. Maybe it would have helped the third respondent’s case if Chief Nwokolo had sworn to an affidavit showing that neither he nor his client was served with the writ of f summons. Although the third respondent knew that he was not served with the writ of summons, yet he contested the case to full on merits notwithstanding (See exhibits 31A, B and C). After the judgment in exhibits G and G7 was delivered, the third respondent appealed and none of the Grounds of Appeal g raised the issue of non-service of the originating summons. It appears that the issue of non-service is an after thought. In Shobogun v. Sanni and others (1974) 1 All N.L.R. (Part 2) 311 at 36 it was stated that it is the accepted view that h where all the facts are available to the party, it is desirable to raise such technical point in Court below so as to give the notice to the opposing party of the case he has to meet. In this case the third defendant did not raise the issue of non- i service at all. Further Order 9 Rule 11 High Court of Lagos (Civil Pro- cedure) Rules, 1994 Cap 61 Laws of Lagos State provides:– “A defendant before entering an unconditional appearance shall j be at liberty without obtaining an Order to enter or entering a [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J 520 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

conditional appearance to take out a summons to set aside the ser- a vice upon him of the writ or notice of the Writ or to discharge the order authorising such service.” The third respondent did not take advantage of this provision b of the law. His Counsel entered unconditional appearance for him exhibit F. He filed a joint Statement of Defence and counter-claim on behalf of the third respondent and others exhibits 32, 32A and B, 34A, B and C. c The respondent filed counter-affidavit through his Counsel Chief Nwokolo and Company for application for judgment under Order 10 of the Lagos High Court (Civil Procedure) Rules and the application was duly contested. The third re- d spondent and his Counsel did not raise the issue of non- service of the Writ of Summons in his counter-affidavit. The issue was only raised in the amended brief of argument by his present Counsel. e In our view the Learned Trial Judge of the Lower Tribunal was in error when he said that the appellant was not served as there was no credible evidence on record to justify such an assertion. Our attention was drawn to the case of Sken- f consult (Nig) Ltd v. Ukey. In that case there was credible evidence to substantiate the irregularity as the service of the Writ was in breach of the statutory period provided in sections 98, 99 and 101 of the Sheriffs and Civil Process Act g Cap 189 Volume 8 Laws of Federation of Nigeria, 1990 this was a credible evidence to support it. So also in N.B.N. Ltd v. Guthrie (Nig.) Ltd (1993) 3 N.W.L.R. (Part 284) 643. In the N.B.N. Ltd’s case there was a motion challenging the h service which was contested. In this case there is no credible evidence that the third respondent was not served. He contested the case to the full on merit. The issue was not raised by preliminary objection. i There is therefore a presumption of waiver. The concept of waiver is that a person who is under no legal disability and having full knowledge of his right or interest conferred on him by law and who intentionally decides j [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J Dr Stanley Macebuh v. Nigeria Deposit Insurance Corporation 521 a to give them or some of them up, cannot be heard to complain that he has not been permitted the exercise of those right or that he had been denied the enjoyment of those in- b terest. By contesting the case to the full on merit without earlier taking preliminary objection that he was not serviced with the writ before trial, the third respondent must be deemed to c have waived whatever right he had under the law. (See J.U. Ezomo v. George B.L. Oyakhire (1985) 2 S.C. 260 at 274). In Ariori and others v. Elemo (1983) 1 S.C. 13 at pages d 48–49 it was held that appearance is a waiver of irregularity. The appearance is a submission to the jurisdiction. Eso, JSC (as he then was) had this to say about waiver:– “The concept of waiver must be one that pre-supposes that the per- e son who had the choice of two benefits and fully aware of his rights to the benefit or benefits but he either neglects to exercise his right to the benefit or when he had a chance of two he decided to take one but not the other.” f The third defendant in this case, Dr Ogunbiyi had the advantage of raising the issue of non-service when the case was to start, he entered unconditional appearance, filed his State- ment of Defence. He was present during most of the time at g the hearing, he did not raise the issue. His Counsel was in court. No affidavit was sworn to or filed so as to show that he was not served. Above all he himself did not give evidence. All he was able to show was that there was no affida- h vit of service in the case file. The failure of the respondent to produce credible evidence of non-service justifies the conclusion that he had waived his right to contend that he was not served. i In the main appeal it has been shown above that as a result of improper use of the Bank’s money by the first appellant the Lower Tribunal was right in finding the first appellant the “alter ego” of first respondent – Marissa Investment j Company liable jointly and severally with other Directors [1994 – 1996] 6 N.B.L.R. (PART II) (SPECIAL APPEAL TRIBUNAL, LAGOS ZONE) Odunlami J 522 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. after lifting their corporate veil. The second appellant (i.e. a fourth respondent) did not contest the case. It is our view that the learned Judge of the Lower Tribunal justifiably found appellant liable jointly and severally to pay b the respondent the N24,625,814.23 with the other Director (the fourth respondent). In the circumstances, the appellants’ appeal is dismissed and the judgment of the Lower Tribunal is affirmed in so far c as the appellants are concerned. In so far as the cross appeal against the dismissal of the claim against Dr Ogunbiyi the respondent is concerned, the fact that the respondent did not tender any credible evidence d of non-service of the writ, supports the view that the respondent – Dr Ogunbiyi was served and the learned trial Judge of the Lower Tribunal was in error when he held that he was not served. e There is evidence that the other Directors were aware of the improper manner in which first appellant was running the Company and none of them including the respondents raised any dissenting voice. It is therefore clear that all the f Directors tacitly, acquiesced to how the first appellant was conducting the Company’s affairs whereby a huge amount of money was owed by first respondent Marissa Investment Limited to Alpha Merchant Bank which had to be declared g failed bank by the Central Bank. In view of all the above, we hold that the Lower Tribunal was in error when he dismissed the claim against the respondent – Dr Ogunbiyi. In the circumstances the judgment h of the Lower Tribunal is set aside and the Appeal against it is allowed. The respondent, Dr Ogunbiyi, is found liable jointly and severally with the other Directors in respect of the N20,000,000 in exhibits G–G7 as claimed by the appel- i lant. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Nigeria Deposit Insurance Corporation v. Taraku Mills Ltd 523 a Nigeria Deposit Insurance Corporation and Another v. Taraku Mills Limited and Another b FAILED BANKS TRIBUNAL, BENIN ZONE MOMOH J Date of Judgment: 14 NOVEMBER 1996 Suit No.: FBT/BZ/3/96/M4 c Failed Banks Tribunal – Judgment – Application to set aside judgment in default on ground that parties contemplated settlement at the time judgment given – Whether valid ground for setting aside judgment d Failed Banks Tribunal – Judgment Default judgment – Ap- plication to set aside on ground of non-service of hearing notice – Hearing notice served on occupier of address for service given by respondent – Occupier not forwarding e documents to respondent – Whether judgment will be set aside, Paragraph 7, Schedule 1, Failed Banks Decree No. 18 of 1994 (as amended) Failed Banks Tribunal – Entry of appearance in civil mat- f ters, Paragraph 7, Schedule 1, Failed Banks Decree No. 18 of 1994 (as amended) – Address for service and name of occupier – Duty of respondent to insert – Respondent giving address for service and name of occupier – Occupier served g with processes meant for respondent – Occupier not forwarding documents to respondent – Whether service thereby vitiated Failed Banks Tribunal – Service of process therein – Service h on occupier at address for service given – Party complaining of non-receipt of process – Whether proper – Attitude of Tribunal – Paragraph 23(2) Schedule 1, Failed Banks De- cree No. 18 of 1994 (as amended) i Facts The Tribunal gave judgment against the judgment debtors/applicant on 31st July, 1996 for the sum of j N7,831,851.92 (Seven Million, Eight Hundred and Thirty [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

524 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

One Thousand, Eight Hundred and Fifty One Naira, Ninety a Two Kobo ) in their absence. The first judgment debtor/applicant contended that they were absent from the Tribunal during the proceedings lead- b ing to the judgment because serious negotiations were embarked upon by the parties to settle the matter amicable out of the Tribunal in the course of which N1 million (One Mil- lion Naira ) was paid to the judgment creditor on 28th June, c 1996 as part settlement of the debt owed and they undertook to pay up the balance in three quarterly instalments. The second judgment debtor on its part contended that they did not receive the hearing notice of the proceedings leading d to the judgment. However, there was evidence before the Tribunal that the second judgment debtor filed a memorandum of appearance, a reply and a motion on notice and the address for service supplied therein was care the Attorney- e General of Edo State in Benin who was duly served with the hearing notice and other processes. There was also no evidence in the Tribunal record to justify the averment of the Attorney-General of Edo State that when he could not get f the documents physically to Benue State, he returned the documents to the Tribunal. Paragraphs 7(1) and 23(2), Schedule 1, Failed Banks De- cree No. 18 of 1994 (as amended) read:– g Paragraph 7(1):– “The debtor shall:– (a) within such time after being served or deemed to be served with the notice of the application as may stated in the no- h tice; or (b) where an order has been made under sub-paragraph (2) of Paragraph 6 of this Schedule, within such other time (if any) as may be stated in that order. i enter an appearance by filing in the Registry a memorandum of appearance in Form D in the Appendix to the Schedule stating that he admits the debt or that he intends to oppose the application and giving the name and address of his solicitor, if any, or stating that he acts for himself, as the case may be, and in either case giving an j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Nigeria Deposit Insurance Corporation v. Taraku Mills Ltd 525 a address for service within five kilometres of a post office in the Judicial Division and the name of its occupier, at which documents intended for the debtor may be left.” b Paragraph 23(2):– “After a party has given an address for service, it shall be sufficient if, in lieu of serving him personally with any document intended for him, such document is served:– c (a) on the person appearing on the paper last filed on his behalf as his solicitor wherever such person may be found or, if such person is not found at his office, on the clerk there apparently in charge or; d (b) on the person named as occupier in his address of service wherever such person may be found or, if such person is not found at such address on:– (i) the person there found apparently in charge, if such address is a place of business; or e (ii) any person other than a domestic servant there found who is a resident thereof and appears to be eighteen years of age or more.” Held f – 1. The fact that arrangement towards amicable settlement of the debt was in contemplation of the parties does not debar the applicant from pursuing this action for the re- g covery of the amount due or does it constitute a valid ground for failing to appear and defend the action or does it constitute valid ground for upsetting the judgment given in the absence of the first respondent’s repre- h sentative. Per curiam “The application by the first respondent company lacks merit as the aforestated reasons given for failure to appear i and defend the applicant’s action do not constitute exceptional grounds upon which a judgment could be set aside. The affidavit in support of the motion failed to disclose any possible defence to the applicant’s action and did not deny the Company’s indebtedness to the New Nigeria Bank Plc j in the sum claimed.” [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

526 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

2. By the combined effect of paragraphs 7 and 23(2) of a schedule 1 Failed Banks Decree No. 18 of 1994 (as amended) a respondent entering appearance ought to put in his memorandum of appearance an address for service b and the name of its occupier within 5 Kilometres of a post office in the judicial division of the Tribunal. Once this is done it is sufficient if in lieu of serving him personally the document intended for him is served on the c persons named as occupier in the address for service. In the instant case the service on the Attorney-General of Edo State is tantamount to service on the second judgment debtor since that was their address for service. d Since the second judgment debtor was served, the judgment will not be set aside. Per curiam e “The service on the Attorney-General of Edo State as given by the Tribunal is tantamount to service on the respondents. A break down in communication between the respondents and the Attorney-General’s office after due service on the latter becomes an internal issue between them and extrane- f ous or irrelevant to the propriety of the service duly effected by the Tribunal. Failure therefore on the part of the respondent to receive the hearing notice from Benin address due to no fault of the Tribunal does not vitiate the service and g would not constitute a ground for setting aside the judgment given in absence of the respondents. The second respondent duly filed a memorandum of appearance on 1/7/96 but failed to follow it up by attending h the session of 10/7/96 fixed for hearing despite due service of the hearing date on the second respondent through his counterpart’s office in Benin City as aforesaid.”

Application dismissed. i

Nigerian rules of court referred to in the judgment Failed Banks Decree No.18 of 1994 (as amended), Para- graph 7(1) Schedule 1, Paragraph 23(2) Schedule 1 j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Nigeria Deposit Insurance Corporation v. Taraku Mills Ltd 527 a Counsel For the applicant/respondent: Mr Nnamdi Nwabueze For the first respondent/applicant: Mr T.I. Iber b For the second respondent/applicant: Mrs V.Y.B. Sanusi

Judgment c MOMOH J: The first and second judgment debtors namely Taraku Mills Limited and the Attorney-General of Benue State each filed a motion for an order setting aside the judgment of this Tribunal delivered against them in their absence d on 31st July, 1996 in the sum of N7,831,851.92. The amount represented the debt due to the New Nigeria Bank Plc, a failed bank under the control and management of the judgment Creditor (NDIC). The first respondent’s motion dated e and filed 7th August, 1996 is supported by an affidavit deposed to by Isa Baba, an Attorney in the firm of Solicitors, Terna Agor and Company for the judgment debtors. The main reasons given in his affidavit for the absence of Coun- f sel and/or respondents from the Tribunal during the proceedings leading to the judgment are that: serious negotiations were embarked upon by the parties to settle the matter ami- cably out of Tribunal in the course of which the first respondent paid N1 million to the applicant on 28th June, 1996 as g part settlement of the debt owed and undertook to pay up the balance in three quarterly instalments. Paragraphs 13 to 17 of the first respondent’s affidavit contain the grounds upon which the judgment is sought to be set aside. The paragraphs h state:– “13. That contrary to the trend for amicable resolution of this suit in accordance with the proposed terms for amicable resolution and the instalmental repayment aforesaid, we i were surprised that the applicant/respondent proceeded with this matter and judgment was delivered in the absence of the respondents/applicants by this Honourable Court on the 31/7/96 and even for the full amount originally claimed by the applicant/respondent despite our instalmental repay- j ment. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 528 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

14. That I believe that this Honourable Court was not aware of a the extent the parties have gone on the course of amicable resolution before delivering judgment on the 31/7/96. 16. That the respondents/applicants are ready to contest the ap- b plicant’s application before this Honourable Court on the grounds of law and upon the facts. 17. That it is in the interest of justice that the judgment of this Honourable Court delivered on the 31/7/96 in the absence of the respondents/applicants be set aside and this matter be c heard and disposed of on the merits.” In his address, Mr Iber, the learned Counsel for the first respondent relied on the affidavit in support of his motion. He added that there is no counter-affidavit and that the facts de- d posed to in support remain unchallenged. RULING The application by the first respondent company lacks merit as the aforestated reasons given for failure to appear e and defend the applicant’s action do not constitute exceptional grounds upon which judgment could be set aside. The affidavit in support of the motion failed to disclose any possible defence to the applicant’s action and did not deny the f Company’s indebtedness to the New Nigeria Bank Plc in the sum claimed. The fact that arrangement towards amicable settlement of the debt was in contemplation of the parties does not debar the applicant from pursuing this action for g the recovery of the amount due or does it constitute a valid ground for failing to appear and defend the action or does it constitute valid ground for upsetting the judgment given in absence of the first respondent’s representative. The first ap- h plicant’s motion is liable to be dismissed for the above reasons. ORDER: First applicant’s motion is dismissed. Turning to the second motion filed on behalf of the second i respondent seeking an order setting aside the judgment. The main ground relied upon is that the hearing notice of the proceedings leading to the judgment was not received by the second respondent. The two affidavits in support of the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Taraku Mills Ltd 529 a motion were deposed to on the 9th August, 1996 and 16th August, 1996, respectively by G.S. Fanyam Director of Civil Litigation, Ministry of Justice, Makurdi. The affidavit dis- b closed, inter alia, that upon being served with the Applica- tion for the recovery of debt the second respondent filed a Memorandum of Appearance, a Reply and a Motion on No- tice. The address supplied for service in was care of the At- c torney-General of Edo State in Benin City who was duly served with the hearing notice and other processes. That the said Attorney-General decided to return the processes to the Tribunal as unserved when he could not send them physically to Makurdi. That the letter marked as exhibit A to the d affidavit was the copy of the letter by the Ministry of Justice Benin returning the unserved process to the Tribunal. Exhibit A was written by Fred Ejededawe. e It is convenient at this stage to interject by pointing out that the Registrar of the Tribunal, Joseph Okozi deposed to an affidavit denying ever receiving the process allegedly returned to the Tribunal. This was confirmed by the Affidavit f of Fred Ejededawe (the writer of exhibit A) of the Ministry of Justice, Benin who deposed that nobody received or signed for the process on behalf of the Tribunal and that the despatch clerk of the Ministry of Justice, Benin could not g account for the movement of the documents. From all facts deposed to in the various affidavits it stands out clearly that the respondents were duly served with the notice of hearing in this action through the Benin address h supplied. This has satisfied the requirements by the procedure for the Recovery of Debts at the Tribunal. Paragraph 7 of the Schedule 1 to the Failed Banks etc Decree No. 18 of 1994 dealing with the entry of appearance requires, inter i alia, that the address for service and the name of its occupier within 5 kilometers of a post office in the Judicial Division of the Tribunal shall be stated in the Memorandum of Ap- pearance. The second respondent complied by giving the At- j torney-General’s office in Benin. Paragraph 23(2) of the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 530 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Schedule further provides that after a party has given an ad- a dress for service, it shall be sufficient if, in lieu of serving him personally, for the document intended for him to be served on the persons named as occupier in the address for b service. The service on the Attorney-General of Edo State as given by the Tribunal is tantamount to service on the respondents. A break down in communication between the respondents and the Attorney-General’s office after due ser- c vice on the latter becomes an internal issue between them and extraneous or irrelevant to the propriety of the service duly effected by the Tribunal. Failure therefore on the part of the respondent to receive the hearing notice from Benin d address due to no fault of the Tribunal does not vitiate the service and would not constitute a ground for setting aside the judgment given in absence of the respondents. The second respondent duly filed a memorandum of ap- e pearance on 1st July 1996 but failed to follow it up by attending the session of 10th July 1996 fixed for hearing despite due service of the hearing date on the second respondent through his counterpart’s office in Benin City as afore- f said. There is no merit in this second application to set the judgment in question aside and it shall be denied. ORDER: The second applicant’s motion is dismissed. g [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 531 a Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu and Others b FAILED BANKS TRIBUNAL, ZONE V, LAGOS AUGIE J Date of Judgment: 18 NOVEMBER 1996 Suit No.: FBF MT/L/ZV/026/96 c Banking – Offences – Charge of fraudulently granting credit facility without adequate security – Section 18(1) Banks and Other Financial Institutions Decree No. 25 of 1991 Banking – Offences – Stealing – Bank Customer given d “Cheque purchase facility” contrary to rules and regularities of bank – Customer utilising the funds – Whether fact that is accepted banking practice can make it legal Dishonoured Cheques Offences – Ingredients of offences e under the Act – When Court will convict Failed Banks Tribunal – Evidence – Admissibility of – Rele- vancy the guiding factor f Failed Banks Tribunal – Trial of accused in absentia – When permissible – Section 27 Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No.18 of 1994 (as amended) g Facts The first accused person was a customer of A.C.B Umuahia Main Branch in the name Mess 25 (Nig.) Limited and the h second accused person was the Branch Manager. The Bank Inspectors discovered that the first accused person presented cheques totalling N3.7 Million Naira, and direct credit was made to the first accused person though the cheques were not passed to the appropriate clearing department and when i eventually sent for clearing they were returned unpaid. The accused persons were arraigned on an 18 count charge for stealing punishable under section 390(9) of the Criminal Code, conspiracy punishable under section 1 of the Dishon- j oured Cheque (Offences) Act, granting credit facilities [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

532 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. without lawful authority punishable under section 18(1) of a the Banks and Other Financial Institutions Decree No. 25 of 1991. Held – b 1. Section 27 of the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No. 18 of 1994 (as amended), makes provision for trial in absentia but only in circumstances where the accused person is out- c side the country. 2. The Failed Banks Tribunal can try an accused person in absentia but he must be outside Nigeria and there must d be evidence to that effect. The mere fact that an accused person is said to be at large or his whereabouts unknown does not mean he will be tried in absentia, he must be outside Nigeria to be so tried for an offence under Failed Banks Decree No.18 of 1994 (as amended). In the in- e stant case the second and fourth accused persons can be tried in absentia since there is evidence before the Tribunal that they are outside Nigeria. The third, fifth and seventh accused persons can however not be tried in f absentia since the prosecution did not lead evidence to show that they are outside Nigeria. 3. Section 3(4) of Failed Banks Decree No. 18 of 1994 (as amended) gives the failed Banks Tribunal the power to g admit and act on any evidence which it considers relevant in any civil or criminal proceedings notwithstanding the fact that the evidence is inadmissible under any other law or enactment. Consequently since exhibits h C1and C2 contain rules and regulations of A.C.B. which relate to the charge before the Tribunal the exhibits are admissible in evidence. 4. An illegality remains an illegality and no amount of i banking practice will make it lawful. In this case, the second accused in purchasing the cheques of the first accused, did not only contravene the rules and regulations of A.C.B., as shown in exhibits C1 and C2, he also j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 533 a committed an offence contrary to and punishable under section 18(1)(b) and (2) of BOFID. 5. Where an accused is charged with the offence of con- b spiracy to fraudulently grant credit facilities without any security or collateral pursuant to section 18(1)(b) of BOFID, the prosecution should prove that the facility enjoyed is one in which adequate security before the fa- c cility is granted. In the instant case, there is no evidence before the Tri- bunal that the facility enjoyed by the first accused with the Umuahia Main Branch of A.C.B. is one which ade- d quate security is required before the facility is granted. The first, second, fourth and sixth accused persons are therefore not guilty of the offence. e 6. By the combined effect of sections 383(1), 383(2)(f ) and 390(9) of the Criminal Code, a person who fraudulently takes anything capable of being stolen or fraudulently converts to his own use or to the use of any other person f anything capable of being stolen is said to steal that thing and in the case of money he must have done so with the intent to use it at the will of the person who takes or converts it although he may intend afterwards to repay the amount to the owner. In the instant case when g first accused received N81.4million from Umuahia Main Branch of A.C.B., the money did not belong to him, he was not lawfully entitled to the money as the credit facility was unauthorised, the money was siphoned from h A.C.B through fraudulent means which he was aware of and even though he intended to pay back the money to the bank as he did with N53million, he admitted he used the money at his own will for his different businesses: i importation, transportation and the distillery factory he set up in Nkwere. The irresistible inference from all the above facts, and the only conclusion that can be arrived at, is that the first accused actually stole the money be- j longing to A.C.B. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

534 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

7. The first accused person received credit on the basis of a his cheques which were returned unpaid, and that he did so knowing that he had no funds to back the cheques, more so, he knows that the cheques would be returned b unpaid. Accused persons convicted.

Cases referred to in the judgment c Nigerian Adereti v. A.G. Western State (1965) 1 All N.L.R. 266 Atano v. The State (1988) 2 N.W.L.R. (Part 75) 201 d Clark v. State (1986) 4 N.W.L.R. (Part 35) 381 Egbongbonome v. State (1993) 3 N.W.L.R. (Part 306) 383 Enitan v. The State (1986) 3 N.W.L.R. (Part 30) 604 e Erim v. The State (1994) 5 N.W.L.R. (Part 346) 522 Gufwat v. State (1994) 2 N.W.L.R. (Part 327) 435 Ikem v. The State (1985) 1 N.W.L.R. (Part 2) 378 Majekodunmi v. The State (1952) 14 WA.C.A 64 f Njovens v. The State (1973) All N.L.R. (Part 1) 481 Nwakudu v. C.O.P. (1978) 2 L.R.N. 108 Nwankwo v. The State (1990) 2 N.W.L.R. (Part 134) 627 g Nwede v. The State (1985) 3 N.W.L.R. (Part 13) 444 Nwosu v. State (1986) 4 N.W.L.R. (Part 35) 348 Ogba v. The State (1990) 3 N.W.L.R. (Part 139) 505 h Okosi v. The State (1989) 1 N.W.L.R. (Part 100) 642 Onagoruwa v. The State (1993) 7 N.W.L.R. (Part 303) 79 Shazali v. State (1988) 5 N.W.L.R. (Part 93) 79 The State v. Aje (1989) 1 L.R.N. 281 i Foreign Macfoy v. UA.C. (1961) W.L.R. 1405 R v. Mucahy (1868) 3 H.L. 306 j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 535 a Nigerian statutes referred to in the judgment Banks and Other Financial Institutions Decree No. 25 of 1991, section 18(1) b Criminal Code Cap 77 Laws of the Federation of Nigeria, 1990, section 390(9) Dishonoured Cheques Offences Act Cap 102 Laws of the c Federation of Nigeria, 1990, section 1 Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No. 18 of 1994 (as amended), section 27 d Counsel For the Prosecution: Mr Idris Abubakar For the first accused person: Mr Okey Amechi For the sixth accused person: Mr Na-Allah e Judgment AUGIE J: Seven accused persons were arraigned before this Tribunal on a 22 count charge alleging the following of- f fences – Stealing punishable under the section 390(9) of the Criminal Code, conspiracy punishable under section 516 of the Criminal Code, offences in relation to dishonoured cheques punishable under section 1(1) of the Dishonoured g Cheques (Offences) Act; and granting credit facilities without lawful authority punishable under section 18(1)(b) of the Banks and Other Financial Institutions Decree No. 25 of 1991 (“BOFID”). At the close of the case for the prosecu- h tion, Mr Idris Abubakar, learned Counsel for the prosecution, sought and was granted leave to amend the charge by deleting counts 5, 6, 9 and 22 and substituting a phrase in the new Count 5. i The first accused Obed Chika Ugwuadu, and the sixth accused Emeka Titus Abakporo, who were the only accused persons present at the trial, pleaded not guilty to the respective counts against them. On an application by the prosecu- j tion, a plea of not guilty was entered for the other accused [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 536 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. persons said to be at large, i.e. the second accused – a Ugochukwu Duru, the third accused – Mrs M.U. Njoku, the fourth accused – Mr N.I. Nwaiwu, the fifth accused – Mr M.N. Ezenwa and the seventh accused – Mrs C.B. Nwa- b chukwu. To prove the case against the accused persons, four witnesses testified on behalf of the prosecution and tendered a number of documents admitted in evidence as exhibits A to c S. Thereafter, Mr Okey Amechi, learned Counsel for the first accused and Mr Bala Na-Allah, learned Counsel for the sixth accused, made no-case submissions on behalf of the first and sixth accused persons. The respective submissions d were overruled and the first and sixth accused persons were called upon to enter a defence to allegations against them. They each gave evidence as DW1 and DW2, respectively and did not call any other witnesses. exhibit T D and U D1 e to U D7 were admitted in evidence through the first accused as DW1, while exhibit V was admitted in evidence at the instance of the learned Counsel for the first accused. f At the close of the case for the defence, Mr Amechi adopted in the no case and made further submissions in his address on the behalf of the first accused. Mr Na-Allah equally did the same on behalf of the sixth accused person, and after the address of the learned Counsel for the prosecu- g tion, the case was set down for judgment. On the day judgment was to be delivered, 1st November, 1996, Mr Idris Abubakar brought an application asking the h Tribunal to stay judgment and to recall the IPO (“Investigat- ing Police Officer”) who had earlier testified as PW4 to give further testimony. The application was granted and the IPO Ahmed Fari Yusuf, was called and he gave evidence as to i the whereabouts of the second and fifth accused persons, which is crucial in this case. It is a cardinal principle of our criminal justice system that an accused person must be present in court during the whole j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 537 a of his trial, from the taking of his plea to the return of verdict and sentence, except:– 1. Where the Magistrate, under the provision of section b 100 of the Criminal Procedure Act (CPA), dispenses with the presence of the accused person after pleading guilty to an offence punishable with no more than N100 fine or 6 months imprisonment or both; or c 2. Where the court is investigating the question of the accused’s insanity and is of the view that in the interest of the accused or of the public decency, the accused’s presence may be dispensed with. d Except in the aforementioned circumstances, an accused person must be present in court during his trial. However section 27 of the Failed Banks (Recovery of Debts) and Fi- nancial Malpractice in Banks Decree No. 18 of 1994, makes e provision for trial in absentia but only in circumstances where the accused person is outside the country. Section 27 of Decree No. 18 of 1994, reads as follows:– “The absence from Nigeria of a debtor or of a person who has f committed an offence under this Decree shall not prevent his case being heard and determined or his being tried and convicted under this Decree.” In other words, the Tribunal can try a person in absentia but g he must be outside Nigeria and there must be evidence to that effect. The mere fact that an accused person is said to be at large or his whereabouts unknown dose not mean he will be tried in absentia, he must be outside Nigeria to be so tried h for an offence under Decree No. 18 of 1994 (as amended). When PW4 gave evidence earlier, he testified that he led a team of detectives to Umuahia, where they arrested only the first accused, sixth accused and PW3 as the other accused i persons were on the run, and he gave details of the frantic efforts made by the police to arrest the accused persons. He said when all efforts failed, they strongly suspected that the other accused persons must be outside the country. When he j was now recalled by the prosecution, PW4 testified that after [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 538 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. his earlier evidence, desperate efforts were made to arrest a the second and fourth accused persons and based on information received that the accused persons were in U.S.A. and Spain respectively, which they asked Interpol to confirm, he b led a team of detectives back to Owerri and Kano. He said Interpol confirmed that the second accused was sighted in New York and the fourth accused was sighted in Madrid. The issue here is, which of the accused persons are on trial c before the Tribunal? The first and sixth accused persons were present throughout the trial. Decree No. 18 of 1994 allows the Tribunal to try in absentia, accused persons who are outside the country and there is evidence that the second d and fourth accused persons are not in Nigeria. The third, fifth and seventh accused persons were not present during the trial and there is no evidence that they are outside Nige- ria, PW4 merely testified that they could not be located in e the country, so they strongly suspected they must be outside the country. A Court cannot act on speculation and suspicion no matter how strong, can never take the place of legal proof. See Nwankwo v. The State (1990) 2 N.W.L.R. (Part f 134) 627. I therefore hold that the accused persons on trial here are Obed Chika, Ugwuadu, Ugochukwu Duru, Mr N.I. Nwaiwu and Emeka Titus Abakporo, listed on the charge sheet as the first, second, fourth and sixth accused persons, respectively. g Now, the brief facts of the case for the prosecution are as follows – PW1 (Paul Chikezie) the branch manager of A.C.B. Umuahia main branch testified that the first accused h was a customer of the branch with an account No. 0723 in the name of MESS 25 (Nig.) Ltd, and that the sixth accused was a former staff of the branch. The following exhibits were admitted in evidence through PW1, they are – the mandate file on account No. 0723 as exhibit A, 17 ledger i card in respect of account No. 0723 as exhibit B1–B17, 2 circulars from A.C.B. head office as exhibits C1–C2, 2 ledger cards in the name of the fourth accused (Noah I. Nwaiwu) as exhibit D1 and D2; 2 ledger cards in the name j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 539 a of the fifth accused (Ngozi E. Ezenwa) as exhibit E1–E2 and 33 cheques drawn by the fourth accused as exhibits F1–F33. Chief Emeka Onuoha of the Inspection Department of b A.C.B. gave evidence as PW2, that during an inspection tour of the A.C.B. Umuahia main branch in October, 1994 they found four cheques from C.C.B. Nkwere drawn and paid into the account of MESS25 (Nig.) Ltd owned by the first c accused in the drawers of the sixth accused, and that the cheques totalling N3.7 Million which were supposed to have left for clearing, had been credited direct into the first accused person’s account instead of passing them through the d prescribed clearing account, which meant that the first accused had been given value against the uncleared instrument. The cheques were then sent out for clearing but were returned unpaid, while they were there, more cheques were e returned even though money had been released. At that stage PW2 said they became suspicious and investigations revealed that through the connivance of some of the bank staff, a lot of money had been fraudulently si- f phoned through the use of dud cheques paid in by the first accused and immediate value given against the uncleared instrument. Furthermore, that the first accused had no facility for overdraft and no guidance facility was approved for g him. As part of their investigations, they checked with C.C.B. Nkwere where the first accused was drawing the cheques and found that between January, 1994 to October, 1994, the first accused had paid in a total of N81.5 million h C.C.B. Nkwere cheques into the account of MESS 25 (Nig.) Ltd with the Umuahia main branch of A.C.B. by direct credit without going through clearance. He said investigations revealed that a lot of the cheques were returned unpaid i and were not reflected in the Umuahia account and N24 Mil- lion could not be accounted for either at A.C.B. Umuahia or C.C.B. Nkwere. PW2 further testified that they structured the account, by j debiting it with the value of the cheques suspected to have [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 540 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. been intercepted or destroyed, plus the debit balance already a in the account which was N9.1 Million, and total exposure came up to about N34 Million. He said, at this stage the first accused was given a chance to reconcile the account with b them and he admitted in writing that he owed the bank N7 Million plus, promising to make good the account. This letter was admitted in evidence as exhibit G. Other exhibits admitted in evidence through PW2 are as c follows The interim report of the Inspectors admitted as exhibit H; 9 recovered cheques admitted as exhibits 11 to 19, 18 tellers in respect of intercepted cheques admitted as exhibits J1 to J18; a reconciliation statement from the first ac- d cused admitted as exhibit K; 3 bundles of tellers relating to the first accused person’s account from February to October, admitted as exhibits L1 to L3; a contra-cashier’s waste admitted as exhibits M. During cross-examination by Mr e Amechi, learned Counsel for the first accused, 2 exhibits were admitted through PW2 at the instance of the defence and they are – a second inspection report written by PW2 admitted as exhibit N D and a letter from A.C.B. head office to the first accused admitted as exhibit O D. f The exhibits admitted through PW4 are – The letter of complaint from the NDIC admitted as exhibit P; the statements of the first and sixth accused persons to the police g admitted as exhibits Q1 and Q2, the statement of particulars of 7 vehicles seized from the first and sixth accused admitted as R; a statement of particulars of 3 other vehicles seized from the first accused admitted as evidence R1; and a letter from the first accused to the M.D. A.C.B. through the F.B.I. h (Failed Banks Inquiry) admitted as exhibit S. PW3 is Patrick Maduagwu Opara, a former member of staff of A.C.B. Umuahia Main branch who merely identified i certain aspects of the exhibits before the Tribunal. He identified exhibits C1 and C2 as operational circulars and guidelines of the bank. He identified the signatures of the first accused on the exhibits 11 to 19 and on the combined mandate and signature card in exhibit A. He identified the signatures j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 541 a of the fourth accused on exhibit F1 to F33, the initials of the fourth accused in exhibits 1 to 18 as well as the initials of the second accused in exhibits L1 to L3. b The first accused gave evidence in his defence as DW1. He admitted that as M.D. of MESS 25 (Nig.) Ltd he opened an account no. 0723 with Umuahia Main branch of A.C.B. but insisted that in opening and operating the account, all proper c procedures were followed. His defence is that, as he continued to operate the account very well, he applied for a facility and was advised by the Branch Manager, one Ejeh, to apply for “cheque purchase”, and this was the facility he was en- d joying from Ejeh to Okwara who succeeded Ejeh then to Duru (the second accused). When the second accused came in 1993, DW1 said he approached him to maintain the facility and the second accused asked him to put it in writing, e which he did and so continued to enjoy the facility. He said the bank continued to collect interest on the facility and in 1994, the interest rate was 21% and 1% facility fee on the bulk of the amount and that Inspectors of the bank used to inspect the account bi-monthly or monthly and they would f normally come to his office to show appreciation for maintaining a good account as he was one of their good customers. DW1 explained that he had to have his cheques purchased g because he had a very big depot for his distillery at Nkwere where people from Rivers, Edo, Owerri, Onitsha and the whole Anambra came to purchase his goods, so he opened an account with C.C.B. Nkwere and A.C.B. Umuahia purchased the cheque to avoid them carrying cash. DW1 further h explained that he had money in the Nkwere account and they did not need to wait for the cheques to clear because they needed cash on a regular basis. All this time he said the Bank Managers and Inspectors did not tell him that they i were not authorised to purchase cheques from him until 18th October, 1994 when one Chief Adiele, a Chief Inspector, came to his residence to inform him that the facility he was enjoying was not made known to Head Office and that they j were having problems with A.C.B. as some of his cheques [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 542 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. were returned unpaid and there was a debit of N7.5 Million a Naira. DW1 said Chief Adiele asked him to write a letter to the Head Office to cover the second accused who was likely to lose his job and it was out of sympathy for the second ac- b cused that he wrote exhibit G. He also admitted he signed exhibit K which is headed (Missing/Intercepted Cheques Reconciliation), after he met with Chief Adiele to reconcile accounts, but that Chief Adiele did not mention that he intercepted or had anything to do with the missing cheques. c DW1 testified that he was arrested by Abia State Police in December, 1994 and released after the police concluded that it was a commercial transaction, he was arrested again on the 12th January, 1995 by the Presidential Task Force on d Trade Malpractice and released when the P.T.F investigated and concluded that it was a commercial transaction. He said the P.T.F. asked to make proposals for repayments and while in detention, A.C.B. sold the bags of corn starch he e had imported into the country and took the proceeds. A copy of the bank draft for N4,331,250 was admitted in evidence as exhibit T D. DW1 said he made other payments of N231,000 and N500,000, and in 1995, paid into A.C.B. the f sum of N5,262,250 pending reconciliation of actual debt but he was again arrested by the F.I.I.B. Alagbon on the 8th January, 1996. After two months in detention DW1 said the investiga- g tothers came to him and told him they had gone through the Abia State Police Command’s report the P.T.F.’s report and suggested that he make proposal to repay so that he could be released as they were releasing customers of Allied Bank and that was when he signed exhibit S, a letter to A.C.B. h headed “Re: Our indebtedness of N34.3 Million to A.C.B. Plc” and attached a copy of the minutes of a meeting he had with the Head Office before they reconciled the accounts to ascertain how much he was owing. He said the police typed i exhibit S and brought it to him for signature and since they were in a hurry, they did not put a date on it. DW1 denied bribing anybody, denied intercepting any of his cheques, denied conspiring with anyone to intercept any j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 543 a of his cheques or have any of his cheques missing, denied receiving N34 Million as facility from A.C.B.; denied stealing any money from A.C.B., denied conspiring with any- b body to defraud A.C.B. of any money, denied conspiring with anybody to grant unlawful credit facilities to MESS 25, and denied that any of the cheques mentioned in counts 8– 18 were ever dishonoured. c On his own part, the second accused gave evidence in his defence as DW2. He testified that the Inspectors were already in the bank before he came to work that day, and they immediately called on him to assist them with the materials d they needed for their inspection. He admitted that he did not send the cheques to Owerri for clearing but gave two reasons for his failure to do so. First of all, that he was being used by the Inspectors throughout the whole day and sec- e ondly, because of the mass retrenchment in the branch, two other duty schedules of up country clearing as well as receiving cashier was added to his normal duty in local clearing as well as machine room, and he had to attend to those schedules too. He further explained that the strong room was f locked that day, so he could not put the cheques in there as was the normal practice and therefore had to keep them in his drawer, after scheduling them to go for clearance the next day. The next day, DW2 said one of the Inspectors g asked him whether he had sent the cheques for clearing and when he explained that he had not done so because he was busy with the Inspectors, the Inspector asked him for the scheduled cheques and he gave it to them. h Now, the first, second, fourth and sixth accused persons were arraigned before the Tribunal on the amended 18 count charge. Counts 1, 5 and 6 relate to stealing, Counts 1 and 3 relate to conspiracy, Count 4 relate to the grant of credit fa- i cility without lawful authority, while Counts 7–18 relate to offences under Dishonoured Cheques (Offences) Act. Count 1 of the amended charge reads as follows:– “That you OBED CHIKA UGWUADU while being a customer of j A.C.B at Umuahia operating account No. 0723 for and on behalf [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 544 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

of MESS 25 (Nig.) Ltd between 10th February, and 11th October, a 1994 did commit a felony, to wit, you stole the sum of N34,359,000 and you thereby committed an offence punishable under section 309(9) of the Criminal Code – read together with section 3(1) Failed Banks (Recovery of Debts) and Financial Mal- b practices in Banks Decree No. 18 of 1994.” Section 390 of the Criminal Code creates the offence of stealing, which is defined in section 383(1) of the Criminal Code as follows:– c “383(1) A person who fraudulently takes anything capable of being stolen, or fraudulently converts to his own use or to the use of any other person anything capable of being stolen, is said to steal that thing.” d In order to constitute stealing, there must be an element of fraud. Section 383(2) of the Criminal Code sets out 6 fraudulent intents, and the relevant intent here in subsection (2)(f): e “In the case of money, an intent to use it at the will of the person who takes or converts it, although he may intend afterwards to repay the amount to the owner.” In his address on behalf of the first accused, Mr Okey f Amechi submitted that for someone to steal any money under section 390(9) of the Criminal Code he must have done so fraudulently with the intent as spelt out in section 383(2)(f ) of the Criminal Code, and that if that intent is g lacking then there is no fraud, and if there is no fraud then there is no stealing. He argued that there is no evidence by the prosecution that the giving of money and taking of money which is alleged to have been stolen in Count 1 is in- h consistent with the owners interest and that of the owner here is A.C.B, represented at the Umuahia Main Branch by the second accused, the manager who gave the facility to the first accused. i Mr Amechi further submitted that in the absence of evidence that the first accused on his own broke and entered into A.C.B. and stole the amount involved, and that in the presence of the evidence that it was the second accused, the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 545 a bank manager who used his prerogative to give the facility to the first accused, then a charge of stealing of this type cannot succeed without a count of conspiracy between the b first accused and the second accused to steal this amount. In other words, that Count 1 cannot stand without a count of conspiracy to steal this amount allegedly stolen. He referred the Tribunal to the case of Adereti and another v. A.G. West- c ern State (1965) 1 All N.L.R. 266, for his submission that the mens rea for stealing in circumstances of this case does not lie in the knowledge that the bank manager had no power to grant the facility, but rather that the mens rea lies in whether in granting or taking the facility, fraud was com- d mitted. In Adereti and another v. A.G. Western State (supra), the Supreme Court, per Ademola, C.J.N. (as he then was) stated e at page 269:– “The manager of a bank has a general authority to deal with the bank’s money, and it is difficult to see, in the absence of fraud on his part, how he can be said to have stolen his employer’s money f merely because he parts with money to a bank’s client whose funds are low. The same applies to the client who, in the absence of fraud, receives an overdraft; we are unable to agree that he is guilty of theft — the giving of credit to a customer of a bank dose not in the absence of fraudulent intent, in our view, amount to g stealing of bank’s money. The taking of an overdraft from a bank, even in breach of instructions, is no more than accepting a loan; it cannot be stealing ––— In his consideration of this case, the learned Judge did not deal with the charge of conspiracy, the absence of which, in our view renders the case of stealing nebulous. h For if there was no agreement between the bank manager and the client to defraud the bank, clearly they cannot be charged with stealing in respect of the overdrafts the bank gave.” On his own part, Mr Abubakar, replied that Adereti’s case i has no application here, as it was decided before the promulgation of BOFID, when there were no rules and regulations guiding the grant of facilities, so that any customer who issued a cheque on an unfunded account was applying j for a loan and the loan was allowed by allowing him to [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 546 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. overdraw the account or rejected by returning his cheque. a He submitted that in this case, there are circulars such as exhibits C1 and C2 which are regulations of the bank, ban- ning the grant of credit by a manager and that, that is what b makes the grant unlawful, so that a breach of exhibits C1 and C2 results in a breach of the provisions of BOFID. He argued that no such rules and regulations existed in Adereti’s case (supra) and so the situation cannot be the same as in c this case. I agree with Mr Abubakar, that the situation in 1965 when Adereti’s case (supra) was decided is different from today in 1996, when we have BOFID, NDIC Decree and Decree No. d 18 of 1994 as amended by Decree No. 18 of 1995. However, I agree with Mr Amachi that the first accused did not break into A.C.B and steal the money alleged to have been stolen, but was given the money by the manager who has a general e authority to deal with the bank’s money. I am therefore guided by the decision of the Supreme Court in Adereti’s case (supra), and consider it necessary to first of all deal with the counts on conspiracy. f The first, second, fourth and sixth accused persons are charged in Count 2, with conspiring to commit felony, to wit:– “Fraudulently granting credit facilities to MESS 25 (Nig.) Ltd, in g the aggregate sum of N34,359,000 without lawful authority in contravention of the Bank’s rules and regulations and thereby committed an offence punishable under section 516 of the Criminal Code.” h They also charged in Count 3 with conspiring to commit a felony, to wit:– “Fraudulently granting credit facilities to MESS 25 Nigeria Ltd. In the aggregate sum of N34,359,000 without any security or collateral contrary to the bank’s rules and regulations and thereby com- i mitted an offence punishable under section 516 of the Criminal Code.” Section 516 of the Criminal Code provides that “any person who conspires with another person to commit any felony, to j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 547 a 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 b 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 convicted of felony in question is liable is less than imprisonment for 7 years, then to such lesser punishment.” c On Counts 2 and 3, Mr Amechi submitted that they are based on the fact that accused agreed to do acts allegedly done in the counts and that the agreement was fraudulent, so that it makes it mandatory for the prosecution to prove the d essential elements, which are (1) that there was an agreement and (2) that the agreement was fraudulent. He argued that there was not an iota of evidence by any of the prosecution witnesses showing conspiracy, that is the agreement by e the accused persons to do what they alleged. Mr Amechi contended that there was no evidence because these counts were based on exhibits C1 and C2, which are internal management rules of the bank and there was no evidence that f these documents were brought to the knowledge of the accused, and despite such knowledge, he went on with the accused persons to take the facilities. He cited the case of Njovens v. The State (1973) All N.L.R. (Part 1) 481, to sup- g port his submission that exhibits C1 and C2 are internal documents of A.C.B. and for anybody to be said to have conspired, there must be direct evidence to that effect. Mr Amechi further submitted that the first accused could h not have conspired to grant fraudulent facility or unlawful grant because he does not work in the bank, does not give out facilities but only received the facility in the circumstances, on behalf of his company. He argued that the facility in issue took place immediately his cheques were pur- i chased for him by the bank, and the bank took interest on the facility. He further submitted that PW1, PW2 and PW3 all agreed under cross-examination that the practice of purchasing cheque is a normal banking practice and there is evi- j dence that his cheques were clearing, and that from N81 [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 548 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Million, they charged him with N34 Million, part of which a they admitted is in interest charges. It is his contention that the purchasing of cheques pre dated the coming of the second accused to the branch and that this was admitted by b PW1 and restated by the first accused in his defence. Mr Amechi therefore urged the Tribunal to dismiss those counts and discharge and acquit the first accused on Counts 1, 2 and 3. c In his address on behalf of the sixth accused person, Mr Na-Allah submitted that the law on conspiracy is concerned with the criminal agreement and the meeting of the mind and referred the Tribunal to the observation of Wills, J in R d v. Mucahy (1863) 3 H.L. 306, that “The gist of the offence dose not lie in the doing of the act, but in the forming of the agreement”. He contended that none of the prosecution witnesses gave any credible evidence as to the agreement to e conspire against the sixth accused person. He cited the case of Majekodunmi v. The State (1952) 14 WA.C.A 64; Ikem v. The State (1985) 1 N.W.L.R. (Part 2) 378 and Atano v. The State (1988) 2 N.W.L.R. (Part 75) 201, to buttress his sub- f missions that conspiracy must be proved as a matter of fact, and that where the prosecution relies on circumstantial evidence, the law required that the ordinary test of circumstantial evidence must be met. He submitted that the test, is that g the evidence must be cogent and compelling and there must not be any aspect of the evidence that will weaken or destroy he inference that the court is entitled to make. h Mr Na-Allah argued further that four witnesses testified and PW2 never said that the sixth accused attended any meeting or had discussions with any officer of the bank, or even with the first accused for the purpose of the conspiracy, and that there is even no chain between the sixth accused i and any other person. He was therefore of the view that the criminal agreement which is the most essential element of the offence of the conspiracy has not been proved against the sixth accused person. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 549 a On his own part, Mr Abubakar, learned Counsel for the prosecution, referred the Tribunal to the decision of the Su- preme Court on the element of conspiracy in Erim v. The b State (1994) 10 K.L.R. (Part 22) 31; see also (1994) 5 N.W.L.R. (Part 346) 522. The Supreme Court held in that case that “the offence of conspiracy is completely committed the moment two or more persons have agreed that they c 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 pre- d vented or fail in what they agreed to do, the offence is already a fait accompli. To start with, there is no doubt that granting credit facili- e ties to customers runs contrary to rules and regulations of A.C.B. and this is evident from exhibits C1 and C2. When the prosecution sought to tender exhibits C1 and C2 in evidence, Mr Amechi objected to their admissibility on the ground they are not relevant to this case. The exhibits were f admitted in evidence with the proviso that the issue of its admissibility or otherwise would be addressed in this judgment. I have examined the exhibits in question, and I am of the firm view that they are relevant in this case. By section 2 g of the Failed Banks (Recovery of Debts) and Financial Mal- practices in Banks (Amendment) Decree No. 18 of 1995, a new subsection (4) to section 3 of Decree No. 18 of 1994, allows the Tribunal to “admit and act on any evidence which h it considers relevant in any civil or criminal proceedings notwithstanding the fact that the evidence is inadmissible under any law or enactment.” (Italics mine.) Exhibit C1 dated 17th July, 1991, is headed “Provisions of i Banking (Amendment) Decree, 1972, in Relation To Unau- thorised and Uncollaterised Lending” and it reads as follows:– “It has been observed with regret that in spite of various circulars j providing guidelines for lending and granting of credit facilities, [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 550 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

branch managers and lending officers continue to grant unauthor- a ised and uncollaterised loans and credit facilities in contravention of Banking (Amendment) Decree, 1972 – and the rules and regulations of the bank. Henceforth management has decided that in addition to other disciplinary measures, it will apply the provisions b of Banking (Amendment) Decree, 1972, to erring staff. For avoidance of doubt, the relevant provisions of the Decree is reproduced there under section 11A(1)(a), (b), (c) and (2) —.” Exhibit C2 dated 2nd June, 1992 and headed “Subject: Cross c Firing of Cheques”, reads:– “In our previous Circular, . . . dated 1st July, 1991, all branch man- gers were instructed to desist from purchasing cheques and paying them against uncleared effects. Despite the heavy punishment at- d tached to the above offence, some managers continued to purchase cheques into some accounts. To track down and punish such of- fenders, the following measures are to be adopted immediately:– . . . All managers are once more reminded that they pur- e chase cheques into their customers accounts at the risk of their job. All Zonal Inspectors should conduct should conduct snap checks on Branches with returned cheques and where existing regulations have been infringed upon, a report should be made to the appropriate quarters. Please be f guided accordingly.” Section 11A of the Banking (Amendment) Decree, 1972, mentioned in exhibits C1 comprises of the same provisions in section 18 of BOFID. Section 18(1) and (2) of BOFID g reads as follows:– “18(1) No manager or any other officer of a bank shall (a) . . . (b) grant any advance loans, or credit facility to any per- h son, unless is authorised in accordance with the rules and regulations of the bank; and where adequate security is required by such rules and regulations, such security shall, prior to the grant, be obtained for the advance, loan or credit facility and shall be deposited i 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 j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 551 a section is guilty of an offence under this section and liable on conviction to a fine of N100,000 or to imprisonment for a term of 3 years, and in addition, any gains of benefits shall vest accordingly in the Federal Govern- b ment, and the gains or benefits shall vets accordingly in that Government.” It is an indisputable fact therefore, that the branch managers in A.C.B. were prohibited from lending or granting unau- c thorised and uncollaterised loans and credit facilities to customers of the bank including purchasing of cheques and paying them against uncleared effects. d The second accused person, Mr Ugochuwkwu Duru, was a manager at the Umuahia Main Branch of the A.C.B. This fact is established by the prosecution witnesses, exhibits H and N D, and corroborated by the first accused person in his e evidence as DW1. The second accused was not present at the trial and there is no defence on his behalf. It is trite law that unchallenged and uncontradicted evidence must be believed and acted upon as truth. See Okosi v. The State (1989) 1 N.W.L.R. (Part 100) 642; Nwede v. The State (1985) 3 f N.W.L.R. (Part 13) 444 and Shazali v. The State (1988) 5 N.W.L.R. (Part 83) 164. The second accused was alleged to have fraudulently g granted credit facilities to MESS 25 Nigeria Limited. The principal witness of the prosecution is PW2 and his evidence on this issue is ad follows:– “Our investigations into the account revealed that a lot of money h had been fraudulently siphoned through the use of dud cheques paid by the customer and immediate value given against the uncleared instruments. It became clear to us that a massive fraud had been carried out through the collaboration of some of the bank staff. We also discovered on enquiry that the customer had no fa- i cility for overdraft whatsoever and that no guidance facility was approved for him.” In his address on behalf of the sixth accused person, Mr Na- Allah argued that PW2 did not mention the names of the j bank staff who colluded to carry out the fraud, and therefore [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 552 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. urged the Tribunal on the authority of Onagoruwa v. The a State (1993) 7 N.W.L.R. (Part 303) 49, not to speculate that PW2 meant the sixth accused and other staff which he had not mentioned. It is trite law that a court cannot act on b speculation, but the issue of speculation dose not arise here. PW2 gave evidence that he led a team of inspectors to the Umuahia Main Branch of the A.C.B. and two of his reports on the inspection tour are in evidence as exhibits H and N D. The names of the bank staff allegedly involved in the fraud c are specifically mentioned, and the second accused is one of them.

In his submissions, Mr Abubakar argued that the first and d second accused agreed to provide the facility, and that the evidence of the first accused is admissible against the second accused to show what they agreed to do. He submitted that in addition, all the prosecution witnesses clearly indicated that the second accused was the head of the branch and re- e sponsible for its operation, and that it is reasonable to infer that the second was involved in the conspiracy.

I agree with Counsel’s submission that the evidence of the f first accused as DW1 can be used as evidence against the second accused. See section 177(2) of the Evidence Act which deals with the evidence of a co-accused. What that section says, in effect, is that the evidence of a co accused dose not require any corroboration before a court can act on g it unlike the evidence of an accomplice which must be corroborated in all material particular. All the same it has been held that it is prudent and desirable in the interest of justice for the court to look for evidence other than that of a co ac- h cused that tends to make the evidence of the co accused more credible. See Enitan v. The State (1986) 3 N.W.L.R. (Part 30) 604 and Nwankudu v. C.O.P. (1978) 2 L.R.N. 108. The first accused is not disputing the fact that he enjoyed i credit facilities from the Umuahia Main Branch of A.C.B. in his evidence as DW1, he said:– “I asked for a facility, then I was advised by the branch manager, one Ejeh to apply for cheque purchase, they normally charge 1% j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 553 a facility fee and 21% or whatever is the interest rate in that year, for the number of days the cheque is supposed to be cleared. This was the facility I was enjoying. It ran through Ejeh, through Okwara who succeeded Ejeh and then to Duru (the second accused). Duru b came in 1993, then I went to him when they changed Okwara and asked for the facility to be maintained. Then he told me that I should give him a month. I went back after a month, he now asked me to apply in writing for the said facility which I had been enjoy- c ing and my cheques were all clearing, none returned.” DW1 did not say whether he received approval for his application or not, he merely said:– “I did apply, this was also known to the Zonal Head Chief An- d yanwu, who was supervising the branch manager. I applied and in the letter I was asked to copy the Zonal Head. I continued enjoying the facility and my cheques never returned. The bank continued to collect interest on the facility.” e However during cross-examination, he answered Mr Abubakar’s question as follows:– “I asked Duru (second accused) who asked me to put it in writing but it is not in exhibit A, which is my file. It was handwritten, so I f do not have any copy of the application. The manager approved my cheques. I was not given written approval. The application was hand written and has been removed. There is no documentation before the court to show approval for the facility I was enjoying.” That is the evidence of the first accused in his defence as g DW1, but that was not what he explained in exhibit Q1, his statement to the police. I believe it will be necessary at this stage of the judgment, to make specific findings as to which of the evidence to accept. h Exhibit Q1 is the statement of the first accused to the Po- lice 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 N.W.L.R. (Part 139) 505. In exhibit Q1 i the first accused stated:– “In 1993, we started a factory for distillery and confectioneries. It was during this period that the facility above mentioned was granted. I will therefore take you back. In 1989, we started distill- j ery . . ., in the course of our transaction with the bank, I was given [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 554 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

some credit in the branch. Mr Ejeh did help us. Mr Okwara did a and I did pay back. It was during the building of this factory in 1993, that we applied to Mr Ugochukwu Duru, the branch manager of A.C.B. for a direct cheque facility. He agreed that he, Mr Duru, would help us obtain the facility, hence he advised the pur- b chasing of our C.C.B. Nkwere Branch (sic).” (Italics mine.) The first accused as DW1 said the second accused took over the branch in 1993 and in exhibit Q1, he explained that it was when he started a factory in Nkwere that the second ac- c cused agreed to help by purchasing their C.C.B. Nkwere Branch cheques. He stated therein:– “Ugochukwu Duru now started helping us in April, 1994. I opened the account between April and October, 1994. He was giving us d money hence we were using it for different businesses both importation, transportation and the factory. We were also paying back immediately. Between April and October, 1994, Mr Ugochukwu Duru gave us N81.4 Million. We did pay back N53 Million before e the inspectors came in October, 1994. When they came and said Mr Duru has gone contrary to rules of leaning in my account (MESS 25 Nig. Ltd). I had to approach them on how to salvage the situation.” Obviously, the evidence of the first accused as DW1 is in- f consistent with his statement in exhibit Q1 recorded on 13th January, 1996. However, the law now, is that where an accused person makes an extra judicial statement which is inconsistent with his testimony at the trial, such testimony is g no longer treated as unreliable and the statement is regarded as evidence on which the court can act. Such a statement, once legally admitted in evidence, will be juxtaposed with all the evidence in court including the defence so as to de- h cide the general merit of the case. See Egbongbonome v. The State (1993) 7 N.W.L.R. (Part 306) 383. (Italics mine.) Looking at the other evidences before the Tribunal, exhibits UP1 to UP7, the statements of the account of then first i accused with the C.C.B. Nkwere branch supports the case of the prosecution and is consistent with the statement of the first accused in exhibit Q1. Mr Amechi, Learned Counsel for the first accused objected to the admissibility of the exhibits j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 555 a on the ground that the documents were not the statement of account of the first accused, as it did not show where it came from. He argued that it was a bundle of C.C.B. Nkwere sheet b with some entries and that the evidence was not relevant to the case. The exhibits were admitted in evidence with the proviso, that the issue of its admissibility or otherwise would be ad- c dressed in this judgment. I have examined the exhibits in question and I am of the firm view that they are relevant to this case, and as I pointed out earlier, section 3(4) of Decree No. 18 of 1994, allows the Tribunal to admit and act on any d evidence which it considers relevant in any civil or criminal proceedings notwithstanding the fact that the evidence is inadmissible under any other law or enactment. I find exhibit UP1 to UP7 relevant, and even though the e first accused denied that they were not his, I believe exhibit UP1 to UP7 are the statements of account of the first accused with C.C.B. Nkwere, for the following reasons. exhibit UP1 to UP7, are on the letterhead sheets of “Co opera- f tive and Commerce Bank (Nig.) Plc; the account No. 3463 is in the name of the first accused, Ugwuadu Obed Chika the account was opened on the 2nd of March, 1993 and the transactions on the account are payments to MESS 25 Nig. Ltd, Obed Chika Uguwuadu (first accused) and Beichkers g Industries. In evidence as DW1, the first accused explained that he had a big depot in Nkwere and had to open an account with h C.C.B. Nkwere. During cross-examination, he admitted he had an account No. 3463 with C.C.B. Nkwere which is in his name and that Mess 25 Nig. Ltd, and Beichkers Indus- tries belonged to him. As Mr Abubakar rightly observed, a cursory look at the exhibits show that it is interwoven in the i affairs of the accused persons; Beichkers Industries and Mess 25 Nig. Ltd, more so as the Mess 25 Nigeria Ltd’s cheques in exhibit UP1 to UP7, are the same being paid in and out in exhibit B1 to B17, and A.C.B. drafts are on the j credit side in the exhibit UP1 to UP7. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 556 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

In my view, exhibits UP1 to UP7 is consistent with the a statement of the first accused in exhibit Q1, and it also but- tresses the case for the prosecution against the second accused. Consequently, I find as a fact that the second accused b granted unauthorised credit facilities to the first accused. Mr Amechi in his arguments on behalf of the first accused, submitted that the manager of the bank personifies the Bank at the branch level and that whatever action in that branch is c deemed to be action of the bank. He urged the Tribunal to find that it was the bank who gave the first accused the facility even though the second accused did not comply with exhibits C1 and C2. He further submitted that where a prac- d tice is ordinarily lawful, it cannot be made unlawful by a mere technical fact not known to the accused. He pointed out that the prosecution witnesses admitted that apart from the internal management rules of the bank, the act of purchasing cheques is a normal banking practice and that PW1 e particularly, admitted that it was not the first time they had given this type of facility to the accused from the ledger. He therefore urged the Tribunal to hold that this practice is ordinarily lawful and that the mere fact that exhibits C1 and f C2 which are merely internal rules of the bank seek to forbid the bank officers from purchasing these cheques cannot be read against the first accused to turn this ordinary lawful act in to an unlawful act. g I do not share the view of Mr Amechi, very attractive as it may appear. I am of the firm view that an illegality remains an illegality and no amount of banking practice will make it lawful. As Lord Denning observed in Macfoy v. U.A.C. h (1961) W.L.R. 1405, “You cannot put something into nothing and expect it to stay there. It will collapse”. In this case, the second accused in purchasing the cheques of the first accused did not only contravene the rules and regulations of i A.C.B. as shown in exhibits C1 and C2, he also committed an offence contrary to and punishable under section 18(1)(b) and (2) of BOFID. Even if, the second accused represented the bank at the branch level, he went beyond his mandate as manager and committed an offence when he purchased the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 557 a cheques of the first accused and paid them against uncleared effects. The bedrock of the offence of conspiracy, is the agreement b to do something unlawful, consequently, there can be no conspiracy unless at least two persons conspire. See Ikemson v. The State (1989) 3 N.W.L.R. (Part 110) 455 and Erim v. The State (supra). In the instant case, the first accused has c put a defence that he did not know that the facility was unauthorised until he was informed in October, 1994, by Chief Adiele, an Inspector of the bank. Mr Amechi submitted that there was no direct evidence that the second accused re- d ceived exhibits C1 and C2 and more importantly, that there is no evidence exhibits C1 and C2 were brought to the notice of the first accused. He argued that instead the prosecution witnesses admitted that exhibits C1 and C2 constituted in- e ternal management rules of the bank. He was therefore of the view that to the extent that the first accused was not brought to the knowledge of exhibits C1 and C2, they cannot be heard against him and the Tribunal cannot presume knowledge of their contents against him. f In countering this line of defence, Mr Abubakar urged the Tribunal to treat exhibits G, K, V and S as confessions in coming to a decision on Count 1. He referred to sections 27, g 28 and 31 of the Evidence Act, and the decisions of the Su- preme Court in the cases of Ikemson v. The State (1989) 3 N.W.L.R. (Part 110) 455 and Nwabuenyi v. The State (1994) 5 S.C.N.J. 8 as authorities for his submission that the Tribu- h nal can ground a conviction on the confessional statement of an accused person alone. To start with, the prosecution’s case the first accused is explained in the testimony of PW2 as follows:– i “Between January, 1994 and October, when we arrived, the customer had paid in a total of N1.5million C.C.B Nkwere into MESS 25 in Umuahia Main Branch by direct credit without going through clearance. As he paid in, they gave him draft. Our investigation at Nkwere revealed that a lot of the cheques were returned j unpaid and were not reflected in Umuahia account or C.C.B. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 558 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Nkwere . . . We structured the account, that is by debiting the ac- a count with the value of cheques suspected to have been intercepted or destroyed since they could not be accounted for at both ends, plus the debit balance already in the account which is N9.1Million and total exposure came up to about N34 Million . . . when I ar- b rived there, I discovered that the advance party had already issued a query to the branch manager for the sum of N7million plus. — I am aware that the customer owned up to the N7mullion plus, promising to make good the account. He did this in writing. (ex- c hibit G identified).” Exhibit G, dated 18th October, 1994, is a handwritten note signed by the first accused. Addressed to the A.C.B. Head Office and headed “Our A/C No. 0723 in Your Umuahia d Main about N7.5million” it reads:– “We wish to state that the above account which was overdrawn without Head Office approval will be put to credit within one month of this document. We also wish to state that payments must e commence on or before 25th or 26th of October, 1994. Please bear with us. We shall also commit our factory documents when we are normalising the credit.” On the face of it, it is obvious, that exhibit G is an admission by the first accused that he knew that the “cheque purchase” f facility he was not approved by A.C.B. But in his evidence as DW1, he explained that he wrote exhibit G out of sympathy for the second accused, when Chief Adiele told him to do something if he wanted the second accused to continue g with his job as some of his cheques were returned unpaid and there was a debit of N7.5million. In exhibit Q1, he stated that when the Inspectors came in October, 1994, and said the second accused had gone contrary to the rules of h lending in the account of MESS 25 (Nig.) Ltd, he approached them on how to salvage the situation. The evidence of the first accused as DW1, has so far been quite inconsistent with his statement to the police but as I i pointed out above, the Supreme Court in the case of Egbog- honome v. State (supra) reversed their earlier decision and held that where an accused person makes an extra judicial statement which is inconsistent with his testimony at the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 559 a trial, such testimony will no longer be treated as unreliable and the statement will be regarded as evidence on which the court can act, unlike that of ordinary witnesses. b The first accused obviously lied to the Tribunal as DW1, but an accused person cannot be found guilty just because the court believes he is a liar, the onus is on the prosecution to prove the case against him beyond reasonable doubts. See c Gufwat v. The State (1994) 2 N.W.L.R. (Part 327) 435, Nwosu v. The State (1986) 4 N.W.L.R. (Part 35) 348, where the court held that the fact of lying alone without more does not make an accused guilty of the charge made against him d in a criminal trial. But if that of lying, together with other facts and circumstances in the particular case go to show that the accused is guilty of the offence charged, that lie can be considered as relevant evidence against him. e Now, whether the first accused wrote exhibit G out of sympathy for the accused, or whether he approached the management of the bank on his own initiative to “salvage the situation”, I am of the view that a reasonable man in the f same situation, would not have reacted the same way as the first accused did, if he was not aware that the facility was unauthorised. I believe a reasonable man, upon being told by Bank Inspectors that a credit facility he was enjoying was unauthorised, would have protested immediately or ex- g plained his situation that he believed the transaction was genuine. But, the first accused who said he is a Business- h man/Industrialist and an ex-banker who had worked with First Bank for many years, did not do that, rather he immediately wrote an incriminating letter (exhibit G) admitting that his account was overdrawn without approval. PW2 said he arrived at Umuahia on the 13th October, 1994 for the in- i spection tour of the branch; when he got there, the advance party had queried the manager for the N7.5million, his interim report is dated the 18th October, and exhibit G, which the first accused admitted he wrote after the arrival of the j Inspectors, is also dated the 18th of October, 1994. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 560 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

I have no hesitation whatsoever in finding that the first ac- a cused was fully aware of the fact that the “cheque purchase” facility he was enjoying was unauthorised. I have arrived at this conclusion for many reasons. First of all, the first ac- b cused is an ex banker who rose up to the rank of supervisor in First Bank, so he is expected to know at the very last, the rudimentary rules of banking. He said he wrote an application for the credit facility he was enjoying at the Umuahia c Main Branch of A.C.B., but admitted that he was not given written approval. Notwithstanding that, he enjoyed the said facility and admitted in exhibit Q1, that the second accused gave him N81.4million before the Inspectors came and the d bubble burst. Secondly, the first accused did not only write exhibit G, he also signed exhibits K and S as well, and I agree with Mr Abubakar that the contents of exhibits K and S amount to an e admission on the part of the first accused. At the close of the case for the defence, Mr Amechi informed the Tribunal that the Registrar had mistakenly given him a document from the prosecution, similar to exhibit K with a different heading, f and on his application the said document was admitted in evidence as exhibit V. I have examined both documents and they are exactly the same in contents, however while exhibit K is headed “Missing/Intercepted Cheques reconciliation”, g exhibit V has “Reconciled Acct. by both Suspect and In- spectors” written in red biro at the top of the page. In his evidence in chief as DW1, the first accused said:– “When I saw K, the word on top was just ‘missing’ and I asked h ‘what is missing’ and he (Chief Adiele) explained that the waste clerk missed or misplaced the cheques. I did not know how I would have intercepted cheques. When I signed exhibit K, he did not mention that I intercepted or had anything to do with the missing cheques. He brought exhibit K for reconciliation of my ac- i counts. I brought my dockets to ascertain that I issued the cheques and that was the purpose of the reconciliation.” I am therefore satisfied that exhibit K is the document the first accused admitted he signed, and even if what he saw j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 561 a was the word “missing” on exhibit K, that is enough pointer that all was not well with the facility had been properly documented and formalised, there would have been no need b for the first accused to bring his dockets to reconcile which cheque was missing or not. Exhibit S is a letter from the first accused to the MD/CEO of A.C.B. through the Failed Bank Inquiries (FBI), headed c “Re: Our indebtedness of N34.3million to A.C.B. Plc”. Even though the first accused claimed the Police typed exhibit S and brought it to him for signature, the relevant aspect of the exhibit to the issue at hand, is the minutes of meeting at- d tached to it. The first accused admitted that he had a meeting with the management of A.C.B. at their Head Office, Lagos, he admitted he signed the minutes of the said meeting on the 2nd of December, 1994, and he admitted he attached a copy e of the said minutes to exhibit S. The decision reached at the meeting the first had with the management of A.C.B., the minutes of which he attached to exhibit S, is in paragraph 3.0 of the minutes, and paragraphs 3.3 and 3.4 of the min- f utes as follows:– “3.3. Documentation and Formalisation of the Indebtedness:– The indebtedness, which arose unauthorised lending made to the customer by the bank’s main branch at Umuahia and g consequently was not properly documented and formalised, shall be fully documented and formalised. The customer undertakes to co operate maximally to achieve this objec- tive in accordance with bank’s laid down credit process and procedure. (Italics mine.) h 3.4. Offering and Taking of Collateral security for the debt:– The customer undertakes fully to secure the indebtedness. In this respect the fixed and floating assets of the company (MESS 25 Nig. Ltd) as well as those of a sister company, i Beichkers Industries Ltd, Umuahia, shall be offered to the bank by the customer.” Apart from the fact that the first accused signed the minutes admitting that his indebtedness to the bank arose from unau- j thorised lending, a common thread runs through exhibit G [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 562 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. written on the 18th of October, 1994, and the minutes of the a meeting held on the 2nd of December, 1994. In exhibit G, the first accused said “Please bear with us. We shall also commit our factory documents when we are normalising the b credit” and the attached minutes to exhibit S, shows that the first accused offered the fixed and floating assets of his companies, MESS 25 Nig. Ltd and Beichkers Industries Ltd to the bank, in a bid to normalise the account in accordance c with “the bank’s laid down credit processes and procedures”. From the foregoing, I find as a fact that the first accused knew that the “cheque purchase” facility he enjoyed from the Umuahia Main Branch of A.C.B. was unauthorised d and I so hold. The issue for determination now is, whether there was an agreement between the first and second accused persons to grant credit facilities to MESS 25 Nig. Ltd, a company e owned by the first accused. The prosecution must prove such an agreement to sustain a charge of conspiracy. The issue of whether the unauthorised facility was granted fraudulently will be addressed later in this judgment. f I have no doubts in my mind, that there was an agreement between the first and second accused persons to grant credit to MESS 25 Nig. Ltd, and I so hold. The first accused did not just walk into the Umuahia Main Branch of A.C.B. and g collect N81.5million belonging to A.C.B, he must have had the assistance of the bank staff to accomplish that feat. He has not denied that he received money from A.C.B. He had no denied that the money he received was with the approval h of the second accused. His defence that he did not know that the facility was unauthorised is not an excuse. In Clark v. The State (1986) 4 N.W.L.R. (Part 35) 381, the Court held that:– i “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 it unlawfulness.” (Italics mine.) j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 563 a In any event, 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 b premeditated common intention and a common purpose. This is because the crime of conspiracy is usually hatched with utmost secrecy and the law recognises the facts that in such a situation, it might not always be easy to lead direct and distinct evidence. See Gbadamosi v. The State (1991) 6 c N.W.L.R. (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) N.S.C.C. 257. A conspiracy can d then be inferred from the facts of doing things towards a common end, where there is no direct evidence in support of an agreement between the accused persons. Now, the case against the fourth accused person who was e the accountant of the branch, is that he also granted MESS 25 Nig. Ltd credit facilities by purchasing some of the cheques in question. PW2 had explained in his evidence that they recovered some of the missing/intercepted cheques dur- f ing their investigations. The recovered cheques were admitted in evidence as exhibits 11–19, 18 tellers in respect of the recovered cheques were admitted as exhibits J1–J18 and 3 bundles of tellers relating to the account from February, to g October, were also admitted as exhibits L1 to L3. The al- phabets “CP” indicating “cheque purchase” were written in red ink and initiated in red also by the officer who approved the cheque purchase, on all of exhibits J1–J18, and on some of the tellers in exhibits L1–L3. h PW3, a former staff of the same branch who was arrested with the accused person and even gave evidence for the prosecution while still in detention, identified the signature of the fourth accused on exhibits J1–J18 and L1–L3. During i cross-examination by Mr Amechi, he explained that the second and fourth accused persons are a signatories to the account, which he said mean that they are Senior Staff of the branch and can be presumed to take action on behalf of the j branch. Under cross-examination by Mr Abubakar, the sixth [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 564 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. accused who testified as DW2, identified the signature of the a second accused in exhibits J16 and J17 as the officer of the bank who “purchased the cheques”, and he also identified the signature of the fourth accused as the officer who “pur- b chased the cheques” in exhibits J1–J15 and J18. I have examined the exhibits in question and as learned Counsel for the prosecution pointed out, in exhibits L1–L3, most of the exhibits date from July 20th, October were also c signed by the fourth accused. I therefore agree with him that the fourth accused must be part and parcel of the conspiracy for the same reasons stated above, and I also hold. As part of the conspiracy, the sixth accused is alleged to d have suppressed cheques which should have gone for clearance. Mr Na-Allah submitted that there was no evidence brought by the prosecution to show that by virtue of the position of the sixth accused in the bank, he could grant or fa- e cilitate the grant of credit facility. His contention is that with the sixth accused person’s position or standing in the branch, he does not have the power and therefore lacks the capacity to grant credit facility, that there is no evidence to show that f the sixth accused, even though he had no power to grant credit facility, could facilitate the grant of credit facility. He referred the Tribunal to the decision of the court in Clark v. The State (supra), that it is necessary that there should be g criminal purpose common to all the conspirators, to constitute the offence of conspiracy. There is no doubt, that the criminal purpose common to all the conspirators, is the unauthorised grant of credit facilities h to MESS 25 Nig. Ltd. The case against the sixth accused is that the Inspectors found concealed in his drawer, four cheques totalling N3.7million from C.C.B. Nkwere which had been drawn and paid into the account of MESS 25, and i which were supposed to have left for clearing. The sixth accused is not denying the fact that he kept the cheques in his drawers, but he gave two reasons for his failure to send the cheques for clearance. In his evidence as DW2, he said on that day he was busy with the Inspectors and secondly, due j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 565 a to a retrenchment exercise in the branch, he was saddled with attending to two other schedules in addition to his normal duties and therefore did not have the time to schedule b the cheques for clearance. In exhibit Q2, his statement to the police, the sixth accused stated the same defence, that the cheques for N3.7million were not suppressed but were merely delayed because of the c workload in the branch. In exhibit Q2, he described the situation as follows:– “When you are left with so many work to handle, there are bound to be mistakes. What actually happened was a mistake, which I d explained to the Inspectors . . . So I kept the cheques in my drawer to be taken to Owerri the next day. And when the Inspectors noticed this, they now said I suppressed the cheques forgetting they were the people who were disturbing me the other day. You need to see these Inspectors when they come to the branches. They are e demy gods (sic). They will push you this way and that way not allowing you to do your normal jobs in the office. That was what happened in the case of suppression of cheques.” I believe there is some merit to the defence of the sixth ac- f cused that he was overworked and therefore delayed sending the cheques for clearance, but in the circumstances of this case, I find I cannot accept it. The law is clear that a person may involve himself in the offence of conspiracy by his g mere assent to and encouragement of the design, although nothing may have been assigned to or intended to be executed by him personally. Thus, it need not be intended that all the conspirators should take part in the office as princi- h pals in the first and second degree. See Erim v. The State (supra). The case for the prosecution is that massive fraud had been carried out on the account of MESS 25 Nig. Ltd through the i collaboration of some of the bank staff. According to PW2, some of the cheques with which the first accused had collected N24million were missing or intercepted as evidenced in exhibits K and V, while some others were deliberately j suppressed from going for clearance. There is evidence [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 566 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. before the court, that a bank may suffer adverse conse- a quences when a cheque is delayed from going for clearance. The sixth accused himself explained the effect such an action could have on a bank. While being cross-examined by b Mr Abubakar, the sixth accused as DW2 replied:– “The only difference with a purchased cheque is that the customer is given value the same day he presents the cheque. So if the purchased cheque is returned unpaid, such a customer’s account will c be debited. If for any reason, either missing, intercepted, or delayed, the purchased cheque is not returned during the days for clearance, the customer’s account will remain in credit. So it is important that the cheque should be sent out within such a time as to accommodate the clearance date if it is to be returned. If a d cheque is delayed in being sent for clearance, or is lost in transit or is intercepted, then the person paying in the cheque benefits, while the bank loses.” (Italics mine.) PW2 testified that they found four cheques from C.C.B. e Nkwere which were supposed to have left for clearing in the drawers of the sixth accused person. He did not mention any other cheques found in the drawers of the sixth accused apart from the four aforesaid cheques. The sixth accused did f not deny that for C.C.B. Nkwere cheques were found in his drawers but under cross-examination, he denied that the cheques dated 25th June 1994 and 28th September 1994 were amongst those found in his drawers. He did not mention, either in his evidence in chief or during cross- g examination, that any other cheques apart from that of C.C.B. Nkwere were found in his drawer. It was only during his address, that Mr Na-Allah raised the issue that other cheques apart from the four were found in the drawers of the h sixth accused. The evidence before the Tribunal is that only four cheques from C.C.B. Nkwere which had been drawn and paid into the account of MESS 25, and which were supposed to have i left for clearing, were found in the drawers of the sixth accused. PW2 was not cross-examined on the issue of the number of cheques found in the drawers of the sixth accused person, and it is trite law that in all criminal trials, the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 567 a defence must challenge all the evidence it wishes to dispute by cross-examination. This is the only way to attack any evidence lawfully admitted at the trial. See Okosi v. The State b (1989) 1 N.W.L.R. (Part 100) 642, where the Supreme Court held that, a witness should be cross-examined to elucidate facts disputed, for it is late at the close of the case to attempt to negate what was left unchallenged. c The question that arises, if the sixth accused was so overworked and therefore delayed sending the cheques for clearance in time, why was it only the four C.C.B. Nkwere cheques in respect of MESS 25 account that was found in his d drawer? Why were cheques of other customers scheduled for clearance not found in his drawers? The first accused or MESS 25 Nig. Ltd cannot be the only customer of the Umua- hia Main Branch of A.C.B. I believe I can take judicial notice of the fact that other cheques must have come in the week or e that day, and which had to go to Owerri for clearance. There is evidence before the Tribunal which the sixth accused admitted, that he took over as Up Country Clearing Cheque Supervisor from the later part of July. There is evi- f dence that cheques in exhibits 11–19, some of which are dated 25th June 1994 were still hanging during his tenure, and under cross-examination he admitted that he was there when the cheque dated the 28th September 1994 was pre- g sented for clearance, but that cheque was one of those found in his drawers. I therefore find that the sixth accused was involved in the conspiracy, as his act of delaying cheques which were to go h for clearance, had the effect of facilitating the grant of unauthorised credit facility to MESS 25 Nig. Ltd in a fraudulent manner. After all, as Mr Abubakar rightly pointed out, it cannot be that the sixth accused did not have knowledge of i the consequences of his action as a clearing supervisor. He testified that in the situation of this case, the customer benefits while the bank loses money. This now brings us to the issue of whether there was fraud j involved in the grant of the unauthorised credit facility to [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 568 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

MESS 25 Nig. Ltd. On this issue, Mr Amechi contended that a the evidence that some cheques were suppressed and some cheques covered by the tellers in exhibits J1 to J18 were missing or intercepted did not directly link the first accused b with these acts because he is not a staff of the bank and for him to be so linked, there should be direct evidence of what part he played. He submitted that even if the cheques covered by exhibits J1 to J18 were missing, the Tribunal should c find that no fraud was practiced thereby. At this stage, it is necessary to critically examine the evidence before the Tribunal in coming to a decision as to whether the accused persons conspired to fraudulently grant d unauthorised credit facilities to MESS 25 Nig. Ltd. This is because a decision on this issue will determine the charge of stealing hanging against the first accused person. The Supreme Court has judicially interpreted conspiracy to e mean the followings:– (a) Where the conspirators directly communicate with each other at a particular place and time and enter into an agreement with a common design. f (b) Where there is a person who is the hub around whom the others revolve like a centre of a circle and the circumfer- ence. (c) Where, for instance, a person communicates with A, then A g with B and B with C which is a chain conspiracy see Oyediran v. The Federal Republic (1967) N.M.L.R. 122, Daboh and others v. The State (1977) 5 S.C. 171 and Njov- ens and others v. The State (1977) (supra). h In this case, the first accused is evidently the hub around whom the second, fourth and sixth accused persons re- volved. I have examined the relevant exhibits. Exhibits B1 to B17 are the ledger cards in respect of account no. 0723 in the name of MESS 25 Nig. Ltd. In exhibit A, is a special i resolution of MESS 25 Nig. Ltd showing that the Director of MESS 25 Nig. Ltd approved that the first accused shall be the sole signatory to the account, and the signature card for account no. 0723 has the photograph of the first accused and j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 569 a “sole signatory” written on the top in red ink. In exhibit Q1, the first accused admitted he was the sole signatory to the account no. 0723 with the Umuahia Main Branch of A.C.B. b The first accused also admitted that he opened an account with C.C.B. Nkwere in his name. He disputed the fact that exhibits U P1 to U P17 are the statements of his account with C.C. Nkwere, but I have made a finding that they are. c Exhibits 14–19 are uncleared marked “UE/Represent”. Exhibits J1–J18, are the tellers of A.C.B. Umuahia Main Branch marked “CP”, indicating that C.C.B. Nkwere cheques which were paid into account no. 0723 and credited d to MESS 25 Nig. Ltd, a company in which the first accused is a sole signatory, were purchased by the second and fourth accused persons. There is evidence that about N24million could not be accounted for, either at A.C.B. Umuahia Main e Branch nor at C.C.B. Nkwere. The evidence also shows that the Inspectors took reconciliation statement from the first accused in respect of the missing cheques, that is, he brought his cheque stubs and they reconciled the outstanding. The f first accused admitted he signed the reconciliation statement, exhibit K. There is also evidence that some of the cheques were not sent for clearance in time and the effect of a delay in clearance is that the customer’s account will remain in g credit and the payee will benefit while the bank losses. In relation to exhibit K, Mr Amechi urged the court to hold that the act by the first accused of bringing out his dockets willingly upon request and cross-checked with the Inspec- h tors, is not the act of a criminal whose intention is to destroy evidence of the fact that he took money, but if anything, the Tribunal should hold it in his favour that he knows nothing about. I do not agree with that line of argument, on the con- i trary, I believe that piece of evidence points to the probability that account No. 0723 with the Umuahia Main Branch of A.C.B. was being run fraudulently. In the first place, even from his own account of what hap- j pened, the first accused did not bring out his dockets for [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 570 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. reconciliation until he was informed that some of his a cheques were returned unpaid and that there was trouble in A.C.B. As I said earlier, if the account had been properly maintained, there would have been no need for the first ac- b cused to bring his cheque stubs to reconcile which cheque was missing or not. It would have been understandable if it was the other way round, and it was the bank staff who took the money from account No. 0723 without the knowledge of c the first accused. But in this case, the first accused was the beneficiary of the account, and he has not denied that he collected N81.5million from the Umuahia Main Branch of A.C.B. with the use of unauthorised credit facilities. d Mr Amechi has also argued that there can be no fraud because the first accused was paying interest on the facility, but he has missed the point completely. The evidence before the Tribunal, is that A.C.B. was not aware of the transaction, e it was not until the Inspectors came that it was discovered that the first accused was enjoying an authorised credit facility, and worse still, they discovered that some of the cheques used in the transaction were either missing, intercepted or f suppressed. The cheques in exhibit K had been credited to the account of the first accused and he took value prior to the arrival of the Inspectors, it was after the inspection that they were entered in exhibit B1 to B17 as debits and this g was done on the 16th January, 1995 and it is so reflected on the exhibits. There can be no better illustration of the use to which the first accused put the account with A.C.B. Umuahia Main h Branch and C.C.B. Nkwere than in his replies to questions put to him during cross-examination by the prosecution. He replied the question thus:– “In exhibits B1–B17 on 25th March, 1994, there is a C.C.B. i Nkwere cheque for N1.7million issued by me. I did say that I had money in my account in C.C.B. Nkwere any time I issued a cheque to A.C.B. But exhibits U P1 to U P7 which is not my statements of account contained no amount any where near N1.7million from 22nd to 28th March, 1994. On the 18th March, j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 571 a 1994, I saw 4 cheques from MESS 25 paid into the said account but it is not my account. On the 12th of April, the credit was N3.5million from A.C.B. Umuahia in exhibit UP. On the 5th April a cheque for N3.5million was debited from my A.C.B. Umuahia b account. I told you that they purchase my cheques. Yes, 4 C.C.B. Nkwere cheques were purchased on that day. But it is not true that it was to enable the N3.5million to be raised to be paid into C.C.B. Nkwere because when they purchase cheques, I collect cash. Yes c on that day, I collected N3.5million in cash even though I said I did not like dealing with cash.” (Italics mine.) In addition to this, the transactions in exhibits J1 to J18, which are tellers in respect of the missing/intercepted d cheques, show the alarming rate at which C.C.B. Nkwere cheques were purchased at the instance of the first accused at the Umuahia Main Branch of A.C.B., for example, on the 27th of July, 1994, alone, the following C.C.B. Nkwere e cheques were purchased: N1,850,000 with cheques Nos. 387097 and 387094 and N1,800,000 with cheques Nos. 353266 and 353253 and N1,800,000 with cheques Nos. 353278 and 353273. f Other transactions of “cheque purchase” of C.C.B. Nkwere cheques shown in exhibits J1–J18 are N850,000 on 25th July, 1994; N900,000 on 29th July, 1994; N1,850,000 on 24th August, 1994; N1,820,00 on 26th August, 1994; g N1,450,000 on 26th August, 1994; N800,000 on 31st Au- gust, 1994, N1,800,000 on 15th September, 1994; N1,800,000 on 15th September, 1994; N900,000 on 15th September, 1994; N1,800,000 on 17th August, 1994; h N950,000 on 13th September, 1994; N1,550,000 on 30th August, 1994; N200,000 on 27th April, 1994; N800,000 on 17th May, 1994 and N400,000 on 29th July, 1994. In the case of Erim v. The State (supra), in dismissing the i appeal of the appellant, the Supreme Court as per Og- wuegbu, JSC said at page 538:– “Proof of conspiracy is generally a matter of influence and inference of involvement of the appellant can be inferred from all col- j lateral circumstance. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 572 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Most of the transactions is respect of the account were handled di- a rectly by the appellant who would then delegate the appropriate subordinate officers to take one action or the other. There was also undue haste in the withdrawals. The sum of N200,000 was withdrawn within 24 hours of the arrival of the mail transfer and within b 4 days the balance of the mail transfer was also drawn . . . The evidence against the appellant was overwhelming. Without his assistance, the crime could not have been committed.” In the instant case, I am satisfied from the totality of the evi- c dence before me that the prosecution has established the case against the first, second, fourth and sixth accused persons and proved beyond reasonable doubt that the accused persons conspired to fraudulently grant credit facilities to d MESS 25 Nig. Ltd without lawful authority. I therefore find the first, second, fourth and sixth accused persons guilty of the offence as charged and convict them accordingly. The first, second, fourth and sixth accused persons are also e charged in Count 3 with conspiracy to fraudulently grant credit facilities to MESS 25 Nig. Ltd without any security or collateral. There is no evidence before the Tribunal that the facility enjoyed by the first accused with the Umuahia Main f Branch of A.C.B. is one in which adequate security is required before the facility is granted. Section 18(1)(b) clearly provides that no manager or any other officer of a bank “shall grant any advance, loan or credit facility to any per- g son, unless it is authorised in accordance with the rules and regulations of the bank; and where adequate security is required by such rules and regulations, such security shall, prior to the grant be obtained for the advance, loan or credit h facility and shall be with the bank.” (Italics mine.) It is the duty of the prosecution to prove its case beyond reasonable doubt and a general burden to rebut the presumption of innocence constitutionally guaranteed to the citizen. i The burden on the prosecution is only discharged when the essential ingredients of the offence charged have been established and the accused is unable to bring himself within the defences or exceptions allowed under the law generally or j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 573 a the statute creating the offence, see Okoro v. State (1985) 5 N.W.L.R. (Part 94) 255. A charge is prove by calling evidence. The sole object and end is to ascertain the truth of a b disputed fact or several disputed facts or in ornate legal phraseology “to resolve points” See Oteki v. The State (1986) 2 N.W.L.R. (Part 24) 648. This count on the charge has not been proved and it must c fail. Consequently, I find the first, second, fourth and sixth accused persons guilty of the offences as charged and discharged and acquit them accordingly. The second, fourth and sixth accused persons are also d charged in Count 4 with the substantive offence of granting credit facilities to MESS Nig. Ltd. It is established fact in this case that the second and fourth accused persons are management staff of the Umuahia Main Branch of A.C.B. e and that they did in fact grant credit facilities to MESS 25 Nig. Ltd without lawful authority. I am satisfied that the prosecution have proved the case against the second and fourth accused persons on this count beyond reasonable doubt. Consequently, I find the second and fourth accused f persons guilty of the offence as charged and convict them accordingly. In respect of the sixth accused person, I agree with Na- Allah that by virtue of his position in the bank, the sixth ac- g cused does not have power to grant credit facilities and there is no evidence before the Tribunal that he granted credit facility to MESS 25 Nig. Ltd. The evidence of PW2 and PW3 is to the effect that the second and fourth accused persons h are “A signatories” and therefore management staff of the bank. The sixth accused person is a supervisor, and in exhibit Q2, his statement to the police, he stated that he was a “B signatory”. I therefore hold that the prosecution have i failed to prove the case against the sixth accused person on this account. Consequently, I find him not guilty of the offence as charged and discharge and acquit him accordingly. Having dealt with the counts on conspiracy, let us now re- j visit the charge of stealing alleged against the first accused. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 574 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

In his address on behalf of the first accused, Mr Amechi a raised the issue of lack of proof of the exact amount of money alleged to have been stolen. He referred the Tribunal to the Court of Appeal in Onagoruwa v. The State (supra), b and submitted that the sum stolen on a charge of stealing must be proved by the exact sum. Mr Abdullahi on the other hand, referred the Tribunal to the decision of the Supreme Court in Atano v. A.G. Bendel c (1988) 2 N.W.L.R. (Part 75) 201 who where the court held that it is not necessary for the prosecution to prove that all the articles mentioned in the information have been stolen for a charge of stealing to be sustained. d In that case of Atano v. A.G. Bendel (supra), Agabaje, JSC (as he then was) stated thus:– “It is noteworthy that although the Court of Appeal acquitted the appellant on the count of stealing yet it found that the appellants e stole part of the money alleged to have been stolen by them. I must confess that I cannot see the true or proper basis for the acquittal or discharge of the appellants by the Court of Appeal on the count of stealing. Even if it is only established that the prosecution f proved that the appellants stole part of the money alleged to have been stolen by them . . . that will not be valid ground for setting aside the conviction of the appellants on the count of stealing. It is trite law, that it is unnecessary for the prosecution to prove that all the articles mentioned in the information have been stolen for the g charge to be sustained. The charge will be sustained if it is proved that some of the articles have been stolen. It is only when considering the sentences to be imposed that attention may be drawn to the effect that it has not been proved that all the things mentioned in the information have been stolen by the appellants.” h In any event, the accused himself admitted in exhibit G, that he owed A.C.B. N7.5 Million Naira, after the reconciliation in exhibit K, and the account was debited in terms of exhibit K, the first accused admitted in exhibit S, that he i was indebted to A.C.B. to the tune of N34.3 Million In exhibit Q1, the first accused admitted that the second accused gave them N81.5 Million and he paid back N53 Million. In his evidence as DW1, the first accused claimed that the j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 575 a police advised him on what to write in exhibit S, and it was brought to him for signature and he signed. But, he admitted he attached the minutes of the meeting he had with the man- b agement of A.C.B. to exhibit S, and in the attached minutes, he maintained that his indebtedness to the bank arose from unauthorised lendings, which were not properly documented and formalised. DW1 also claimed that the N81.5 Million he admitted in exhibit Q1, was a figure to F.I.I.B. by A.C.B. c and the N53 Million he admitted he paid back, was also what A.C.B were saying, as it was not based on ledger. It is an established principle of law that where there is oral as well as documentary evidence, documentary evidence d should be used as a hanger from which to assess oral testimony. See Kimdey v. Military Governor, Gongola State (1988) 2 N.W.L.R. (Part 77) 445 and Umoru v. Oduogbo (1993) 6 N.W.L.R. (Part 298) 217. Exhibits Q1, K and S e form part of the case for the prosecution, it supports the case for the prosecution and I am satisfied that it also strengthens the case for the prosecution. The oral testimony of the first accused as DW1 is obviously, inconsistent with the docu- f mentary evidence before the Tribunal. I therefore cannot accept the evidence of the first accused in his defence as I find I cannot believe him. Be that as it may, the prosecution must prove beyond rea- g sonable doubt that the first accused stole the money fraudulently granted through unauthorised credit facility to MESS 25 Nig. Ltd. A person who fraudulently takes anything capable of being stolen, or fraudulently converts to his own h use or to the use of any other person anything capable of being stolen, is said to steal that thing. See: section 383(1) of Criminal Code. As Mr Amechi rightly submitted, for any person to steal money under section 390(9) of the Criminal Code, under which the first accused is charged, he must i have done so with the intent as spelt out in section 383(2)(f ) of the Criminal Code. The subsection reads:– “In the case of money, an intent to use it at will of the person who takes or converts it, although he may intend afterwards to repay j the amount to the owner.” [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 576 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

I have no doubt whatsoever that the answer to that question, a which is evident in exhibit Q1, is in the affirmative. In his statement to the police, exhibit Q1, the first accused explained that it was when he wanted to set up a distillery fac- b tory in Nkwere in 1993, that he applied for the facility. He further stated as follows:– “Mr Ugochukwu Duru, (second accused) now started helping us in April, 1994. I operated this account between and October, 1994. c He was giving us money hence we were using it for different businesses, both importation, transportation and the factory. We were also paying back immediately. Between April and October, 1994, Mr Ugochukwu Duru (second accused) gave us N81.4 Million. We did pay back N53 Million before the Inspectors came in Octo- d ber, 1994.” It is clear from the totality of the evidence before the Tribu- nal that, when the first accused received N81.4 Million from Umuahia Main Branch of A.C.B, the money did not belong e to him, he was not lawfully entitled to the money as the credit facility was unauthorised, the money was siphoned from A.C.B. through fraudulent means which he was aware of and even though he intended to pay back the money to the f bank as he did with N53 Million, he admitted he used the money at his own will for his different businesses importation, transportation and the distillery factory he set up in Nkwere. The irresistible inference from all the above facts, g and the only conclusion that can be arrived at, is that the first accused actually stole money belonging to A.C.B. and I so hold. I am satisfied that the prosecution have proved the offence of stealing charged against the first accused person, h beyond reasonable doubt. Consequently, I find the first accused person guilty of the offence of stealing, as charged in Count 1 and convict him accordingly. The fourth accused person is also charged in Count 5 with i the offence of stealing, “various sums of money totalling N224,239.25 property of the bank”. The case against the fourth accused is that the fourth accused took N224,239.25 from his account without the knowledge, or consent or j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 577 a authority of the bank. Two ledger cards in respect of his account were admitted in evidence through PW1 as exhibits D1 and D2 and 33 cheques drawn by the fourth accused on b his account were also admitted as exhibits F1–F33. On exhibit F33 are two signatories in red and blue. PW1 explained that the red signature is the authorising signature, while the blue signature is the drawers signature. He identified the red and blue signatures as belonging to the fourth accused and c testified that the fourth accused drew two cheques and authorised payments himself. PW1 also pointed out that as at 10th October, 1994, the entry on exhibit D2 showed a debit balance of N224,239.25 in the account of the fourth d accused. PW1 further testified that the records of the bank, show no approval to the fourth accused to draw such overdraft from his account. PW3 also identified the signature of the fourth e accused on exhibits F1–F33 and pointed out that the fourth accused drew the cheques in blue and authorised payments of same in red. The sixth accused as DW2 also pointed out that exhibit DW2 a debit balance of N224,239.25 and that f exhibits F1–F33 also shows that the fourth accused was drawing the cheques, approving them and collecting money on them. His conclusion was that the fourth accused was taking the bank’s money not belonging to him and exhibits g F1–F33 showed he was the authority for taking the money. In respect of the evidence of the sixth accused as DW2, Mr Abubakar submitted that his evidence is admissible against any other co-accused without any legal qualification as pro- h vided for under section 23 of Decree No. 18 of 1994. I agree with him, section 23(1) of Decree No. 18 of 1994 provides that “Notwithstanding anything to the country in any law, no witness shall, in any trial under this Decree, be presumed to i be unworthy of credit by reason only that he took part in the commission of offence.” (Italics mine.) The fourth accused was not present at the trial, and has no defence before the Tribunal. There is no evidence in his de- j fence. The effect therefore, is that the evidence adduced by [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 578 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. the prosecution remained unchallenged and uncontradicted a and it is settled law that a piece of evidence which is either unchallenged or uncontradicted will be accepted as proof of a fact it seeks to establish, even in criminal cases: See b Nwede v. The State (1985) 3 N.W.L.R. (Part 13) 444; Eze v. The State (1985) 3 N.W.L.R. (Part 13) 429. I therefore hold that the prosecution has proved its case against the fourth accused person beyond reasonable doubt. Consequently, I find the fourth accused person guilty of the offence of steal- c ing, as charged in Count 5, and convict him accordingly. Now Counts 7 to 18 of the charge relate to the offences under the Dishonoured Cheques (Offences) Act. Section d 1(1) of the Dishonoured Cheques (Offences) Act provides:– “1(1) Any person who (a) obtains or induces the delivery of anything capable of being stolen either by himself or to any other person; or e (b) obtains credit for himself or any other person, 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 f the bank on which the cheque was drawn, shall be guilty of an offence . . .” On Counts 7 to 18, Mr Amechi submitted that the prosecution must prove:– g 1. That the accused issued the cheques; 2. That the cheques were issued within 3 months; 3. That the cheques were dishonoured; and h 4. That the reason for dishonouring the cheques was that the accused had no money in his account at the time of presentation of the cheques. He further submitted that the first ingredient is not in issue, i but on the second, that there was no direct evidence by any of the prosecution witnesses that these cheques were presented within three months. On the third, Mr Amechi submitted that there is no evidence at all that the cheques were j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 579 a dishonoured. He argued that PW1 to PW3 agreed that once a cheque is written “represent”, it does not necessarily meant that the person has no money in his account. On the fourth b element, he submitted that there was no reason adduced by the prosecution, why exhibits 11 to 19 were returned with “represent” on it. He argued that it is the duty of prosecution to show that the c first accused had no money in the account by the time the cheques were presented at C.C.B. Nkwere which is the paying bank. He contended that the prosecution had to adduce direct evidence showing that there was no money in that ac- d count and that none of the witnesses went to the Nkwere branch, not even the IPO. Mr Amechi further argued that PW2 under cross- examination said, it was Chief Adiele who was not called as e a witness that went to Nkwere and that even then, Chief Adiele merely saw that only N41Million had been paid in the account and not that Chief Adiele said that the first accused had no money in the account. He further submitted f that the cheques involved in Counts 11, 12 and 13 of the charge were returned either as bounced or represent and that the court cannot speculate. He cited the case of Yau v. B.O.N. Ltd (1994) 1 N.W.L.R. (Part 321) 461, in support of g his submission that the prosecution must prove “dishonoured” according to law. He argued further, that there is no evidence by the prosecution that the attention of the first accused was drawn to any h of the cheques they are alleging were dishonoured. He submitted that where the prosecution failed to give direct evidence as to the balance of accused in C.C.B. Nkwere at the time of presentation of the cheques, then the court will hold i in favour of the accused, that he had money in the account. To buttress this, he cited the case of Namseh v. The State (1993) 6 S.C.N.J. (Part 1) 55; Buba v. The State (1991) 1 S.C.N.J. (Part 3) 472 and The State v. Aje (1989) 1 L.R.N. j 281. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 580 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

On his own part, Mr Abubakar submitted that the only is- a sue for determination to complete the offence, is whether the first accused had funds to back up the cheques. He argued that the first accused relied on words that he had money in b his account, but that the prosecution relies on the evidence of PW2 and exhibits UP1 to UP7. He further submitted that the evidence before the Tribunal shows that the first accused started his accounts as A.C.B. Umuahia with his C.C.B. Nkwere cheques and then takes a draft from A.C.B. Umua- c hia which he pays into C.C.B. Nkwere, and when the draft matures, some of the money goes to Beichkers Industries, some to the first accused himself and some of the lucky ones that now arrive Umuahia will be cleared and they go back as d paid. He therefore submitted that not only did the first accused received credit on the basis of his cheques, which were returned unpaid, he did so knowing that he had no funds to back the cheques. He therefore urged the Tribunal e to find the first accused guilty as charged. To start with, I agree with Mr Amechi that the first accused be discharged and acquitted on Counts 11, 12 and 13 because the cheques are not in evidence and the Tribunal can- f not speculate that they were dishonoured cheques. I therefore find the first accused not guilty of the offences as charged in Counts 11, 12 and 13 and he is therefore discharged and acquitted on those counts. g Now exhibits 11 to 19 are all marked “represent”. PW2 testified that they discovered the fraud when they found suppressed cheques and sent them for clearing, but they returned unpaid and while they were there more of the cheques h were brought back unpaid, even though money had been released. He also gave evidence of the role the second, fourth and sixth accused persons played in the conspiracy to defraud the bank, including the role played by the contra waste offi- i cer, Mrs Nwachukwu. He indicated the contra waste officer listed as the seventh accused on the charge sheet but who is not on trial here, as she is said to be merely at large. PW2 said she was receiving the cheques and wasting them without authority and explained that before cheques are posted as credit j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Federal Republic of Nigeria v. Mr Obed Chika Ugwuadu 581 a to the customers account, they are normally wasted in the contra waste but with the authority of the branch manager. He said the bank manager’s signature must be on the teller but b that the contra waste officer was wasting the cheques without the branch manager’s authority and that her action therefore contributed largely to the success of the fraud. Furthermore, that she ought to have sent caution letters on the cheques to the drawee bank C.C.B. Nkwere but she did not do so she c was indicted as a collaborator to the fraud. I have critically examined exhibits B1–B17 and exhibits U P1 to U P7 and taking into consideration my findings on the d charge of conspiracy and stealing. I agree with Mr Abua- bakar that the first accused received credit on the basis of the cheques which were returned unpaid, and that he did so knowing he had no funds to back the cheques. e In any case, he did not attempt to show that he believed the cheques would be honoured when presented which is a defence open to him under section 1(3) of the Dishonoured Cheques (Offences) Act. That section reads as follows:– f “A person shall not be guilty of an offence under this section if he proves to the satisfaction of the court that when he issued the cheque he had reasonable grounds for believing, and did believe in fact, that it would be honoured if presented for payment within the g period specified in subsection (1) of this section.” I am satisfied that the prosecution have proved the case against the first accused person on Counts 7, 8, 9, 10, 14, 15, 16, 17 and 18 beyond reasonable doubts. Consequently, I find h the first accused person guilty of the offence as charged under the afore mentioned counts and convict him accordingly. That first accused is convicted in Count 1 for the offence of Stealing, convicted in Count 2 for conspiracy, discharge i and acquitted in Count 3 for conspiracy, discharged and acquitted in Counts 11, 12 and 13 for offences under the Dis- honoured Cheques (Offences) Act and convicted in counts 7, 8, 9, 10, 14, 15, 16, 17 and 18 for offences under the Dis- j honoured Cheques (Offences) Act. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 582 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The second accused is convicted in Count 2 for the offence a of conspiracy, discharge and acquitted on Count 3 for the offence of conspiracy, and convicted in Count 4 for the offence of granting credit without lawful authority. b The fourth accused is convicted in Count 2 for the offence of conspiracy, discharged and acquitted on Count 3 for the offence of conspiracy, convicted in Count 4 for the offence of granting credit facility without lawful authority and con- c victed in Count 5 for the offence of stealing. The sixth accused is convicted in Count 2 for the offence of conspiracy, discharge and acquitted on Count 3 for the offence of conspiracy, and discharge and acquitted on Count d 4 for the offence of granting credit facility without lawful authority. That is the judgment of this Tribunal. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Nigeria Deposit Ins Corp v. Crossland Finance and Investment Ltd 583 a Nigeria Deposit Insurance Corporation v. Crossland Finance and Investment Limited b and Others FAILED BANKS TRIBUNAL, ZONE V, LAGOS AUGIE J Date of Judgment: 28 NOVEMBER 1996 Suit No.: FBFMT/L/ZV/11/96 c Failed Banks Tribunal – Application for recovery of debt – Contents thereof section 11(1) and (2) Failed Banks Decree No. 18 of 1994 (as amended) – Application for recovery of d debt – Pleading security pledged – Rationale – Stating the name and address of the shareholders, directors etc of debtor company – Whether useful – Section 15(5) Failed Banks Decree No. 18 of 1994 (as amended) – Joinder of Shareholders, Directors, Proprietors, or Partners of an in- e debted Company in an application for recovery of debts before the Failed Banks Tribunal – Whether contemplated by section 11(1) and (2) Failed Banks Decree No. 18 of 1994 (as amended) f Facts The second respondent filed an application before the Tri- bunal seeking an order striking out his name from the suit as g a respondent on the grounds, inter alia, of misjoinder and that no cause of action is disclosed against him by the application for the recovery of debt. It was the contention of Counsel for the second respondent h that the first respondent is a corporate body with a distinct legal existence different from that of the second respondent, and that the Failed Banks Decree No. 18 of 1994 (as amended) has not removed this distinctiveness. He was of the view that section 11(2)(b) of the Decree is being miscon- i strued as removing the distinctiveness and argued that the provisions do not say that the shareholders should be made parties but rather that their names should be shown. Refer- ence was made to section 15 of the Failed Banks Decree No. j 18 of 1994 (as amended) that the Directors could come in [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

584 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. after the judgment of the Tribunal. Counsel urged the Tribu- a nal to strike out the second respondent on two grounds; that no cause of action had been shown in the application and secondly, that there was no specific allegation against him b apart from the fact that he was a director of the Company. Counsel for the applicant/respondent on the other hand, submitted that it was not in dispute that the second respondent was a director of the first respondent which was in- c debted to the applicant/respondent. It was contended that a Director did not have to be an executive to be liable for the debt of a Company. Counsel argued that since the Directors were likely to be d affected by the decision of the Tribunal in the levying of execution, it would be in the interest of the second respondent to come in at this stage and hear him so as to comply with the principle of “audi alteram partem”. It was in antici- e pation of this, that section 11(2) of the Failed Banks Decree No. 18 of 1994 (as amended) went ahead to lay the foundation by asking for the names and addresses of the Directors. Held – f 1. The details of security pledged is useful to the Tribunal and should be pleaded in an application for recovery of debt because section 13(1) and (2) of the Failed Banks Decree No. 18 of 1994 (as amended) provides that where g the debtor fails to repay all the outstanding loan and interest within the time specified then the Tribunal is empowered to “levy execution on all the properties of the debtor pledged as security for the loans.” h 2. If the borrower is a body corporate, the names and addresses of its shareholders, directors, proprietors or partners as the case may be, is also useful to the Tribunal because section 15(5) and (7) of the Decree provides i that, where the money obtained is not sufficient to offset the outstanding loan and interest, then the Tribunal is given powers “to levy execution on the other properties of the body corporate”. If that is still not sufficient to offset the outstanding loans and interest, the Tribunal is j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Nigeria Deposit Ins Corp v. Crossland Finance and Investment Ltd 585 a empowered, subject to section 290 of Companies and Allied Matters Act, 1990 to “levy execution on the personal properties of the directors of the body corporate” b etc., which shall be sold and applied in satisfaction of the outstanding debts. It must be noted that under Decree No. 18 of 1994, a “director includes wife, husband, father, mother, son or daughter of a director.” c 3. The expression “such other information as may be useful to the Tribunal”, in section 11(2)(e) of the Failed Banks Decree No. 18 of 1994 (as amended), indicates that the requirements of the name and address of the borrower in d section 11(2)(a) of the Failed Banks Decree No. 18 of 1994 (as amended); where the borrower is a body corporate, the names and addresses of its shareholders, directors, proprietors, or partners as the case may be, in sec- e tion 11(2)(b) of the Failed Banks Decree No. 18 of 1994 (as amended); the amounts of loan and advance outstanding in section 11(2)(c) of the Failed Banks Decree No. 18 of 1994 (as amended); and details of the securities pledged in section 11(2)(d), are merely information f in the application for recovery of debt, which will be useful to the Tribunal in the recovery of a debt owed to the applicant. It is also apparent from sections 12 and 13 of the Failed Banks Decree No. 18 of 1994 (as g amended), that the required information is useful to the Tribunal only after it makes an order for the payment of the loan and interest and the debtor fails to comply within the time specified in the order. h 4. It was not intended by the Failed Banks Decree No. 18 of 1994 (as amended) that any one connected with an indebted company, in whatever way, would be made parties at the commencement of an action for the recovery i of debt before the Tribunal, except of course, those were directly involved in incurring such debts and were in a position either as executive officers or management staff of the indebted company to ensure the repayments of the j debts and have been seen to have failed to do so. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

586 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

5. A cause of action means a factual situation the existence a of which entitles one person to obtain from the Court a remedy against another person. It is the act on the part of the defendant which gives the plaintiff his cause of com- b plaints. The law is that to find out what the cause of action in a claim is, one must look at the Writ of Summons and Statement of Claim and no more. In the instant case, the averments in the affidavit in support of the applica- c tion and the counter-affidavit are therefore irrelevant and unnecessary for the determination of the question whether there is any act on the part of the second respondent that gives rise to a cause of action. d Application granted and the name of the second respondent struck out.

Cases referred to in the judgment e Nigerian A.G. Fed v. Sode (1990) 1 N.W.L.R. (Part 128) 500 Adebowale v. Mil. Gov. of Ogun State (1995) 4 N.W.L.R f (Part 392) 733 Alese v. Aladetuyi (1995) 6 N.W.L.R. (Part 403) 527 Bello v. A.G. Oyo State (1986) 5 N.W.L.R. (Part 45) 828 g Ekpo v. Calabar LGA (1993) 3 N.W.L.R. (Part 281) 324 Ladoke v. Olabayo (1992) 8 N.W.L.R. (Part 261) 614 N.N.S.C. v. Alhaji Hamajoda Sabana Ltd (1988) 2 N.W.L.R. (Part 74) 23 at 58 h Obikoya and Sons Ltd v. Gov. Lagos State (1987) 1 N.W.L.R. (Part 50) 385 Onyeanusi v. Misc. Offences Tribunal (1995) 8 N.W.L.R. i (Part 415) 628 Sea Trucks (Nig) Ltd v. Pyne (1995) 6 N.W.L.R. (Part 400) 166 Tafida v. Abubakar (1992) 3 N.W.L.R (Part 230) 511 j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS)

Nigeria Deposit Ins Corp v. Crossland Finance and Investment Ltd 587 a Tikatore Press Ltd v. Umar (1968) 2 ALL N.L.R. 107 U.B.N. Ltd v. Odusote Bookstores (1995) 9 N.W.L.R. (Part 421) 558 b Nigerian statute referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malprac- tices in Bank Decree No. 18 of 1994 (as amended), sections c 11(1), 11(2)(a), (b), (c), (d), (e); 13(1), 13(2); 15(5); 15(7); 16(1); 16(2); Schedule 1 Rule 13

Nigerian rules of court referred to in the judgment d Federal High Court (Civil Procedure) Rules Cap 134 Laws of the Federation of Nigeria, 1990, Order IV Rules 3 and 5; Order X Rule 5(2) e Books referred to in the judgment Black’s Law Dictionary (5ed) Dictionary of Law by P.H. Collin f Counsel For the applicant/respondent: Mr Folarin Popoola For the respondent/applicant: Mr Osahon Ohuoba g Judgment AUGIE J: This is a motion on notice brought pursuant to Or- der X Rules 3 and 5, Order IV Rule 5(2) of the Federal High h Court (Civil Procedure) Rules and Schedule 1 Rule 13 of the Procedure for the Recovery of Debts at the Tribunal and the inherent jurisdiction of the Tribunal, praying this Tribunal for the following orders:– i 1. An order striking out the name of the second respondent (Dr Bode Olajumoke) from the suit as a respondent. 2. An order setting aside the order of the Honourable Tribunal dated 13th September, 1996 imposing the duty j of service of process upon the second respondent, and [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 588 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

setting aside of the service of Notice of Presentation a and all other processes in this suit on the first, third, fourth, fifth, sixth and seventh respondents by affixing same at the usual or last known abode or business of b the second respondent. 3. Alternatively to prayer 2 above, an order that the applicants shall pay to the second respondent his expenses of investigating the addresses of and services c on the first, third, fourth, fifth, sixth and seventh respondents. Grounds (i) Misjoinder of the second respondent. d (ii) No cause of action. (iii) The second respondent is not an agent of the first, third, fourth, fifth, sixth and seventh re- e spondents, nor a solicitor to the applicants. 4. Any other orders the Honourable Tribunal might deem fit to make in the circumstances. In his submissions in support of the application, Mr Folarin f Popoola, learned Counsel for the applicant/respondent referred the Tribunal to paragraphs 3 and 4 of the 16 paragraphs affidavit in support of the Motion on Notice which reads as follows:– g “3. I know as a fact that the involvement of the second respondent in the first respondent company was limited to decisions taken at the Board of Directors of the first respondent. 4. Dr Bode Olajumoke told me and I verily believe that at no h time, whether before or after the alleged indebtedness, did the applicant herein requested for or obtained a resolution of the Board of Directors of the first respondent before granting the alleged loan and or its utilisation.” Mr Popoola submitted that in spite of the counter-affidavit to i the application, the deposition in the averments above remained uncontroverted, and cited the case of Ladoke v. Ola- bayo (1992) 8 N.W.L.R. (Part 261) 614, to buttress his submission that it is incumbent on a party to deny clearly and j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Nigeria Deposit Ins Corp v. Crossland Finance and Investment Ltd 589 a specifically in his own affidavit positive statement of fact made by an adversary in an affidavit, otherwise those assertions will be deemed as admitted and no longer in contro- b versy. He urged the Tribunal to hold that the averments in paragraphs 3 and 4 of the affidavit in support are deemed admitted and argued that the first respondent is a corporate body c with a distinct legal existence different from that of the second respondent, and that the Failed Banks Decree No. 18 of 1994, has not removed this distinctiveness. He was of the view that section 11(2)(b) of the Decree is being miscon- d strued as removing the distinctiveness and argued that the provision does not say that the shareholders should be made parties but rather that their names should be shown. Mr Popoola pointed to the specimen of the application e “Form A” and submitted that if the lawmaker had wanted shareholders to be parties at the very commencement of the process, it would have said so specifically. He argued that in “Form A”, it can be seen that where the names of Directors f and Shareholders are to be shown comes in after the column for parties. He further submitted that the Tribunal should not stretch the meaning of section 11(2) of the Decree beyond its least onerous meaning, and urged the Tribunal to con- g strue the words of the Decree strictly instead of giving a generous construction to things that were not said by the Decree. He referred the Tribunal to the case of Obikoya and Sons Ltd v. Gov. Lagos State (1987) 1 N.W.L.R. (Part 50) h 385, in support of his submissions. Mr Popoola also referred to sections 15 and 16 of Decree No. 18 of 1994, particularly section 16, for his contention that the Directors can come in after the judgment of the Tri- i bunal. He further submitted that where the Decree has taken care of any principle, then that principle is dead that says to the contrary. He therefore argued that before anybody can be dragged to the Tribunal, there must be an allegation or a j complaint otherwise called a cause of action against such a [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 590 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. person, and where there is no cause of action or a reasonable a cause of action, the suit is either struck out or that party is struck out. He cited the case of Tikatore Press Ltd v. M.N.A. Umar (1968) 2 All N.L.R. 107, in support of his arguments b on this issue. On the basis of that, Mr Popoola urged the Tribunal to strike out the second respondent on two grounds, that no cause of action has been shown in the application, and secondly, that there is no specific allegation against him c apart from the fact that he is a Director of the Company.

On his own part, Mr Osahon Ohuoba, learned Counsel for the respondent/applicant, urged the Tribunal to look at the essence of Decree No. 18 of 1994 and refuse the application. d He submitted that it is not in contention that the second respondent is a Director of the first respondent, and that it is also not in contention that the first respondent is owing the amount being claimed by the respondent/applicant. It is his e contention that a Director does not have to be an executive to be liable for the debt of a company. The essence of his submission, is that since the Directors are likely to be affected by the decision of the Tribunal in the levying of exe- f cution, then it would be in the interest of the second respondent to come in at this stage and hear him so as to comply with the principle of “audi alteram partem”. g Mr Ohuoba was of the view that it was in anticipation of this, that section 11(2) of Decree No. 18 of 1994 went ahead to lay the foundation by asking that name and addresses of the Directors be submitted. He argued that the applicant h cannot go after the Directors not named now, and submitted that the second respondent is a proper respondent to this action. He contended that the only way the Tribunal can contemplate striking out the second respondent, is if he is not a Director and that the second respondent is being i brought in now to avoid multiplicity of judgments. He further argued that the transaction in question was as a result of warehousing facility, which is lending of money from one bank to another, therefore even if the first respondent was j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Nigeria Deposit Ins Corp v. Crossland Finance and Investment Ltd 591 a not properly permitted by its Board, the Directors whether executive or not, will be held liable to third parties, so the second respondent at this stage cannot be removed from this b action. I have considered the arguments of learned Counsel, and I am of the view that the issue for determination is, whether the second respondent can be properly joined as a party to c this suit merely because he is a non-executive director/shareholder of the first respondent company who is being sued for a debt owed to Great Merchant Bank Ltd. The relevant provisions of Decree No. 18 of 1994 in the d determination of this issue are, section 11(1) and (2), section 13(1) and (2), section 15(5) and (7) and section 16(1) and (2). It is necessary to set out the provisions of the above sections for a proper appreciation of the arguments of learned e Counsel. The relevant sections of the Decree reads as follows:– 11(1) An application for the recovery of a debt owed to a failed bank shall be brought before the Tribunal by the receiver f or liquidator of the failed bank and where there is no receiver or liquidator, by a person appointed by the CBN or NDIC. (2) The application referred to in subsection(1) of this section g shall contain the following, that is:– (a) the name and addresses of the borrower; (b) if the borrower is a body corporate, a partnership, or a sole trader:– h (i) the address of its principal place of business (ii) the names and addresses of its shareholders, directors, proprietors, or partners as the case may i be; (c) the amount of loan and advance outstanding; (d) details of the securities pledged, if any and (e) such other information as may be useful to the Tribu- j nal. (Italics mine.) [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 592 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

13(1) If the debtor:– a (a) at the expiration of the period specified under section 12(1) of this Decree, fails, to repay all the outstanding loan and interest; or b (b) disputes the loan or interest the Tribunal shall proceed to hear the case and enter judgment and make such order as it deems appropriate for the purposes of this part of this Decree. (2) Where the Tribunal makes an order for the payment of the c loan and interest and the debtor fails to comply within the time specified in the order, the Tribunal shall make an order to levy execution on all the properties of the debtor pledged as security for the loan. (Italics mine.) d 15(5) If the money obtained from the sale under subsection (1) of this section is not sufficient to offset the outstanding loan and interest thereon, the Tribunal may, where the debtor e (a) is an individual, levy execution on the other properties of the debtor; (b) is a body corporate, partnership or other association of individuals, notwithstanding anything to the contrary in the Companies and Allied Matters Decree, 1990, f (CAMA) or any other law for the time being in force, levy execution on the other properties of the body corporate, partnership or association of individuals. (Italics mine.) g 15(7) If the money obtained from the sale of properties under subsection (6) of this section is still not sufficient to offset 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 h corporate, partners of the partnership or individuals of the association, as the case may be, which shall be sold and applied in satisfaction of the outstanding debts, in accordance with the provisions of this section. (Italics mine.) 16(1) Where i (a) the information and details on the security pledged for the loan and filed before the Tribunal is impossible to locate; or (b) no security is pledged at all; or j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Nigeria Deposit Ins Corp v. Crossland Finance and Investment Ltd 593 a (c) the identity of the debtor is difficult to locate; or (d) the debtor is found to be non-existent, fake, or fictitious or in any way unidentifiable, b the Tribunal shall hold liable, for the outstanding loan and interest thereon, the directors, shareholders, partners, managers, officers, and other employees of the failed bank who in the performance of their duties were found to have c been connected in any way with the granting of the loan which has become irrecoverable. (Italics mine.) (2) The Tribunal shall proceed to recover from the persons referred to in subsection (1) of this section, jointly and d severally the outstanding loan and interest thereon in accordance with the provisions of this Decree, unless the Tribunal is satisfied that the debt was incurred without the consent of the director, partner, shareholder, manager, officer or employee and that he exercised all such diligence e as he ought to have exercised having regard to the nature of his functions and all the circumstances of the case. (Italics mine.)

To start with, it is elementary law that in the interpretation f of statutes the court is concerned with the intendment of the statute. In this connection, a section of a statute must be examined as a whole with a view to determining the object it was intended to serve. More importantly, it should be inter- g preted broadly so as not to defeat the intention of the law maker. See Onyeanusi v. Misc. Offences Tribunal (1995) 8 N.W.L.R. (Part 415) 628; Ekpo v. Calabar LGA (1993) 3 N.W.L.R. (Part 281) 324 and Tafida v. Abubakar (1992) 3 h N.W.L.R. (Part 230) 511. It is also trite law that a court of law is concerned with law as it is and not with law as it ought to be. Thus, a court is not to ascribe meanings to the clear, plain and unambiguous i provisions of a statute in order to make such provisions conform with the court’s own view of their meaning or of what they ought to be in accordance with the tenets of sound social policy. See Onyeanusi v. Misc. Offences Tribunal (su- j pra), A.G. Fed. v. Sode (1990) 1 N.W.L.R. (Part 128) 500. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 594 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Now, as Mr Popoola rightly submitted, it is obvious from a a careful reading of section 11(1) and (2) that Decree No. 18 of 1994 (as amended), does not provide that shareholders, directors, proprietors, or partners of an indebted company b must be made parties to the suit at the very commencement of an action for the recovery of debt before the Tribunal. Section 11(2)(b) of the Decree merely states that the application for recovery of debt shall contain certain facts. The word “contain” means “to have within; to hold something c inside etc”. See English Law Dictionary by P.H. Collin. Sec- tion 11(2)(b) of the Decree provides that the application shall contain the name and addresses of its shareholders, directors, proprietors, or partners as the case may be; the d amount of loans and advance outstanding; details of the securities pledged; and such other information as may be useful to the Tribunal. To my mind, the operative words here are “such other in- e formation as may be useful to the Tribunal”. The word “other” means “different or distinct from that already mentioned; additional or further”. See Black’s Law Dictionary (5ed). The details of the securities pledged is useful to the f Tribunal, because section 13(1) and (2) of the Decree provides that, where the debtor fails to repay all the outstanding loan and interest within the time specified, then the Tribunal is empowered to “levy execution on all the properties of the g debtor pledged as security for the loan.” If the borrower is a body corporate, the names and addresses of its shareholders, directors proprietors, or partners as the case may be, is also useful to the Tribunal because h section 15(5) and (7) of the Decree provides that, where the money obtained is not sufficient to offset the outstanding loan and interest, then the Tribunal is given powers “to levy execution on the other properties of the body corporate”. If i that is still not sufficient to offset the outstanding loan and interest, the Tribunal is empowered, subject to section 290 of the CAMA 1990, to “levy execution on the personal properties of the directors of the body corporate” etc, which shall be sold and applied in satisfaction of the outstanding j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Nigeria Deposit Ins Corp v. Crossland Finance and Investment Ltd 595 a debts. It must be noted that under Decree No. 18 of 1994, a “director” includes a wife, husband, father, mother, son or daughter of a director. See section 29 of the Decree. b In effect, the use of the expression “such other information as may be useful to the Tribunal”, in section 11(2)(e) of the Decree, indicates that the requirements of the name and addresses of the borrower in section 11(2)(a) of the Decree; c where the borrower is a body corporate, the names and addresses of its shareholders, directors, proprietors, or partners as the case may be in section 11(2)(b) of the Decree; the amount of loan and advance outstanding in section 11(2)(c) d of the Decree; and details of the securities pledged in section 11(2)(d), are merely information in the application for recovery of debt, which will be useful to the Tribunal in the recovery of a debt owed to the applicant. It is also apparent e from sections 12 and 13 of the Decree, that the required information is useful to the Tribunal only after it makes an order for the payment of the loan and interest and the debtor fails to comply within the time specified in the order. f Obviously, it was not intended by the Decree that any one connected with an indebted company, in whatever way, would be made parties at the commencement of an action g for the recovery of debt before the Tribunal, except of course, those who were directly involved in incurring such debts and were in a position either as executive officers or management staff of the indebted company to ensure the re- h payments of the debts and have been seen to have failed to do so. As Nnaemeka-Agu, JSC (as then was) observed in N.N.S.C. v. Alhaji Hamajoda Sabana Ltd (1988) 2 N.W.L.R. (Part 74) 23 at 58. i “A company, it has been said, is an abstraction. It therefore acts through living persons. But it is not the act of every servant of the company that binds the company. Those whose acts bind the company are their alter ego – those persons who because of their positions are the directing mind and will of the company, the very j ego and corporate personality of the company.” [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J 596 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

In his submissions in support of this application, Mr Popoola a argued that before anybody can be dragged to the Tribunal, there must be an allegation or a complaint otherwise called a cause of action against such a person, and where there is no b cause of action or a reasonable cause of action, the suit is either struck out or that party is struck out. I agree with him. The Supreme Court defined what constitutes a cause of action in the case of Nosiru Bello v. A.G. of Oyo State (1986) 5 c N.W.L.R (Part 45) 828 as follows:– “A cause of action is a bundle of aggregate facts which the law will recognise as giving the plaintiff a substantive right to make the claim against a relief or remedy being sought. The factual d situation on which the plaintiff relies to support his claim must be recognised by law as giving rise to a substantive right capable of being claimed or enforced against the defendant. Thus, the factual situation relied upon must constitute the essential ingredients of enforceable right. Concisely stated, any facts relied upon by the e plaintiff resulting from the act of the defendant which gives rise to a justifiable complaint is a cause of action.” In other words, a cause of action means a factual situation the exercise of which entitles one person to obtain from the f court a remedy against another person. It is the act on the part of the defendant which gives the plaintiff his cause of complaints. See Alese v. Aladetuyi (1995) 6 N.W.L.R. (Part 403) 527, Adebowale v. Mil. Gov. of Ogun State (1995) 4 g N.W.L.R. (Part 392) 733 and U.B.N Ltd v. Odusote Book- stores (1995) 9 N.W.L.R. (Part 421) 558. The law is that to find out what the cause of action in a h claim is, one must look at the writ of summons and statement of claim and no more. See Sea Trucks (Nig.) Ltd v. Pyne (1995) 6 N.W.L.R. (Part 400) 166. The averments in the affidavit in support of this application and the counter- affidavit are therefore irrelevant and unnecessary for the de- i termination of the question, whether there is any act on the part of the second respondent that gives rise to a cause of action. Since this is an application for a recovery of debt before the Failed Banks Tribunal, the relevant pleading j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ZONE V, LAGOS) Augie J Nigeria Deposit Ins Corp v. Crossland Finance and Investment Ltd 597 a is the statement/particulars of indebtedness. In its statement/particulars of indebtedness the applicant pleaded as follows:– b “On 29th January, Hillcrest Merchant Bank Ltd extended credit facility of N5,000,000 for 90 days at the rate of 65% per annum to Great Merchant Bank Ltd for the use of the debtor, Crossland Fi- nance and Investment Ltd. Transaction was effected through the Central Bank of Nigeria and the transfer advice was issued by c Hillcrest Merchant Bank Ltd. When the facility expired and became due for repayment Crossland Finance and Investment Ltd failed and or refused to pay back the debt as and when due. The account of Great Merchant Bank Ltd with Central Bank of Nigeria d was subsequently debited thereby paying the debt due on behalf of the debtor company to Hillcrest Merchant Bank Ltd. In several letters dated 21st March, 1994, 13th April, 1994 and 19th October, 1995, Great Merchant Bank Ltd demanded the repayment of the said debt but were unheeded by the respondents. e The said letters of demand will all be relied on during the trial. The debtor company (Crossland Finance and Investment Ltd) has accepted and acknowledged its indebtedness to the applicant in letter through its solicitors dated 14th April, 1994, in which it f pleaded for time to pay back. The said letter of acknowledgment of debt is hereby pleaded. As at 31st December, 1995, the total indebtedness of Crossland Finance and Investment Ltd stood at N13,137,667.07, being principal sum plus interest accrued.” g It is very clear from the applicant’s pleading that no cause of action has been established against the second respondent, and it is settled law that a person should not be joined as defendant against whom there is no claim by the plaintiff. See h Olujitan v. Oshatoba (1992) 5 N.W.L.R. (Part 241) 326. I therefore hold that the application succeeds and the name of the second respondent is hereby struck out from this suit. The second leg of this application in respect of the issue of i service on the other respondents is deemed abandoned, as the respondents have filed a reply to the substantive application and they are being represented by Mr Popoola. Application for striking out of the name of the second re- j spondent granted. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE)

598 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Nigeria Deposit Insurance Corporation v. Enebros Motors Limited and Others b FAILED BANKS TRIBUNAL, ENUGU ZONE NZEAKO J Date of Judgment: 28 NOVEMBER 1996 Suit No.: FBFMT/EZ/55/96

Banking – Banker and Customer Relationship – Indebted- c ness of Customer to a failed bank – Judgment for bank and debtor given time to pay judgment debt but defaulting – Right of judgment Creditor to sell properties pledged as security – When judgment Creditor can commence criminal d prosecution against debtor under sections 13(2), 19(4) of the Failed Banks Decree No. 18 of 1994 (as amended)

Facts e On 25th July, 1997 the Tribunal entered judgment for the applicant against the respondents jointly and severally in the sum of N3,948,977.80 (Three Million, Nine Hundred and Forty-eight Thousand, Nine Hundred and Seventy-seven f Naira, Eighty kobo) together with interest and gave the respondents 30 (Thirty) days to liquidate the judgment debt. The respondents did not pay within the time stated in the judgment whereupon the applicant applied to the Tribunal g pursuant to sections 13(2) and 19(4) of the Failed Banks De- cree No. 18 of 1994 (as amended) to sell by private treaty or public auction the properties of the debtor mortgaged as security for the loan. They also applied for an order directing h the police or other security agencies to effect the arrest of the second – fourth respondents and bring them up to the Tribunal to show cause why they should not be convicted for their failure to pay the judgment debt as directed. i Held – 1. Since the debtors failed to pay the judgment sum within the time stated, the judgment creditor is entitled to sell their properties pledged as security for the loan which is j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE)

Nigeria Deposit Insurance Corporation v. Enebros Motors Ltd 599 a the subject matter of this action pursuant to section 13(2) Failed Banks Decree No. 18 of 1994 (as amended). 2. By virtue of sections 19(4) and 20(1)(d) of the Failed b Banks Decree No. 18 of 1994 (as amended) it is an offence punishable by a term not exceeding three years imprisonment without an option of fine, if a person failed to comply with the order of the Tribunal under c section 13(2) of the Decree for the payment of the loan and interest within the time specified in an order under that section. 3. Where the Tribunal in a civil action gives a debtor time d to pay a judgment debt and the debtor fails to pay within the time stipulated, such a debtor is guilty of an offence under section 19(4) of the Failed Banks Decree No. 18 of 1994 (as amended) and the procedure for prosecuting e such a debtor is for a report to be made to the Police which will investigate, make a report, forward the file of the completed investigation to the Attorney-General of the Federation who is empowered to institute the prose- f cution of offences under section 24 of the Decree. Granting the first leg of application.

Nigerian statute referred to in the judgment g Failed Banks (Recovery of Debts) and Financial Malprac- tices in Bank Decree No. 18 of 1994 (as amended), sections 13(2), 19(4), 20(1)(d), 24, 25 h Counsel For the applicant: A.O. Agbola, Esq. i Judgment NZEAKO J: In this motion, the judgment creditor – Nigeria Deposit Insurance Corporation (“NDIC”), the Re- ceiver/Manager of Mercantile Bank of Nigeria Plc, and the j applicant in the original suit prays the Tribunal as follows:– [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 600 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

“1. An order granting leave to the applicant to sell by private a treaty or public auction the following properties mortgaged by the debtors to secure the loan granted to them by Mer- cantile Bank of Nigeria Plc i.e. b a. 24, Ekeya Street, Calabar covered by deed of legal mortgage registered as No. 43/43/139, Calabar. b. Property situate at Calabar – Itu Highway, Ikot Ekpene registered as No. 1/1/235, Calabar (now Uyo) 2. An order directing the Police or other security agencies to c effect the immediate arrest of the second to fourth respondents and bring them up at the Tribunal at a named date to come and show cause why they should not be convicted for their failure to pay the judgment debt of N3,948,977.80 and d accrued interest on or before the 25th of July, 1997 as directed by this Tribunal. 3. And for such further or other orders as this Honourable Tri- bunal may deem fit to make in the circumstances.” e In support of the Motion is an affidavit of 9 paragraphs, deposing in relevant paragraphs 1–8 as follows:– “1. That I am the Solicitor appointed by the Nigeria Deposit Insurance Corporation to recover the debts owed to Mercan- f tile Bank of Nigeria Plc by the respondents by virtue of which I am conversant with the facts of this case. 2. That on the 25th of July, 1997, this Honourable Tribunal entered judgment for the applicant against the respondents jointly and severally in the sum of N3,948,977.80 together g with interest at the rate of 21% per annum from 1st January, 1997 until the date of judgment. 3. That this Tribunal further ordered the respondents to pay the judgment debt within 30 days of the judgment i.e. on or h before 24th July, 1997. 4. That the respondents have not paid the judgment debt or any part thereof. 5. That as a security for the debt, the respondents mortgaged 2 i properties situate at 24, Ekeya Street, Calabar and at Cala- bar-Itu Highway, Ikot- Ekpene respectively to the Bank. 6. That it would be in the interest of justice for this Tribunal to order a foreclosure of these mortgaged properties in favour of the applicant. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Nigeria Deposit Insurance Corporation v. Enebros Motors Ltd 601 a 7. That I firmly believe that unless restrained and put in custody, the second to fourth respondents are likely to obstruct the sale of the mortgaged properties. b 8. That I also firmly believe that if the second to fourth respondents are put into custody, they will take this matter seriously and initiate efforts to settle the judgment debt.” At the hearing, Counsel for the judgment creditor/applicant c addressed as follows:– “That the motion is brought pursuant to sections 13(2), 19(4) and 20(1)(d) of Decree No. 18 of 1994, amended by Decree No. 18 of 1995. He recounted the prayers in the motion, the affidavit in support and the order in the judgment of the Tribunal requiring the d judgment debtors to pay the judgment debt within 30 days from 25/6/97, the date of the judgment and the failure of the debtors to pay.” Counsel submitted that the judgment of a court once read in e open court is judgment to the whole world and binding on the parties thereto without further assurance. Counsel restated the provisions of section 13(2) pointing f out that it is mandatory by virtue of the use of the word “shall”, to enunciate the powers of the Tribunal to make an order to levy execution on all the properties of the debtor pledged as security for the loan where the debtor fails to pay. g Counsel referred to his second prayer and to sections 19(4) and 20(1)(d) of Decree No. 18 of 1994 to show that this Tri- bunal should make the order sought. h He urged the Tribunal to grant the application. In respect of the first prayer in the motion, we have looked at the provisions of section 13(2) of Decree No. 18 which i provides as follows:– “13(2) Where the Tribunal makes an order for the payment of the loan and interest and the debtor fails to comply within the time specified in the order, the Tribunal shall make an order to levy execution on all the properties of the j debtor pledged as security for the loan.” [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 602 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

We have also noted the deposition in the supporting affida- a vit, sworn to by A.O. Agbola, Esq., the solicitor engaged in the prosecution of this matter by the applicant. This is that the debtors have, after the judgment and order of this Tribu- b nal on 25th June, 1997, not paid the judgment debt, as required of them within 30 days of that date of 25th June, 1997. We accept that fact. c Two properties pledged as security for the loan were, in paragraph 5 of the affidavit named, and corresponding with those given in evidence at the trial. They are:– 1. Legal Mortgage of property at 24, Ekeya Street, d Calabar registered as No. 43/43/139, Calabar. 2. Legal Mortgage of property at Calabar – Itu High- way, Ikot Ekpene registered as No. 1/1/235, Calabar. e These properties the judgment creditor prays for an order of this Tribunal to sell. It is pertinent to affirm that judgment was indeed entered for the applicant against the respondents/judgment debtors f on 25th June, 1997 in the sum of N3,948,977.80 which they were ordered to pay within 30 days from that date. They have not paid. In view of the provisions of section 13(2) of Decree No. 18 g of 1994 (supra), we hold that the judgment Creditor, NDIC is entitled to the Order sought; namely to sell the said 2 properties earlier described, mortgaged by the respondents/judgment debtors by public auction or private treaty as h shall be directed hereafter. As to the second prayer in the motion, we have carefully considered the provisions of Decree No. 18 of 1994 and the Amendment in Decree No. 18 of 1995. i We have noted that by virtue of the provisions of section 19(4) of the Decree and also section 20(1)(d), it is an offence punishable by a term not exceeding 3 years imprisonment without an option of fine, if a person, “fails to comply j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Nigeria Deposit Insurance Corporation v. Enebros Motors Ltd 603 a with the order of this Tribunal under section 13(2) of the Decree for the payment of the loan and interest within the time specified in an order under that section.” b It has earlier been accepted that the debtors had failed to obey the applicable orders of this Tribunal. They ought to be prosecuted. We have however observed that the Decree makes provi- c sion for bringing to book persons who have committed offences punishable under Decree No. 18. In section 24, it is provided as follows:– “Section 24(1) The rules of procedures for offences under this d Decree and the forms to be used in such proceedings shall be as set out in Schedule 2 to this Decree. (2) Prosecutions for offences under this Decree shall be instituted before the Tribunal in the name of e the Federal Republic of Nigeria by the Attorney- General of the Federation or such officer in the Federal Ministry of Justice as he may authorise so to do, and in addition thereto, he may:– f (a) after consultation with the Attorney-General of any State in the Federation, authorise the Attorney-General or any officer in the Min- istry of Justice of that State; or b g () if a Tribunal so directs or if the Central Bank of Nigeria or the Nigeria Deposit In- surance Corporation so requests, authorise any other legal practitioner in Nigeria.’ to undertake any such prosecution directly or h assist therein. (3) The question whether any or what authority has been given in pursuance of subsection (2) of this section shall not be inquired into by any person i other than the Attorney-General of the Federa- tion. (4) A person accused of an offence under this De- cree shall be entitled to defend himself in person or by a person of his own choice who is a legal j practitioner resident in Nigeria. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J 604 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(5) Where the rules of procedure contained in a Schedule 2 to this Decree contain no provisions in respect of any matter relating to or connected with the trial of offence under this Decree, the Tribunal may apply the provisions of the Crimi- b nal Procedure Code or, depending on the venue, the Criminal Procedure Act, with such modifications as the circumstances may require, in respect of such matter to the same extent as they c apply to the trial of offences generally. (6) Subject to section 4(2) of this Decree, prosecution for offences under this Decree shall be instituted within 21 days after the receipt by the At- torney-General of the Federation of the file con- d taining completed police investigation or the complete report by the Central Bank of Nigeria or Nigeria Deposit Insurance Corporation in respect of the offence. e 25. A person who commits an offence under this Decree may be arrested without warrant by a police officer or any member of the armed forces of the Federation, as the case may be.” It seems therefore to us that the way to bring the debtors to f book is for the applicant NDIC to report their default to the appropriate authorities which will initiate criminal proceedings as provided in the Decree and the Criminal Procedure Act. g We find in section 24(6) provision which show that a report ought to be made as appropriate by the CBN or NDIC to the Police, which will investigate, make a report, forward the file of the completed investigation to the Attorney- h General of the Federation. It is the Attorney-General who institutes the prosecution of offences under this Decree (See section 24(2)). i It is in the light of the foregoing, we hold the view that this Tribunal does not possess the powers which it is being prayed by the applicant to exercise in order to secure the conviction of the debtors under sections 19(4) and 20(1)(d) of Decree No. 18 of 1994. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, ENUGU ZONE) Nzeako J Nigeria Deposit Insurance Corporation v. Enebros Motors Ltd 605 a The applicant/judgment creditor’s Counsel may accordingly wish to pursue the matter through the appropriate channel. b The applicant’s prayer for “an order directing the Police or other security agencies to effect the immediate arrest of the second – fourth respondents . . . to show cause why they should not be convicted for their failure to pay the judgment c debt . . .”, is hereby refused. In the light of the foregoing, the applicant/judgment creditor’s first prayer only succeeds. In the premises, the orders we make pursuant to section d 13(2) of Decree No. 18, 1994 are as follows:– 1. It is ordered that execution shall be levied on the properties of the debtors in this suit pledged as security for the loan subject matter of the suit in which judgment was delivered e on 25/6/97, being the property at; a. 24, Ekeya Street, Calabar registered as No. 43/43/139, Calabar; b. Calabar – Itu Highway, Ikot Ekpene registered as No. f 1/1/235, Calabar now at Uyo. 2. The said sale shall be by private treaty or public auction under the direction of the Secretary to this Tribunal, and his Registrar who shall be guided by the need to secure the best market price after due valuation of the said property. g 3. The cost of any expenses incurred thereby and any other deductions allowed shall be charged to the proceeds of the sale of the said property as shall be approved by this Tribu- nal. h 4. The foregoing shall be subject to any further orders as the Tribunal may deem fit. The foregoing is the order of this Tribunal. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

606 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

a Nigeria Deposit Insurance Corporation v. Kapital Securities Limited and Others b FAILED BANKS TRIBUNAL, BENIN ZONE MOMOH J Date of Judgment: 5 DECEMBER 1996 FBT/BZ/4/96

Banking – Interest – Failed Bank – Whether can continue to c charge interest after its closure or declaration as a Failed Bank Failed Banks Tribunal – Interest on judgment debt – Princi- ples applicable d Failed Banks Tribunal – Who can bring action on behalf of a Failed Bank

Facts e The applicant brought application before the Tribunal for recovery of debt due from the respondent to the Bank. A dispute arose as to the proper rate of interest chargeable on the debt, and period the Tribunal could take into considera- f tion. The applicant was insisting on 45% interest, while the respondent conceded 21%. While the applicant was insisting g on charging interest until final liquidation of the debt, the respondent argued that the interest should stop as from the date the Bank was declared a Failed Bank. Held – h 1. Interest chargeable normally is as agreed by the parties or under a mercantile custom or under a principle of equity. Where interest is being claimed as of right, the proper practice is to claim entitlement to it on the writ i and plead facts which show such an entitlement. 2. A proper interpretation of sections 3(1)(a) and 9 of the Failed Bank Decree No. 18, 1994 (as amended) read along with the definition of the word “debt”, the effect is j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 607 a that only debt outstanding to a Failed Bank as at the date of the closure of the Bank becomes immediately due and enforceable as at the date irrespective of any arrange- b ment or law to the contrary. If the outstanding debt remains unpaid interest thereon, continues to run. But interest rate is determined at the discretion of the Tribunal. 3. By virtue of section 11(1) and paragraph 2 of Schedule 1 c of the Failed Bank Decree No. 18 of 1994 (as amended), the Liquidator is empowered to institute an action for the recovery of debt. The application if brought in the name of the Liquidator as done in the instant case is proper. d Nigerian case referred to in the judgment Ekwunife v. Wayne (W.A.) Ltd (1989) 5 N.W.L.R. (Part 122) e 422

Counsel f For the applicant: Mr Ibukun Ajomo For the respondent: Chief G.N. Nwechue, SAN g Judgment MOMOH J: This is an application instituted by the applicant as the Liquidator of Kapital Merchant Bank Limited for the recovery of debts claimed as due from the respondents to the h said Bank. The action was brought pursuant to section 11 of the Failed Banks (Recovery of Debts) and Financial Mal- practices in Banks Decree No. 18 of 1994. With the leave of the Tribunal granted on 13th June, 1996 the applicant i amended its Application while the respondents amended their Reply. The amended Application and Reply are reproduced below:– 1. The first–third and seventh respondents are bodies corpo- j rate. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 608 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

2. Their Principal places of business are as denoted below: a first and third respon-– 21/22 Marina, Lagos dents second respondent – 13, Okesuna Street, Lagos b seventh respondent – 22 Devonshire Street, London WIN IRL 3. The names of the Directors and Shareholders of the first– third and seventh respondents include those specified below c along with their respective addresses.

DIRECTORS SHAREHODLERS Name of Name Addresses Names Addresses Company d

Kapital Dr Onwochei Plot 1154 Advanced Tech- 13, Okesuna Securities Odogwu Gabaro nologies Limited Street, Limited Road, Lagos Victoria e Island, Lagos Advanced 13, Okesuna Osimi Foundation Umolo-Uku Technolo- Street, LTD/GTE Ezi, Delta gies Limited Lagos State f Osimi Foun- Umolo-Uku dation Ezi, Delta LTD/GTE State Butler Dr Onwochei Plot 1154 Osimi Foundation Umolo-Uku g Nigeria Odogwu Gabaro LTD/GTE Ezi, Delta Limited Road, State Victoria Island, Lagos h Osimi Foun- Umolo-Uku dation Ezi, Delta State Boomgain Dr Onwochei Plot 1154 Osimi Foundation Umolo-Uku i Limited Odogwu Gabaro LTD/GTE Ezi, Delta Road, State Victoria Island, Lagos j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 609 a 4. The first–third respondents are customers of Kapital Mer- chant Bank Limited (now in liquidation) and maintain various accounts at the bank. 5. Details of the accounts are as follows:– b NAME OF ACCOUNT NO. DESIGNATION COMPANY Kapital Securities 50–1047 Overdraft c Limited 50–1122 Overdraft 66–1015 Overdraft 39–5001 Lease 30–1005 Term Loan d 41–1100 Fixed Asset Re-classified as loan 19–5100 Re-classified as loan 30–1023 Term Loan/Atlantic e Bank Limited. 60–1105 Overdrawn Term Deposit Butler Nigeria 50–1118 Overdraft f Limited 30–1011 Term Loan 39–5004 Lease Kapital Investment 50–1120 Overdraft Lease Limited 50–1151 g 6. Over the period 1989–992, Kapital Merchant Bank Limited (now in liquidation) by way of credit facilities, disbursed various sums of money to each of the first–third respondents at their request. h 7. The said sums were to attract interest at the prevailing rate until repayment. 8. Prior to the taking out of this application, the credit facilities referred to in paragraph 6 above, had become due and repayable to Kapital Merchant Bank Limited (now in liqui- i dation). 9. In spite of written demand sent to the first–third respondents by Kapital Merchant Bank Limited (now in liquidation), they have refused and/or neglected to amortise their j indebtedness. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 610 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

10. As at 29th February, 1996, the credit facilities outstanding a against the first–third respondents comprising of the principal sums granted and accrued interest thereon were as follows:– b (i) Kapital Securities Limited – N175,370,748.30 (ii) Butler Nigeria Limited – N 41,837,416.95 (iii) Kapital Investment Limited – N 7,427,071.30 11. The said sums represent the aggregate debit balances con- c tained in the accounts mentioned in paragraph 5 (supra). 12a. Kapital Merchant Bank Limited (now in liquidation) maintained deposit accounts with the American Express Bank Limited, London. d b. The seventh respondent obtained a credit facility of $66,555.27 from the American Express Bank Limited, London and secured same with a guarantee of Kapital Mer- chant Bank Limited (now in liquidation). c. Kapital Merchant Bank Limited guaranteed the aforestated e credit facility up to the maximum limit of $75,000. d. The seventh respondent defaulted in redeeming its credit facility, the American Express Bank Limited set-off the debt from the deposit of the guarantor- Kapital Merchant f Bank Limited (now in liquidation). e. By reason of the foregoing, the seventh respondent is indebted to the applicant in the sum of US$66,555.27 together with accruing interest at the prevailing rate since February g 1st, 1994. f. In consequence, the amount due to the applicant from the seventh respondent as at 19th March, 1996 is US$87,450 (as at 7th February, 1996 is USD33,555.27 as amended) (at an interest rate of 10.5% p.a.). h 13. As to the correctness of the sum referred to in the preceding paragraphs, the applicant will rely on its reports on the Fi- nancial Status of Kapital Merchant Bank Limited (now in liquidation). i 14. The fourth, fifth and sixth respondents (the latter two of which are bodies corporate), are joined in this action by reason of their control and beneficial ownership of the first– third and seventh respondents vide their interlocking directorships and shareholdings as pleaded in paragraph 3 above. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 611 a 15. At the hearing of this application, the applicant shall apply that the corporate veil of personality of the first–third and seventh respondents be lifted and the fourth–sixth respondents the paragraphs following:– b WHEREOF THE APPLICANT CLAIMS AS FOLLOWS:– (i) Jointly and severally against the first, fourth and fifth respondents, the sum of N175,370,798.30. c (ii) Jointly and severally against the second, fourth and sixth respondents, the sum of N14,837,416.95. (iii) Jointly and severally against the third, fourth and fifth respondents, the sum of N7,427,017.30. d (iv) Jointly and severally against the fourth, sixth and seventh respondents the sum of US$87,450 (or the Naira equivalent at the time of payment). The applicant claims interest on the respective sums at the rate of 21% per annum from 29th February, 1996 (as to the e seventh respondent with interest at 10.5% p.a. from 19th March, 1996) until judgment and thereafter at the same rate until payment. The total claim less the US$ claimed from the seventh re- f spondent is N224,635,286.50. AMENDED RESPONDENTS’ JOINT REPLY 1. SAVE as herein expressly admitted the respondents deny each and every allegation of fact contained in g the Application as if the same were set out seriatim and specifically traversed. 2. The respondents admit paragraphs 1, 2, 3, 4 and 12(a)–12(c) of the Application. h 3. The respondents while admitting that the various accounts were kept as averred in paragraph 5 of the Application are not now in a position to admit or deny the specific account numbers and designations i and the applicant is hereby put in strict proof thereof. 4. The respondents admit paragraph 6 of the statement of claim and shall urge at the trial that monthly statement of account over the period (1989–1992) be j provided by the applicant. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 612 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

5. The respondents deny paragraph 7 of the statement a of claim and aver that interest rates are as stated in offer letters and loan agreements and the respondent shall also used that all credit and debit advises, offer letters, loan agreements, lease agreements, deeds b of debenture etc and all such documents now in the exclusive possession of the applicant be provided by the applicant at the trial. 6. The respondents deny paragraphs 8, 9, 10, 11, 12(d), c (e) and 12(f) of the Application and put the applicant to strict proof thereof. 7. The respondents further aver with reference to paragraphs 9 that in reply to the applicant’s demands for payment the respondents informed the applicant that d the subject matter of the demands was in issue in Suit No. FHC/L/CS/72/94 between Kapital Mer- chant Bank Ltd on the one hand and Central Bank of Nigeria and the applicant on the other. The respon- e dents shall rely on relevant papers at the trial. 8. With reference to paragraph 10 respondents further aver as follows:– (i) The indebtedness of Kapital Securities Limited and Butler Nigeria Limited were matters already f determined between the parties in Charge No. FBT/BZ/3C/95 (Federal Republic of Nigeria v. Dr Onwochei Odogwu and another) (See: (1997) 1 FBTLR 179). The respondents shall g rely on the record of proceedings, the judgment and exhibits in that case. (ii) In particular, the respondents shall rely on exhibits FB23A, 23B and 25C. The respondents shall show that as at 20/1/94 the indebtedness of h the first, second and third respondents were as follows:– KAPITAL SECURITIES LTD N80,443,815.04 BUTLER NIGERIA LTD N18,106,079.60 i KAPITAL INVESTMENTS LTD N4,314,334.65 (iii) The respondents dispute any accretion of interests beyond 20/1/94 when the Banking Licence of Kapital Merchant Bank Ltd was revoked and j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 613 a its business was closed. The applicant shall be required to produce the “1990 PRUDENTIAL GUIDELINES” issued by the Central Bank of Nigeria which is in the applicant’s possession. b (iv) In any event, the respondents shall urge that any interest (the rate of which is also disputed) if ac- cruable at all (which is denied) if worked out would not bring the indebtedness of the respon- c dents up to any sum close to the aggregate sums claimed in paragraph 10 of the Application. 9. With further reference to paragraphs 12(d), (e) and (f), which are denied, the seventh respondent avers d that the outstanding balance was paid by a sister company between May and July, 1994. The seventh respondent shall rely on a letter to American Ex- press Bank Ltd. The respondent shall rely on all letters, papers or memoranda to establish that the in- e debtedness of the seventh respondent had since been discharged. The fourth respondent who alone is familiar with the transaction but is now confined in prison shall urge that he be given adequate opportu- f nity to locate and tender the relevant papers to which he now has no access. 10. With reference to paragraph 13 of the Application the respondents shall urge that the provisions of section 10(a)–(c) of Decree No. 18 are inapplicable in g the face of adequate primary sources of evidence as earlier pleaded in this Reply. The respondents shall urge that the report referred to in paragraph 13 of the application be rejected. h 11. The third–seventh respondents shall contend, with reference to paragraphs 14–15 that they are not liable jointly or severally in respect of any of the sums alleged outstanding thereof. i 12. The respondents further aver that at the trial in Charge No. FBT/BZ/3C/95 referred to above, this Honourable Tribunal ordered that property at No. 2 Cooper Road, Ikoyi, Lagos belonging to the first respondent, be sold and part of the proceeds applied to j set-off the indebtedness of the fourth respondent’s [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 614 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

companies to Kapital Merchant Bank Limited after a reconciliation of accounts. 13. The seventh respondent shall urge that service on it through the fourth respondent was irregular; that ac- b tion against it is incompetent as it is outside the jurisdiction of the court and appropriate legal steps had not been taken by the applicant in respect thereof. 14. Wherefore the respondents shall urge that the claim in any sum in excess of the sum admitted by them in c paragraph 8 hereof be dismissed.” EVIDENCE The case for the applicant was presented by Ibrahim A. K. Madaki, a Senior Manager in the Receivership and Liquida- d tion Department of Nigeria Deposit Insurance Corporation (NDIC) – the applicant. His evidence was substantially in line with the facts pleaded in this Application. He tendered documents relevant to the claims. A summary of his evi- e dence is as follows:– On 21st January, 1994 the banking licence of the Kapital Merchant Bank was revoked and NDIC appointed as the provisional Liquidator of the Bank. Exhibit FBI is the copy f of the Federal Republic of Nigeria Official Gazette containing the Government Notice in respect of the said revocation and appointment. The fourth respondent was the Managing Director and as such the Chief Executive of the bank at all g times material to its closure. The official liquidator NDIC in taking over the affairs of the bank collected all available ledger cards, credit files in respect of loans and debtors to the bank were complied by the witness and members of his h team assisted by the staff of the bank from the ledger cards and credit files. Exhibit FB2 contains the names of depositors or creditors of the bank. On the debtor’s side, series of ledger cards were tendered i to show that the first, second, third and seventh respondents were customers and debtors to the bank. STATUS REPORTS were prepared from the ledgers and signed by the witness to show the amount due as at 21st j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 615 a January, 1994 when the bank was closed. The updated balances due from the four companies, as at 29th February, 1996 when this action was filed, were also shown in the Re- b ports. The ledgers used in compiling the Status Reports are before the Tribunal but the Loans Register pleaded in the application were not tendered. A. CLAIMS AGAINST KAPITAL SECURITIES LTD c (first respondent) Kapital Securities, first respondent, maintained eight accounts with the bank with total outstanding debit balance N108,937,278.70 as stated in exhibits F, B, C – Status Re- d ports. The relevant ledgers were tendered as exhibits FB3A–H. The outstanding debit balance on the ledgers when added amounted to N108,967,278.70 as at 21st January, 1994. e Some of the facilities enjoyed by the debtors were reclassified by NDIC after the take-over and the various accounts were updated with compound interest of 21% charged. The total amount claimed due as at 29/2/96 when this action was f filed rose to N168,855,310.10 due on the 8 accounts of Kapital Securities Ltd. One account was opened by KSL in the name of the Atlan- g tic Bank Ltd which was being promoted and financed with the funds from the Kapital Merchant Bank Ltd. In the end, no banking licence was issued to the Atlantic Bank. The relevant ledgers cards of the proposed bank’s Account No. 30–1023 (designated Share Loan Account) is exhibit FB5 h concerning the period 16th October, 1990 to 31 December, 1991 with the debit balance of N3,058,840.80. The outstanding of the amount as at 21st January, 1994 the amount with interest of 21% per annum was N519,154.90 while the i amount rose to N6,518,602.27 as at 29th February, 1996 as shown in the Status Report, exhibit FB6. The amount was classified as loan due from KSL and when added to the sums due on KSL’s said eight accounts, the grand total j of the amount due from KSL on the 9 accounts came to [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 616 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

N113,462,434.60 as at 21/1/94 and N175,370,798.30 as at a 29/2/96. B. CLAIM AGAINST BUTLER NIG. LTD b (second respondent) The company maintained 3 accounts with the Kapital Mer- chant Bank. They are Overdraft Account 50–011, Term Loan account 30–1011 and Lease account 39–5004. The 3 c accounts had a total debit balance of N26,989,478.36 outstanding as at 21st January, 1994. It was updated at 21% compound interest which brought it to N41,837,416.95 as at 29th February, 1996. exhibit FB 8 is the Status Report while d exhibits FB7(A) to FB7(C) are the 3 Ledger Cards of the 3 accounts. C. CLAIM AGAINST KAPITAL INVESTMENTS CO. LTD (third respondent) e Two accounts were maintained by the Company with KMB Ltd and the relevant sets of ledger Cards are exhibits FB9(A) and FB9(B) while the Status Report is exhibit FB 10. In the f Overdraft Account No. 50–1120 and the Lease Account No. 50–1151 a total debit balance of N4,191,587.27) was outstanding as at 21st January, 1994. The amount rose to N7,427,071.30 when updated with 21% interest to 29 Febru- g ary, 1996. The prevailing interest between 1st January 1994 and 29th February, 1996 remained at 21% compound. D. CLAIM AGAINST BOOMGAIN LTD (seventh respondent) h The Company Boomgain Ltd was a customer of KMB. The ledger and the relevant documents were not traced in the bank but evidence of its indebtedness of 66,555.27 US Dol- lars to AMEX London was disclosed in the correspondence i tendered as exhibits FB11 and 12. They are in support of the facts plead in paragraph 12 of the application. Kapital Mer- chant Bank issued a written guarantee signed on 26th No- vember, 1993 by the fourth respondent the then managing j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 617 a director of the bank in favour of America Express Bank Ltd. London (AMEX) for the payment of banking facilities granted to Boomgain Ltd. The guarantee was to the limit of b seventy-five thousand US Dollars to expire on 5th Decem- ber, 1994 – see page 3 of exhibit FB11. Boomgain Ltd. Failed to pay the outstanding overdraft facilities granted it. Consequently AMEX exercised its right of set-off against c the guarantor KMB Ltd as notified in exhibit FB12. Upon subsequent payment by Boomgain Ltd of part of its indebtedness to AMEX, the latter in turn refunded 30 thousand US dollars by crediting NDIC account on 7th February, 1994. Amount now claimed against Boomgain is reduced by that d amount to read US Dollars 36,555.27 as at that date – 7th February, 1994 with interest at prevailing rate from 1st Janu- ary, 1994. The witness PW1 claims 44,547.35 US Dollars as at 29th February, 1996 being principal and interest at 10.5% e per annum foreign rate. DEFENCE The fourth respondent, Dr O. Odogwu, gave evidence on f behalf of himself and the other respondent being companies he promoted and set up. He said that KMB Ltd was set up both by himself and the first respondent. He is a director of the bank and the first respondent company along with g others. He admitted that his companies namely first, second and seventh respondents were indebted to the Kapital Merchant Bank Ltd (“KMB”) and tendered as exhibits FB14, 15 and 16 showing debit balances as at between the h dates of last entries in the ledgers and the 21st January, 1994 when the bank was closed. He calculated the number of days between both dates in compiling the various balances he admitted were due from the accounts of the first to third i Companies to the bank. His figures were to some extent different from those arrived at by the applicants while a few figures agreed. The fourth respondent said that KSL was owing on 7 of the j 9 accounts a total of N80,106,079.82 as at 21st January, [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 618 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

1994 as against N113,456,433.73 claimed from KSL and not a owning on 2 accounts. He said Butler Nig. Ltd. Was owing a total of N17,577,420.38 on its 3 accounts as against N26,989,477 claimed. As for Kapital Investment he admit- b ted that on its 2 accounts the amount owing was N4,292,334 as against N4,791,587.27 claimed. Boomgain Limited, he admitted, was owing KMB US Dollars 33,555,27 being the balance of the credit facility granted to the company on the c guarantee of KMB. On the whole he admitted that all his said 4 companies were owing a grand total of N101.5 million as at 21st Janu- ary, 1994 and Boomgain’s debt of 33,555.27 US Dollars, d balance of the credit facility debited against the AMEX account of KMB. He resisted seriously the interest charged between 21st January, 1994 when the licence of the bank was revoked and 29th February, 1994 when this action was filed e for the recovery of debts due to KMB. He said in this regard that no interest is chargeable upon the revocation of the banking licence on 21st January, 1994. He said: “when a bank is in liquidation all monetary transaction cease to at- f tract interest even in the case of voluntary liquidation. It is the banking practice worldwide”. He admitted that in 1993 the rates of interest on loan were determined by market force and the rates were very high reaching a peak of over 55%. g The interest rate stabilised in 1994 and was fixed at a maximum of 21% per annum by the Central Bank. He tendered as FB 13 the letter addressed by NDIC to the first respondent (KSL) with copies of Ledger Cards on KSL accounts. h They reveal that interest rates charged in most of them were not stated but in one of them 15% rate was charged for the 1993 deregulation period. The fourth respondent calculated as chargeable the interest rate to 21st January, 1996 when i the licence of the bank was revoked. His detailed calculations on all the accounts run to pages in exhibit FB 13 and will be considered last in this judgment along side with the applicant’s tabulation. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 619 a WRITTEN AND ORAL SUBMISSIONS BY CHIEF UWUECHUE, SAN ON BEHALF OF THE RESPONDENTS Mr Uwechue replying on the debts admitted by the re- b spondents submits that the sums in excess of the admitted amount be disallowed. He addressed on the dispute over interest. He raised objection to the joinder of Boomgain Ltd. As a party and also objected to the action being brought in c the name of NDIC. According to him, the issues for determination from the averment and evidence are:– (1) Whether the applicant, NIGERIA DEPOSIT IN- SURANCE CORPORATION, has LOCUS STANDI d to bring this application in its name rather than the name of KAPITAL MERCHANT BANK LIMITED. (2) Whether the Tribunal has the jurisdiction to hear and determine the applicant’s matter concerning recovery e of the debt owed to a Failed Bank which remained outstanding as at 29th February, 1996, well over two years from 21st January, 1994 the date of closure of the business of the failed bank. f (3) Whether the applicant has proved the indebtedness of the first, second and third respondents beyond the sums admitted by each. g (4) Whether the applicant is entitled to interest on the sums claimed and if so, what type (simple or compound) and at what rate and from what date? (5) Whether the claim against the seventh respondent is h competent and if so, what is the extent of its indebtedness to the applicant? Submissions:– i As to whether the applicant has LOCUS STANDI to sue in its name rather than in the name of KAPITAL MERCHANT BANK LIMITED leaned senior advocate submitted that:– The issue as to the LOCUS STANDI of NDIC to sue in its j name, touches on the jurisdiction of the Tribunal and may be [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 620 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. raised at any stage of the trial – refers to Akinfolarin v. Aki- a nola (1994) 3 N.W.L.R. (Part 336) 659 at 673. That although the banking licence of Kapital Merchant Bank Ltd has been revoked, it is still a legal person and no petition to b wind it up is shown to have been presented, and in any event, no winding-up order has been made in respect of the bank. NDIC is not suing as a receiver or Liquidator but is suing c as a “Provisional Liquidator”. As a Provisional Liquidator the terms, of its appointment have neither been pleaded nor given in evidence but in bringing any action, as in a winding-up petition, “it can only do so in the name of the bank d and not in its name as a Provisional Liquidator” relies on: Financial Merchant Bank Ltd v. NDIC (1995) 5 N.W.L.R. (Part 400) 226. He concluded that: “a Provisional Liquida- tor merely takes the place of the directors”. Refers to section e 422(2), 424 and 425(1)(a) of the Companies and Allied Mat- ters Act, 1990 and section 38(8) of the BOFID. The application is incompetent and should be dismissed (Adesokan v. Adetunji (1994) 2 N.W.L.R. (Part 325) 125 – submitted f learned Counsel. ISSUE 2:– Whether the Tribunal has the jurisdiction to hear and determine the applicant’s matter concerning recovery of the g debt owed to a Failed Bank which remained outstanding as at 29th February, 1996 well over two years from 21st Janu- ary, 1994, the date of closure of the business of the Failed Bank. h Submissions:– The powers of the Tribunal to receive applications for recovery of debts owed to Failed Banks are derived from sec- i tion 9 of the Failed Banks Decree which states as follows:– “Notwithstanding any thing to the contrary in any law, deed, agreement or memorandum of understanding, the Tribunal shall have exclusive jurisdiction to hear and determine all matters brought before it concerning the recovery from any person of any j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 621 a debt owed to a Failed Bank, which remains outstanding as at the date of closure of the business of the Failed Bank.” (The italicising supplied for emphasis.) b Learned Counsel recalled that the evidence of the applicant’s only witness, Abubakar Madaki, confirmed that banking licence No. 000032 dated 1st December, 1988 granted to Kapital Merchant Bank Ltd was revoked “with effect from c 21st January, 1994”. Indeed, by virtue of section 2 Banks and Other Financial Institutions Decree, 1991 (“BOFID”), it could no loner legally carry on any banking business beyond that date. The jurisdiction of the Tribunal is limited to the determination of the debts owed by the respondents out- d standing as at 21st January, 1994. By the expression “debt” in the context of section 9 of the Decree is meant:– (a) “any loan, advance, credit accommodation guarantee or any other facility”, together with “interest thereon” (sec- e tion 29). Learned Counsel submitted that any debt shown to be outstanding as at 21st January, 1994 should form the basis of the applicant’s claim and that any sums in excess thereof f must be struck out. ISSUE 3:– Whether the applicant has proved the indebtedness of the g first, second and third respondents beyond the sums admitted by each. Submissions:– h The debt incurred by each of the respondents as calculated and detailed by the fourth respondent should be relied upon and that in summary, on Issue No. 3, the respondents say that the applicant is entitled to judgment against the first, second and third respondents in the following sums:– i first respondent (KSL) N 80,106,079.60 second respondent (Butler Nig. Ltd) N 17,577,425.38 third respondent (KIL) N 4,292,334 j TOTAL N 101,975,334 [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 622 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Learned Counsel urged that in respect of the second respon- a dent that paragraph 8(ii) of the reply be further amended to reflect its correct indebtedness by substituting N17,577,426.38 as calculated by the fourth respondent b against the N18,106,079.60 claimed by NDIC. This amendment was effected. ISSUE 4:– c Whether the applicant is entitled to interest on the sums claimed and if so, what type (simple or compound) and at what rate and from what date? Submissions:– d The Learned Senior Advocate submitted that the applicant has neither pleaded facts nor led evidence to support its claim for interest on the “outstanding debt” beyond 21st January, 1994. That where interest is claimed as of right the e proper practice is to plead facts which show an entitlement in the application and give evidence to establish entitlement thereto. Ekwunife v. Wayne (West Africa) Ltd (1989) 5 N.W.L.R. (Part 122) 422. f The respondent’s Counsel further submitted that the combined effects of sections 9, 11, 12, 13 and 29 of the Failed Banks etc Decree is to limit the jurisdiction of the Tribunal to simple recovery of a “debt” outstanding as at the date of g closure of the bank’s business or, put in other words: to recover (a) the loan, advance etc and (b) the interest outstanding all as at the date of the closure of the bank’s business. h COMPOUND OR SIMPLE INTEREST:– The respondents aver that even if interest was chargeable, there was no basis to charge compound interest. “As a universal custom of bankers, a banker has the right to charge i simple interest at a reasonable rate on all overdrafts. An unusual rate of interest, with periodic rests or compound interest can only be justified, in the absence of express agreement where the customer is shown or must have been taken to j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 623 a acquiesce”. Halsbury’s Laws of England (3ed) Volume 7 Page 118 Paragraph 160. The learned Counsel continued. The relationship of banker/customer was terminated when b the licence of the bank was revoked. Thereafter the relationship has altered and the onus is on the applicant to prove its entitlement to interest and the proper rate, the date of commencement and justify the claim for compound interest – c Halsbury’s Laws of England Volume 3 Page 118 Paragraph 160; Ekwunife v. Wayne (West Africa) Ltd at page 445. This the applicant failed to do by proper pleading and acceptable evidence. d INTEREST DURING TRIAL AND UP TO PAYMENT:– The respondents Counsel concedes that the Tribunal has discretionary power, like a court of law, to award interest on judgment debt. That such an award becomes effective from e the date of judgment and not from the date of accrual of the cause of action or any other date before judgment. (Ekwunife v. Wayne (West Africa) Ltd Page 447 C–D). He submits that interest on judgment debt is 6% per annum. f ISSUE 5:– Whether the claim against the seventh respondent is competent and if so, what is the extent of its indebtedness to the g applicant? Submissions:– The seventh respondent, a foreign company, has no place of business in Nigeria. It entered a conditional appearance h on the ground, inter alia, that service on it through a director, who is confined in the prisons at Oko, in Benin City was irregular, void and of no effect. That the case against the seventh respondent was initiated without compliance with i due process of law regarding service of the application – a defect which is fatal to the application. That the seventh respondent being a company, not having a place of business in Nigeria cannot be served through a director in respect of a j cause of action which arose out of the jurisdiction of the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 624 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Federal High Court. The transaction was between Kapital a Merchant Bank Ltd, London, and the seventh respondent, also a London based company. The respondent contends that Order X Rule 8 of the Federal High Court Rules must be b read along with Rules 11 and 12 of that order. Finally on the point it was submitted that by virtue of section 9 of the Federal High Court Act, Rule 27 of the rules of the Tribunal and Order 6 Rules 11, 12 and 13 of the High c Court of Lagos State (Civil Procedure) Rules, 1972 and Or- der X of the Federal High Court Rules service on it through the fourth respondent, not being specially ordered by the court, was irregular and void. The action against it is there- d fore incompetent. PROF. M. I. JEGEDE, LEARNED COUNSEL FOR THE APPLICANT SUBMITTED WRITTEN ADDRESS FOL- LOWED BY ORAL SUBMISSIONS BY HIS JUNIOR MR e AJOMO. Submissions:– Learned Counsel recalled that the applicant claims an ag- f gregate sum of N224,635,286.50 as at the 29th of February, 1996 as outstanding debit balances of the first three respondents and the sum of 36,555.27 US dollars due as at 7th Feb- ruary, 1994 from the seventh respondent. That the first–third respondents admit liability for an aggregate sum of g N102,864,229.29 while the seventh respondent’s admitted debt is 36,555.27 US Dollars. The respondents, however, dispute the accretion of any interest beyond the 21st of Janu- ary, 1994. h ON THE CONFLICTING FINAL FIGURES reached on both sides, the applicant’s claim represents the sum due as at 29th of February, 1996; just prior to the inception of the present action while the respondents’ figures represent the sums due i as at 21st of January, 1994; the date when the banking licence of Kapital Merchant Bank Limited was revoked vide exhibit FB1. The bank staff up-dated the last figures in the relevant ledgers to the 21st of January, 1994. They did so at j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 625 a the prevailing interest rates. The fourth respondent com- puted his figures based on an interest rate of 21% per annum from the 28th of October, 1993 to 21st January, 1994. The b issue arising submitted Counsel, is WHETHER THE AP- PLICANT IS ENTITLED TO MAKE A CLAIM FOR IN- TEREST ON DEBTS DUE BETWEEN 21ST OF JANU- ARY, 1994 AND 29TH OF FEBRUARY, 1996 AND AT c WHAT RATE? Submissions:– The duty to pay interest is an obligation with a corresponding right of the Bank to receive interest. It is therefore sub- d mitted that since it is not in dispute that interest has been accruing on the debts prior to the commencement of liquidation and the debts remain unpaid after the commencement of liquidation interest must and should accrue. It was held in e Musa v. Ehidiamhen (1994) 3 N.W.L.R. (Part 334) 554 at 557 that:– “the liquidation or winding-up (the two terms are used indiscrimi- nately) of a company is a process whereby its life is ended and its f property administered for the benefit of its creditors and members . . . a liquidator is appointed and he takes control of the company, collects its assets, pays its debts and finally distributes any surplus among the members in accordance with their rights . . .” g It is submitted finally therefore under this heading that where parties have agreed on interest from the onset, that interest must continue to accrue until the debt is paid. On the rate of interest from 21st January, 1994 it is sub- h mitted that the Central Bank of Nigeria the Monetary and Fiscal Guidelines for the year 1994 (exhibit FB.28) fixed the maximum rate of interest at 21% per annum and this rate should be applied. i Learned Counsel further submits:– Both the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree, 1994 and the Federal High j Court (Civil Procedure) Rules do not contain any specific [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 626 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. provision as to the award of interest on debts from the date a the cause of action arose until judgment. He urged that the Tribunal should award interest, from the date of liquidation using the bank’s interest rates as a guide in determining a b minimum. On this point, he referred to the dictum of Niki Tobi, JCA in R.E.A.N. v. Aswani Texiles (1991) 2 N.W.L.R. (Part 176) 639 at 671 which read as follows:– “The whole idea of interest is to compensate the successful party c who has been kept out of funds to which he legitimately owns. In determining the rate of interest accruing to the successful party, the Court must in the absence of a statutory rate or maxima, take into consideration the prevailing economic situation vis-à-vis the facts of the case. While current banking rate, particularly those d fixed by the central bank are a useful guide, they should remain only guides. They cannot be barriers. One can step over guides without causing any harm.” It is submitted in the alternative that reference may also be e made to the rules of practice and procedure for the time being in force in England (as at 1976 when the Federal High Court (Civil Procedure) Rules were enacted). The relevant provision is contained at paragraph 6/2/7 of the rules of the f Supreme Court, 1865 (1979 Edition) which incorporates section 3 of the Law Reform (Miscellaneous) Provisions Act, 1934 (England) which is reproduced hereunder insofar as material. g “In any proceedings tried in any court of record for the recovery of any debt or damages, the court may if it thinks fit order that there should be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date h the cause of action arose and the date of judgment: provided that nothing in this section.” Learned Counsel submits that by virtue of this provision, the Tribunal may award interest from the date of commence- i ment of liquidation up to the date of judgment. As to the applicable rate, in England the court is guided by the commercial rate, which is the rate at which the applicant would have to go out and borrow the money. He submits that in Nigeria, j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 627 a that rate has been 21% per annum since January, 1994 but that prior to this enactment, the common law position (applicable in Nigeria) also entitled a creditor to an award of b interest after the commencement of winding-up until the winding-up order was made. He then urged that the award of interest should be made in this action after the 21st of Janu- ary, 1994 until judgment at the rate of 21% per annum. c ISSUE 11:– Whether the applicable interest rate chargeable on the debts of the respondents over the period ending 31st De- cember, 1993 was 21% per annum (as contended by the d fourth respondent). The Monetary circulars for the years 1993 and 1994 were tendered as exhibits FB27 and FB28, respectively. e On interest rate for 1993, FB27 stipulated at page 7 paragraph 5 as follows:– “In line with policy of interest rate deregulation banks deposit and lending rates will continue to be market determined.” f For the period ended December, 1993. The Monetary Circu- lar for 1994 – exhibit FB28. At pages 3–4 stated that:– “Interest rates rose to unprecedented high levels in 1993” ——— prime lending rates ranged from 26% to 60% for Commercial g Banks and 42% to 80% for Merchant Banks. Learned Counsel concluded from the quoted statistics that the respondents were not entitled to apply a rate of the 21% per annum in respect of their borrowings up until the 31st of December, 1993; h as done in their computation – exhibit FB24. Mr Ajomo concluded: “I urge the Tribunal to discountenance this and make an award in line with the up-dated Ledgers – exhibits FB3, 7 and 9 where in the deregulated interest rates were applied.” On the amount claimed by the applicant vis-à-vis the amount i admitted by the respondent, learned Counsel urged that the applicant’s figures be preferred and gave reasons. “The evidence of the applicant has been essentially documentary based on the records kept by Kapital Merchant Bank Limited j under the control and direction of the fourth respondent. The [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 628 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

documents stand unchallenged. It is urged upon the Tribunal to a uphold the applicant’s claim in its entirety.” Finally, in reply to the objection raised against service on the fourth respondent for the seventh respondent, learned b Counsel Ajomo submitted that the service was in order. That the service in respect of seventh respondent Company, was properly effected on the Director within the jurisdiction. Or- der 10 Rule 8 of the Federal High Court (Civil Procedure) c Rules authorises service on any director or by leaving the process at the corporate office of the company. The respondents have waived any right to object to service having participated in the proceedings for that long till this stage. d TRIBUNAL: The arguments by learned Counsel as to whether this application was properly brought in the name of NDIC – the liquidator of the Failed Bank is resolved by reference to section 11(1) of Failed Banks etc Decree, 1994 and e Paragraph 2 of Schedule 1 to the Decree which provides thus:– Section 11(1):– “An application for the recovery of a debt owed to a failed f bank shall be brought before the Tribunal by the receiver or liquidator of the failed bank and where there is no receiver or liquidator, by a person appointed by the Central Bank of Nigeria or the Nigeria Deposit Insurance Corporation.” Paragraph 2 of schedule 1:– g “(1) Application for the recovery of debt owed to a failed bank shall be made by the Receiver or Liquidator in Form A as set out in the Appendix to this Schedule leaving it in . . ..” h The above provisions empower the liquidator to institute an action for the recovery of debt. The application if brought in the name of the liquidator as done in this case is to my mind proper. i My judgment shall take into account other main legal points raised. I shall consider next the question of INTER- ESTS chargeable on debts owed to failed banks as at date of closure of the bank and thereafter. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 629 a ISSUES AS TO INTEREST DUE The issue of interest raised by both learned Counsel is very crucial in the determination of the actual debt owed by the b first, second, third and seventh respondents to the Failed Kapital Merchant Bank Plc (“KMB”). It is not in dispute that interest is due and payable on all c outstanding debts to the bank as at 21st January, 1994 when the banking licence was revoked. However, the applicable RATE and DURATION of the interests charged by the applicant are disputed. The respondents submitted to 21% interest rate from the date of last entries in the ledger cards to d the date (21st January, 1994) when the banking licence was revoked. The applicant contended that the higher rates of interest charged as at 31st December, 1993 (during the deregulation period ending in December, 1993) were the prevailing e rates of interest and ranged between 42 and 80% for Mer- chant Banks. The applicant in this regard relied on the Monetary and Credit Policy Guidelines exhibit FB 28. f The applicant in updating the last entries in the ledger did not specify the actual rates of interest used in computing the interest charged for the period of deregulation ending 31st December, 1993. It is recalled that PW1 said that during the g deregulation period which was from 1986 to December, 1993, banks were allowed to charge any percentage of interest on overdrafts and that the banks were free to negotiate the rate with their customers. Nevertheless, he failed to state the rate of interest agreed upon and/or charged against the h respondents in updating the outstanding balances up to the end of December, 1993. Where practices are agreed (as in this case) that payment of interest was contemplated or agreed upon, the interest is claimable as of right. It is also i the requirement of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994. Sections 3(1) and 9 of the Decree empower the Tribunal to recover debts owed to Failed Banks which remain out- j standing as at the date the bank was closed or declared a [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 630 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Failed Bank. Debts by definition under the Decree include a interest. The rate of interest and duration of the interest are matters to be pleaded and established. To this end I find so- lution in the cited case of Ekwunife v. Wayne (W/A) Ltd b (1989) 5 N.W.L.R. (Part 122) 422. The Supreme Court dealt exhaustively on how a claim for interest should be established. The exposition of the law on the claim for interest could be summarised as follows: At page 445 per Agbaje, c JSC:–

“Interest may be claimed as a right where it is contemplated by the agreement between the parties, or under a mercantile custom or under a principle of equity . . . where interest is being claimed as a d matter of right, the proper practice is to claim entitlement to it on the writ and plead facts which show such an entitlement . . . adju- dication on the plaintiff’s right to interest in such a case is, like any other issue in the case, based on the evidence placed before the court. The evidence called at the trial will also establish the e proper rate of interest and the date from which it should begin to run- whether from the accrual of the cause of action or otherwise.”

It was further stated that power to award interest on a judg- f ment debt rests on a different principle. It is at the discretion of the court to award it or not. Interest on judgment debt takes effect from the date of judgment and not before.

Guided by the above principles I shall now proceed to de- g termine the outstanding debts of the 4 respondents under 3 periods bearing in mind that:–

1. The interest charged by the applicant as at 31/12/93 h was disputed.

2. That interest of 21% per annum charged on debts outstanding from 1st January, 1994 to the date the bank i was closed on 2nd January, 1994 is not in dispute.

3. The interest charged for the period after 2nd January, 1994 and the date of filing of this action on 29th Feb- ruary, 1996 which is seriously disputed. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 631 a RATE OF INTEREST AS AT 31/12/93 I shall now consider the first area of disagreement between parties as to the rate of interest chargeable on debts due as at b 31st December, 1993. The respondents contend that the rate of interest on the outstanding debt before the 1st January, 1994 should attract not more than 21% interest and that the applicant charged higher unspecified rate. The applicant c contends that the rate prevailing as at December, 1993 during the deregulation period was applied to the debts outstanding against the respondents. The applicant however failed to plead in the application or establish in evidence the d rate of interest used, it is not enough to plead a lump sum as representing principal and accrued interest (as done here) without stating the amount of interest and the rate of interest applied. Some of the ledger cards tendered indicated various rates of interests which were not explained or relied upon in e evidence. The credit files containing details of the debts which PW1 said the applicant took over from the bank, were not tendered to establish the agreed rates of interest on each transaction. The applicant failed to plead or establish in evi- f dence the specific rates applicable to the particular facilities granted the respondents during the deregulation period ending December, 1993. Evidence was led to show that in 1993 when the policy of interest deregulation subsisted, the pre- g vailing lending rates were market determined. That the implementation of the policy worked untold hardship and posed serious problems to the economy as was acknowledge and highlighted by the Central Bank of Nigeria in its mone- h tary circular exhibit FB28 at pages 4–5. Some of the problems identified included the resultant unstable interest rates which rose to unprecedented high levels in 1993 with prime lending rates ranging from 26 to 60 percent for Commercial Banks and 42 to 80 percent for Merchant banks. The Federal i Government having identified the problems decided to evolve what was described as “a more appropriate interest rate structure” for a “more investor friendly regime”. The 1994 interest rate of 21% that followed became applicable j from 1st January, 1994. I am however, being urged by the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 632 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. applicant to endorse the charging of interest based on the a 1993 interest rate ranging between 42–80 percent in updating balances as at December, 1993. The interest rate used is not pleaded or proved and it would be impossible to ascer- b tain such rates. It would be inappropriate and unconscionable of the Tribunal to apply or cause to be applied an unstable and unworkable interest rate that has since been discarded for its adverse effect. c Since no specific rate of interest has been pleaded or proved as applying to the loans as at December, 1993, the award of interest becomes a matter of discretion for the Tri- bunal. I shall use my discretion in allowing a rate I feel is d fair and reasonable. The respondent has made matters easy by submitting to the rate of 21% on the various outstanding loan debt balance as at the end of December, 1993. I shall allow that rate of interest of 21% up to 21st December, e 1993. That rate to my mind is both reasonable and generous. In that regard, it is to be noted that the applicant charged as low as 15% on the principal debt of N10,352.941 due as at 31st December, 1993 (deregulation period) on a term loan f account 30–1005 (exhibit FB 3E) as indicated in its letter of demand dated 2nd June, 1994 (exhibit FB 13) to the KSL Ltd. For the respondents to have submitted to a higher 21/% interest on all debit balances outstanding as at 31st Decem- g ber, 1993 is to my mind accommodating. The 21% rate shall be applied by the Tribunal. Consequently, I shall accept the calculations of interest made by the fourth respondent in exhibit. FB 24 based on 21% interest rate. h INTEREST DUE AS AT 21/1/94 It is common ground among parties that the rate of 21% was chargeable on all debts outstanding from 1st January, 1994. The CBN Monetary Guidelines to that effect are in i exhibit FB 28. The maximum lending rate inclusive of all charges was fixed at 21% per annum. The rate applies to all loans and advances, equipment leasing among others (see page 5 of exhibit FB28). Since the same rate has been held j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 633 a applicable to debts outstanding as at 1st January, 1993, the rate shall be applied in updating the debts outstanding during the deregulation period ending December, 1993 and shall b continue till 21st November, 1994 when the banking licence of the bank was revoked. The interest payable after 21st January, 1994 is a matter of controversy which will be determined later. For now, I shall c tabulate the calculations made by the fourth respondent showing how the sums admitted were arrived at and showing that the applicant merely claimed lump sums. The calculations of the fourth respondent on each account vis-à-vis the d applicant’s claim on each account are shown in the table that follows. KAPITAL SECURITIES DATE A/C NO. INTEREST CLAIM BY DEBTS e CALCULATED BY APPLICANT – CALCULATED and 4TH RESPS FOR NDIC ADMITTED BY KSL RESPS KSL N N 30/10/93 50–1047 Balance B/F 13,865,967.54 12,402,465.13 to Int. At 21% p.a. 83 592,260.20 21/1/94 Days f 13,865,967.54 2,994,725.33 30/10/93 50–1120 Balance B/F 1,449,854.70 1,287,462.63 to Int. At 21% p.a. 83 61,480.80 21/1/94 days 1,449,854.70 1,348,943.43 31/12/93 30–1005 Balance B/F 28,682,716.47 18,074,272.12 g to Int. At 21% p.a. 21 218,376.81 21/1/94 days 28,692,716.47 18,292,649.93 4/10/1991 30–1–23 Balance B/F 4,519,154.00 2,763,912.30 Int. At 21% p.a. 840 1,335,764.50 days h 4,519,154.00 4,099,676.50 23/12/92 66–1–15 Balance B/F 359,100.00 225,000.00 to Int. At 21% p.a. 394 51,004.00 21/1/94 days 359,100.00 276,004.00 41–1100 44,306,875.21 44,306,875.21 39–5001 60,368.43 60,368.43 i 19–5100 14124566.23 DENIED 60–1105 6077831.15 DENIED

j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 634 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

BUTLER NIGERIA LIMITED a DATE A/C NO. NARRATIVE CLAIM BY AMOUNT APPLICANT-NDIC ADMITTED BY RESPONDENTS N Nb 30/10/93 50–1118 Balance B/F 4,516,824.16 4,010,913.85 to Int. At 21% p.a. for 85 196,150.17 21/1/94 days 4,516,943.64 4,207.063.02 30/6/93 30–1011 Balance B/F 21,195,943.64 10,871,313.41 to Int. At 21% p.a. for 1,413,568.05 c 21/1/94 205 days 21,195,943.64 1278710.56 25/7/93 39–5004 Lease 1,2,284,881.46 1,985,482.38 KAPITAL INVESTMENT LIMITED DATE A/C NO. NARRATIVE CLAIM BY AMOUNT d APPLICANT-NDIC ADMITTED BY RESPONDENTS N N 30/9/93 50–1120 Balance B/F 4,398,893.66 3,717,983.85 to Int. At 21% p.a. 242,864.43 21/1/94 for 113 days e 4,398,893.66 3,960,848 30/9/93 50–1151 Lease 392,693.61 331,908.12 From the table it is apparent that the calculations of the fourth respondent on most of the accounts is painstaking and meticulous. He detailed on each account the balance brought f forward at a particular date, applied the appropriate 21% interest per annum over the actual number of days involved in ascertaining the amount of accrued interest and adding same to the principal in arriving at the outstanding admitted debts. g The applicant failed to embark on such an exercise to establish its claims on each account. As earlier indicated, I shall accept the calculation made by the fourth respondent on behalf of his companies except in areas of serious controversy h or apparent miscalculation. The following admitted figures as calculated on the 4 accounts below are accepted by the Tribunal as outstanding:– KSL Account Nos: i 50–1047 for N 12,994,725.33 50–1122 for N 1,348,943,43 30–1023 for N 4,099,676.80 66–1015 for N 276,006 j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 635 a Added to the above are the sum claimed by the applicant on KSL accounts which were not disputed:– 41–1100 for N 44,306,875.21 b 39–5001 for N 60,368.43 I find the above debts in the stated 6 accounts outstanding against KSL as at 21st January, 1994. c The disputed debts in the remaining four accounts of the first respondent company, the three accounts of the second respondent and the two accounts of the third respondent containing figures which are disputed will be considered next. d DISPUTED DEBTS ACCOUNT NO. 19–5100 e Account 19–5100 is for N14,124,566.23 claimed as outstanding debit balance against KSL as at 21st January, 1994. It was disputed by the fourth respondent who claimed that the amount is part of the undisputed N44,306,875.21 out- f standing on account 41–1100 for the purchase of No. 2, Cooper Road Property, Ikoyi. SUBMISSIONS g The applicant’s Counsel submitted that the ledger cards entries and the dealer slips showing the sums placed by the bank with KSL discharge the onus of establishing indebtedness and that the burden had shifted on the respondents to establish that the sums placed vide the slips had been repaid. h That the respondents failed to establish that the sum claimed is a duplication of the sums placed by the bank with KSL for the purchase of the Cooper Road, Ikoyi property. The respondents’ Counsel on his part submitted that the ledger i card entries which show “nil” balance supports the respondent’s defence that the amount in question was not outstanding. On the dealers slips stapled on the ledger, he submitted that the fourth respondent has shown that they were j raised in respect of part of the placements with KSL in [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 636 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. respect of Cooper Road transaction and forms part of the a undisputed N44,306,975.21 amount on relevant account 41– 1100 for the cooper road transaction. I have carefully examined the accounts and observed that b the two subsidiary ledger cards raised were tendered in evidence but the entries were very sketchy and uninformative. The first ledger exhibit FB 3C stated: Account No. 19–5100, Account Title D/F/D/B – K.S.L. Date: 4/1/93 B/F Balance c N14,124,566.23. Twelve dealer slips dated 21st February, 1991 exhibits C1–C12 show various sums placed by the bank with KSL d totalling the amount stated in the ledger. In the second ledger card, the same amount was brought forward (in red) on the same 4th April, 1993. By the second entry made on 21st January, 1994 the account was credited with the same amount while the balance was recorded as “NIL”. I do not e understand how a “NIL” balance could be construed to mean debit balance. PW1 tried unsuccessfully to explain how a “NIL” balance could be evidence of indebtedness. The submissions on the point by the learned Counsel for the respon- f dents is sustained when he said that the applicant has failed to establish by the last entries of 21st January, 1994 in the ledger that the account was overdrawn or in debit. It is my finding that the ledger opened for account 19–5100 did not g support the applicant’s claim that any amount is owing on the account. The dealer slips, exhibits FB 3, pages C1–C12, show the h sums placed by FMB with KSL which on 21st February, 1991 totalled the said sum of N14,124,566.23. The twelve placements were made the same day. It is not disputed that no repayment of the amount “placed” had been effected by KSL. The dealer slips were not cancelled to suggest they had i been settled and no more outstanding. Indeed the placements are still outstanding and constitute a debt to the bank. The submission by the learned Counsel for the applicant is sustained when he said that the entries in the dealer slips prove j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 637 a the first respondent’s indebtedness in the sum involved totalling the N14,124,566.23. The respondent’s defence is supportive of that fact. The fourth respondent said the amount b forms part of the unpaid placements of N44,306,875.21 in respect of the purchase of the Cooper Road, Ikoyi property purchased by KSL from the funds placed by the bank with KSL. The fourth respondent was not able to satisfy the Tri- c bunal that the sum due on the 12 dealer slips related to the said transaction. He tendered series of documents in a bid to establish a nexus between the transactions. For example, he tendered as exhibits FB17(a) and FB18(a) showing various placements totalling N51 million for the purchase of the d property out of which the undisputed balance of N44 million is still outstanding and being claimed on a different account no. 41–1100. The fourth respondent failed to connect the 12 dealer slips to the property transaction. This fact he admitted e under cross-examination when he said that the two transactions cannot be easily married. The fact is however established on both sides that the dealer slips prove a total indebtedness of N14,124,556.23 which is still outstanding. The f problem that now arises is that the debt is neither owed on account 19–5100 nor shown to form part of the N44,306.875.21 owed on account 410–1100. In my judgment, I find that insofar as the applicant has successfully es- g tablished that the debt is till outstanding and which the respondent admitted was due from KSL to the failed bank, it becomes a recoverable debt against KSL in favour of the bank. Even if the amount owed formed part of a larger sum h outstanding on a different account 41–1100 it would make no difference to its recovery. The debt did not merge in or form part of the amount claimed on account 41–1100 or is it owed on account 19–5100 under consideration. The amount i is owed on the dealer slips exhibits FB3C1–C12. In conclusion I find that the total sum of N14,124,566.23 deposit placed with the first respondent as evidenced by 12 dealer slips exhibits FBC1–C12 is outstanding against the j first respondent (KSL) as at 21st January, 1994. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 638 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

ACCOUNT NO. 30–1005 a On this Account No. 301005, NDIC claims N28,192,716.47 due as at 21st January, 1994. The amount of N18,292,648.72 is calculated by the fourth respondent as b due – see his exhibit FB 24 at page 3. The calculation of the fourth respondent appears to be wrong. The applicant through PW1 showed clearly that the total of N28,692,716.47 claimed comprised of the principal sum of c N10,352,941 and interest of N18,094,272.12, respectively as at 31st December, 1993. The sums are correctly stated both in the Ledger Card, exhibit 3E, and the statement of account exhibit FB13 which the fourth respondent himself tendered. d The covering letter dated 2nd June, 1994 was addressed by NDIC to the fourth respondent (as the then Managing Direc- tor of KSL) notified him thus:– “Photocopy of your loan ledger as at 31/12/93 showing Principal e outstanding of N10,352,941 debit and interest of N18,094,272.12 debit: when updated to 21/1/94 at 15% per annum gives a total of N28,692,716.47 debit.” The fourth respondent’s company is KSL liable to pay the f total sum of N28,692716.47 claimed as debt as at 21/1/94. The amount is proved by the ledgers exhibits FB3 and statement of account served on the fourth respondent exhibit FB13. The lower amount admitted by KSL is accordingly g rejected. ACCOUNT NO. 60–1105 The next controversial KSL account is No. 60–1105 show- h ing a debit balance of N6,077,831.15. That debit balance is shown in the Status Report, exhibit FB 4, prepared by PW1. He stated at page 2 of the report that the account was “overdrawn KSL term deposit Account with KMB reclassified as loan”. He certified at the foot of exhibit FB 4 that the figures i were extracted from the ledger cards. I have scrutinised the relevant ledger card, exhibit FB 3D, which confirmed the applicant’s claim. The last entry reads debit balance of N6,077,831.15 as at 31st December, 1993. The fourth j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 639 a respondent’s evidence is that the account ought to be in credit. I disagree. The said amount is found by the Tribunal to be outstanding against that account as at 31st December, b 1993. The same amount is claimed by the applicant as balance due as at 21st January, 1994 – see page 2 of the Status Report, exhibit FB4. The amount as claimed is allowed. BUTLER NIGERIA LIMITED c 1. OD ACCOUNT NO. 50–1118 As at 31st Ocober, 1993 the debit balance on the account as shown in the ledger card exhibit FB–7A page d 11 is N4,010,913.85. NDIC updated the account to 21st January, 1994 by charging interest at 21% per annum to get the N4,516,824.16 claimed. The fourth respondent counted the days between 30th October, e 1993 and 21st January, 1994 to arrive at 85 days. He calculated the interest due on the amount at the same rate of 21% for 85 days to arrive at the interest sum of N196,150.17 which he added to the N4,010,913.85 to f get the admitted N4,207,063.02. The amount is shown as outstanding on the account as at 21st January, 1994. The applicant’s witness on the other hand failed to establish how the balance of N4,516,824.16 g claimed was arrived at. The calculation of the fourth respondent is satisfactory and shall be accepted. The outstanding balance on the account as at 21st January, 1994 as calculated by the fourth respondent is accepted by the Tribunal. h 2. TERM LOAN ACCOUNT NO. 30–1011 Amount claimed by the applicant as at 21st January, 1994 is N21,195,943.64 as against the fourth respon- i dent’s admitted figure of N12,284,881.46. The ledger card, exhibit FB–7B, shows certain figures up to 31st December, 1993 which were altered, mutilated and added up in such a manner that one cannot easily de- j cipher the actual figure due under the column [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 640 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

“balance outstanding”. The last entries are unreliable. a The situation was salvaged by the fourth respondent who produced and relied on the balance stated in the demand letter written by KMB to him in respect of b the outstanding amount as at 30th June, 1993. The letter of demand is exhibit FB 3OB dated 1st July, 1993. In it, the total outstanding amount claimed was N10,871,313.41 being Principal and Interest due as c at 30th June, 1993 to 21st January, 1994. The fourth respondent admitted this figure. The amount was updated from 30th June, 1993 to 21st January, 1994 (205) days) at 21% interest in arriving at the sum of d N12,284,381.46 admitted as due on the account as at 21st January, 1994. The amount shall be accepted by the Tribunal as the applicant failed to adduce more credible evidence to establish its claim. e 3. LEASE ACCOUNT NO. 39–5004 This is a lease account with debit balance of N1,278,710.56 in the Ledger Card (exhibit 7C page 3) f as at 22nd April, 1993 (the last date of entry in the ledger). The applicant claims N1,226,210.56 as at 21st January, 1994. The fourth respondent claimed that the sum of N1,085,487.38 is what is due as at g 25th July, 1993 as conveyed to him in the letter of demand by the bank dated 20th August, 1993 (exhibit FB 21). The applicant’s status report (exhibit FB 8) shows an outstanding N1,226,210.56 as at 21st Janu- h ary, 1994. The Ledger Card used in calculating that figure is not among those tendered by the applicant in evidence. The amount is therefore not proved and the Tribunal will accept the figure in the letter of demand by the Kapital Merchant Bank to Butler exhibit FB 21 i relied upon by the respondent. It was clearly stated therein that N1,085,487.38 was the total sum on the lease facilities as at 25th July, 1993. The figure is accepted. The respondent further stated that the facility j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 641 a granted being a lease does not attract interest as interest had already been built into each instalmental rental payable. The evidence was not disputed and I shall b accept as established the amount so admitted. Amount outstanding as debt on the said account 39– 5004 is found to be N1,085,482.38 as at 21st January, 1994. c KAPITAL INVESTMENTS LIMITED 1. ACCOUNT NO. 50–1120 One account 50–1120 overdraft, the applicant in the d Status Report, exhibit FB-10, claimed N4,398,893.60 as at 21st January, 1994 while the third respondent admits N3,960,848 due at the same date. The last entry in the Ledger Card exhibit 9A confirms the appli- e cant’s figure. The fourth respondent did not back his figures with any letter of demand this time around. I am accepting as authentic the amount claimed by the applicant as it is supported by the ledger entry. The f debt of N4,398,893.66 is found due on the account as at 21st January, 1994. 2. ON ACCOUNT NO. 50–1151 g The applicant claimed as outstanding the sum of N392,693.61 while the fourth respondent admits N331,908.12 and concedes no interest since the account is designated “lease”. The balance claimed by the applicant is supported by the ledger entries exhibit h FB9B page 3 and I shall accept N392,693 shown in the ledger as proof of the outstanding debt on the account as at 21st January, 1994. The details in the ledger cards however show that it was an overdrawn) i and not lease) account and that interest on the O/D account was being charged right from the beginning of the entries in 1992. The amount now claimed is inclusive of interest of 21% per annum up till 21st j January, 1994. The debt outstanding on the account is [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 642 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

proved to be the N392,693.61 claim as at 21st Janu- a ary, 1994. BOOMGAIN LIMITED – seventh respondent b An objection raised against the service of processes in this action on the fourth respondent on behalf of his foreign company, Boomgain Limited, is not sustainable. The service of the processes meant for the company on its director – the c fourth respondent within the jurisdiction of this Tribunal is in my view in order. It accords with the requirement of Or- der X Rule 8 of the Federal High Court (Civil Procedure) Rules which allows processes against a corporate body to be d served on any of its directors. The fourth respondent at every stage of these proceedings associated himself fully with the seventh respondent company. He said the company was formed and promoted by him. He tendered exhibit 25 to show that correspondence from American Express Bank e Limited (AMEX) of London relating to Boomgain’s indebtedness were directed to him in Nigeria. The fourth respondent caused his bank (KMB Plc) to guarantee the payment of Boomgain’s debt to AMEX and executed (as the Manag- f ing Director of the bank) the guarantor’s undertaking. He was the alter ego of the company and as his reply to this action supported that fact when he averred that “he alone is familiar with the transaction” between the banks regarding g Boomgain’s debt. I consider that the service on the fourth respondent, in his capacity as a director of his London based company Boomgain Limited, is tantamount to service on the company. In the circumstances of this case, the service is h proper. Ascertaining the amount due from Boomgain Limited to KMB Limited is simplified by the consensus reached on both sides that the sum of USD $36,555.27 is now out- i standing on the account as at 19th March, 1996. The amount represents principal and interest. It is a debt owed to a failed bank which the Tribunal is empowered to recover. The original amount claimed under this head was j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 643 a USD $66,555.27 US dollars but later reduced by part- payment to USD $36,555.27. Consequently paragraph 12(c) of the application was amended to read that the seventh re- b spondent Boomgain Ltd is indebted “in the sum of USD $36,555.27 together with accruing interest at the prevailing rate since February, 1st 1994”. There shall be judgment in that sum – against the seventh respondent jointly and sever- c ally with the fourth respondent. The prevailing interest rate on foreign transaction is shown by PW1 to be 10.5% and not disputed by the respondents. ORDER:– d Judgment against the seventh and fourth jointly and severally in one sum of $36,555.27 with 10.5% interest accruing from 19th March, 1996 (as amended). e SUMMARY OF DEBTS ADJUDGED AGAINST FIRST, SECOND, THIRD AND SEVENTH RESPONDENTS Below is the summary of debts due from the first, second, third and seventh respondents as on the account numbers f against each. SUMMARY OF DEBTS FUND DUE AS AT 21/11/94 A. KAPITAL SECURITIES LIMITED g S/NO. ACCOUNT. AMOUNT IN NAIRA N 1 50–1047 N 2,402,465.13 2 50–1122 1,348,943.43 h 3 30–1005 28,692,716.47 4 50–1023 4,099,676.80 5 66–1–15 276,004 i 6 41–1100 44,306,875.21 7 39–5001 60,368.43 8 19–5100 14,124,566.23 9 60–1105 6,077,831.15 j TOTAL ON 21/1/94 N111,389,446.90 [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 644 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

B. BUTLER (NIG.) LIMITED a S/NO. ACCOUNT NO. AMOUNT IN NAIRA N b 1 50–1118 4,207.063.02 2 30–1011 12,284,881.46 3 39–5004 1,085,482.38 TOTAL ON 21/1/94 N17,577,426.86 c C. KAPITAL INVESTMENT LIMITED S/NO. ACCOUNT NO. AMOUNT IN NAIRA N 1 50–1120 4,398,893.66 d 2 50–1150 392,693.61 TOTAL N4,791,587.27 D. BOOMGAIN LIMITED e AMOUNT OF US DOLLARS DUE AS AT 21/1/94 (Amended to 19/3/96) USD $36,555.27 ARGUMENTS ON INTEREST BEYOND 21/1/94 f I have ascertained the debts outstanding against the first, second, third and seventh respondents as at 21st January, 1994 when the banking licence of the bank was revoked. I shall now consider the submissions made for and against the jurisdiction of the Tribunal to adjudicate debts outstanding g beyond that date. The Learned Counsel for the respondents submitted that by the revocation of the banking licence of the Kapital Merchant Bank Plc on 21st January, 1994 the banking business of the bank had terminated. He said that h the debts recoverable are limited to those accruing as at the date of closure and not beyond. He relies on sections 9, 11(1), 12, 13 and 29 of Failed Banks Decree emphasising that only debts due as at the date of closure of the failed i bank are recoverable. Learned Counsel for the applicant submitted that insofar as the debts outstanding as at the date in question remain unpaid the bank would be entitled to continue charging interest j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 645 a until the debts were amortised. That the commencement of liquidation does not terminate the life of a company or debts due to it. That where as in this case the parties agreed from b the onset that interest was payable, the interest must continue. That CBN guidelines on interest rates as at the 1st January, 1994 should be applied. I have already in this judgment made reference to the submissions of both learned c Counsel on the question of interest. ON THE AWARD OF INTEREST The Failed Banks Decree empowers the Tribunal to award d interest on any debt owed to a failed bank. Section 29 defines “debt” in these words:– “any loan, advance, credit accommodation, guarantee or other credit facility together with interest thereon with remain outstanding and unpaid against a customer of a bank in favour of a e bank.” In this judgment the amount owed the failed bank by the first, second third and seventh respondents with accrued in- f terest as at 21st January, 1994 have been ascertained. The question that now arises for determination is whether the debt continues to accrue interest after the revocation of the banking licence and until payment. There is no direct authority cited on that poser. An examination of the provisions g of the decree empowering the award of interest will be useful. Sections 3(1)(a) and 9 of the Decree:– h “3(1) The Tribunal shall have power to:– (a) recover, in accordance with the provisions of the De- cree, the debts owed to a failed bank, arising in the ordinary course of business and which remain out- i standing as at the date the bank is closed or declared a failed bank by the Central Bank of Nigeria; 9. Notwithstanding anything to the contrary in any law, deed, agreement or memorandum of understanding, the Tribunal shall have exclusive jurisdiction to hear and determine all j matters brought before it concerning the recovery from [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 646 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

any person of any debt owed to a failed bank, which re- a mains outstanding as at the date of closure of the failed bank.” The provisions of the Decree as reproduced are self explana- b tory unambiguous and explicit. The power of the Tribunal (to recovery debt which by definition is inclusive of accrued interest) is exercisable where:– 1. The debt is owed to a failed bank. c 2. The debt arose in the ordinary course of business of the bank. 3. The debt remained outstanding as at the date the bank is closed or declared a failed bank by the Central Bank of Ni- d geria or as at the date of closure of the business of the Failed Bank. The third requirement was the subject of argument between learned Counsel. My understanding of the combined effect e of the above sections read along with the definition of the word “debt” is that any debt outstanding to a failed bank as at the date of closure of the bank, becomes immediately due and enforceable as at the date irrespective of any arrange- f ment or law to the contrary. It affords a cause of action for the recovery of the debt with effect from the date of failure of the bank. If the outstanding debt remains unpaid interest thereon continues to run but interest rate should, in my view, g be a matter for the Tribunal to determine in its discretion and as deemed fit having regard to the circumstance of each case. In the case of failed bank, the termination of the normal banking business of the bank by its involuntary closure h by the CBN and appointment of a liquidator have introduced novel phenomena to the banking industry and with its atten- dant consequences. The existing relationship of banker and customer is difficult to define, their right and liabilities become difficult to ascertain. Previous arrangements or agree- i ments entered into for the repayment of loan and interest become displaced after the date of closure. Even now banks resort to exercising their rights of WAIVER of part of accrued interest in deserving cases in order to realise sufficient j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Deposit Insurance Corporation v. Kapital Securities Ltd 647 a funds to meet their obligation to customers, creditors and depositors. The circumstances of the indebtedness such as: whether arising from normal or improper banking business b should affect the rate of interest awardable. In awarding the rate of interest in this case on hand, I remember that the applicant’s claim is 21% (compounded) from when the action was filed (29th February, 1996) until c judgment and until the payment of the various sums claimed. It is also recalled that an amount in excess of the debts claimed had since April, 1996 been realised pending further order of this Tribunal. It is on record that, sequel to d previous orders of this Tribunal made in the judgment on the criminal charge FBT/BZ/3C/95 (1997) 1 FBTLR 191 against the fourth respondent, the property at No. 2 Cooper Road, Ikoyi Lagos bought in the name of KSL with the e funds of the bank was surrendered by the fourth respondent. Pursuant to section 20(4)(b) of the Failed Banks Decree, the property was ordered to be sold by public auction. It was sold for N280.2 million. The interim account rendered as f ordered is before the Tribunal. The property is shown to have been sold April 26th, 1996 and proceeds paid over to the applicant NDIC. From the said date – 26th April, 1996 the fourth respondent and his companies are deemed to have g settled their indebtedness and therefore, no interest shall be awarded beyond that date. The Tribunal shall award interest only up to 26th April, 1996. h The rate of interest which I consider reasonable to ward shall be 21% SIMPLE INTEREST per annum from 22nd January, 1994 (the day after closure of the bank) to 29th Feb- ruary, 1996 when this application was filed. That rate shall be paid on debts adjudged against the first and third respondents. i For the remaining period from 1st March, 1996, simple interest at the rate of 10% per annum is awarded.

As for Boomgain Limited, the seventh respondent owing j in US Dollars the interest rate of 10% per annum is awarded [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 648 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. with effect from 19th March, 1996 to terminate on 26th a April, 1996. The table below shows the final picture of the debts and interest adjudged against the respective respondents. b S/NO.COMPANYA/C NO. AS AT 21/1/94 NDIC’S AMOUNT INTEREST ADMITTED CLAIM AS AT ADJUDGED AWARDED DEBTS 21/1/94 DUE STATUS REPORTS c N N N 1 Kapital 50–1047 12,994,725.00 13,865,967.54 12,402,465.13 Securities 50–112 1,348,943.40.00 1,449,854.70 1,348,943.4321%simple Limited 66–1015 276,004.00 359,100.00 276,004.00interest 39–5001 60,368.43 60,368.43 60,368.4322/1/94– 30–1005 18,292,648.00 28,692,716.47 8,692,716.4729/2/96 d 41–1100 44,306,875.21 44,306,875.21 44,306,875.21AND 10% Dealers simple inter- . . . Slips 14,124,566.23 14,124,566.23est 1/3/96– 60–110 . . . 6,077,931.15 6,077,931.1526/3/96 30–1023 4,099,676.80 4,519,154.00 4,099,676.90 80,106,070.60 113,456,433.73 111,389,446.90 e 2 Butler 50–1118 21% simple Nigeria 4,270,064.00 4,516,824.16 4,207,063.02interest Limited 30 30–1011 12,284,881.00 21,195,943.64 12,284,881.4622/1/94– (B.N.L) 39–5004 1,085,482.38 1,278,710.56 1,085,482.3829/2/96 AND 10% simple interest 1/3/96– f 17,577,420.38 26,989,477.00 17,577,426.8626/4/96 3 Kapital 50–1120 3,960,848.00 4,398,993.66 4,398,893.66 DITTO Investment 50–1151 331,486.00 392,693.61 392,693.61 Limited 4,292,334.00 4,791,587.27 4,791,587.27 4 Boomgain 10% simple Limited interest g 19/3/96– $36,555.27 26/4/96 TOTAL 101,975,843.98 145,237,498.00 133,758,461.10To be calculated and ascertained by the par- h ties [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Nigeria Dep Insur Corp v. Frank and Frank Construction Co Ltd 649 a Nigerian Deposit Insurance Corporation v. Frank and Frank Construction Co Limited and Others b FAILED BANKS TRIBUNAL, BENIN ZONE MOMOH J

Date of Judgment: 12 DECEMBER 1996 Suit No.: FBT/BZ/16/96 c Failed Banks Tribunal – Recovery of bank loan – Whether a judgment debt awarded a banker by the High Court is recoverable by the Tribunal under the Failed Banks (Recovery d of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 – Whether the plea of res judicata could be raised by the judgment debtor in relation to the amount and interest claimed by the judgment creditor before the Tribunal e Facts The applicant – Nigeria Deposit Insurance Corporation in the main action is suing as Receiver/Liquidator of the New f Nigeria Bank Plc for the recovery of debts, pursuant to section 11 of the Failed Banks (Recovery of Debts) and Finan- cial Malpractices in Banks Decree No. 18 of 1994. The applicant/respondent claimed that the first respondent, Frank g and Frank Co was granted overdraft facility of N370,000 (Three Hundred and Seventy Thousand Naira) which remained unpaid. Consequently, the applicant/respondent instituted a legal action against the respondent at the High h Court of Lagos State for the recovery of the debt, and judgment was entered on 4th February, 1980 for the Bank in the sum of N374,612.16 with 5% interest up to the date of judgment. As at 29th December, 1995, the applicant respon- i dent now claimed before the Tribunal. The second, fourth, sixth, seventh, and eighth respondents in the 1st November, 1996 raised preliminary objection to the jurisdiction of the Tribunal to hear the application for j recovery of the said amount on the grounds that since the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

650 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. judgment of the High Court on the subject matter had never a been set aside or appealed upon, the judgment awarded by a court of competent jurisdiction was valid and the same matter could not be heard again by the Tribunal. The respondent b further argued that no action could be brought upon the judgment delivered more than 16 years ago by virtue of section 12(2) of the Limitation Law No. 88 of 1996. They also contended that the judgment was for the sum of c N374,612.15 with interest at 6% from 25th October, 1979 up till the date of judgment, i.e. 4th February, 1980 and the applicant/respondent could not claim interest beyond that date. d Alternatively, the applicant/respondent prayed for an order of the Tribunal striking out the applicant/respondents particulars of claim against the respondents/applicants for disclosing no reasonable cause of action. e Responding, the applicant/respondent stated that the Tri- bunal had jurisdiction under sections 3(1)(a), 9, 11(i) and 17 of the Failed Banks Decree to recover debt due to Failed Banks including judgment debt, notwithstanding any thing f in the law to the contrary and their failure to levy execution of the judgment within twelve years as prescribed by the Sheriff and Civil Process Act, judgment Enforcement Rules governing same. They further contended that the plea of res g judicata raised by the respondents’ Counsel did not apply in that the present action was brought by NDIC as Re- ceiver/Liquidator of NNB Plc for the recovery of N6,491,279.71 while the High Court case was instituted by h New Nigeria Bank Plc for the recovery of N374,612.16. Dismissing the preliminary objection, the Tribunal:– Held – 1. That the Tribunal had jurisdiction to recover judgment i debts awarded by the High Court in favour of a failed bank and such power was not impaired by any limitation period stipulated by any law, in the exercise of its powers and jurisdiction under the Decrees. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Nigeria Dep Insur Corp v. Frank and Frank Construction Co Ltd 651 a 2. The plea of res judicata could neither operate against the claim for interest accruing after judgment nor as an estoppel against the hearing and determination of the claim b for the interest and other related sums allegedly accruing after the date of the judgment of the High Court. Preliminary objection dismissed. c Cases referred to in the judgment Nigerian Ekwunife v. Wayne (W/A) Limited (1989) 5 N.W.L.R. (Part d 122) 422 at 446 Yoye v. Olubode (1974) 10 S.C. 209

Nigerian statutes referred to in the ruling e Failed Banks (Recovery of Debts) and Financial Malprac- tices in Banks Decree No. 18 of 1994 (as amended), sections 3(1)(a), 9, 11, 17, 18 and 29 Limitation Law Cap 69 Laws of Bendel State, 1959, section f 4(4)

Counsel For the respondents: Mrs F. Giwa Osagie g For the applicant/respondent: Chief K.S. Okeaya-Inneh (with him O.W. Idahosa) For the second, fourth, sixth, seventh and eighth respon- h dent/applicants: Mr G.C. Anyafulu For the fifth respondent: Mr Uche Nwokedi

Judgment i MOMOH J: The applicant – Nigeria Deposit Insurance Cor- poration in the main action is suing as Receiver/Liquidator of the New Nigeria Bank Plc for the recovery of debts, pursuant to section 11 of the Failed Banks (Recovery of Debts) j and Financial Malpractices in Banks Decree No. 18 of 1994. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 652 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The applicant disclosed in paragraphs 5, 6 and 11 of the a Application that the first respondent, Frank and Frank Con- struction Co Ltd, was granted overdraft facility of N370,000 (Three Hundred and Seventy Thousand Naira) which re- b mained unpaid. That the first respondent was sued to Court (the High Court of Lagos State) for the recovery of the debt, and on 4th February, 1980, judgment was entered for the Bank in the sum of N374,612.16 with 5% interest up to that c date of judgment. As at 29th December, 1995, the amount together with accrued interest rose to N6,491,279.07 which is now being claimed before the Tribunal. This motion filed on behalf of the second, fourth, sixth, d seventh and eighth respondents on the 1st November, 1996 raised a preliminary objection to the jurisdiction of this Tri- bunal to hear the Application for recovery of the said amount. The grounds of objection are reproduced from the e motion paper. GROUNDS OF OBJECTION: “1. That the Overdraft of N370,000, the applicant/respondent f granted the first respondent – Frank and Frank Construction Co Ltd sometime in 1979, had been the subject of a Law Suit in Suit No: LD/1264/79 at the Lagos High Court, between the applicant/respondent and first respondent, in this Suit, the Court of competent jurisdiction delivered judg- g ment on the 4th day of February, 1980. The said judgment has never been set aside or appealed upon and therefore is still valid. 2. That the judgment delivered on the 4th day of February, h 1980 is now more than 16years old and therefore an action cannot be brought upon the said judgment by virtue of section 12(2) of the Limitation Decree No. 88 of 1966. 3. That the judgment delivered on 4th of February was in fa- i vour of the applicant/respondent and it is for the sum of N374,612.16 with interest at 6% from 25/10/79 up till the date of judgment which was 4th of February, 1980, no other interest was granted the applicant/respondent by the Hon- ourable Court.” j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Dep Insur Corp v. Frank and Frank Construction Co Ltd 653 a IN THE ALTERNATIVE: “AN ORDER of the Honourable Tribunal striking out the applicant/respondent’s particulars of claim against the respon- b dents/applicants for disclosing no reasonable cause of action against the respondents/applicants and for being an abuse of Courts process.” In arguing the Motion Mr G.C. Anyanfulu for the second, c fourth, sixth, seventh and eighth respondents relied on the above grounds and paragraph 3 of the Affidavit deposed to in support of the motion. The affidavit was sworn to (sic) by who deposed:– d “3. That I was informed by Godwin C. Anyanfulu, Esq. of Counsel the following and I verily believe him:– (i) That the Court that delivered exhibit ‘D’ was a Court of competent jurisdiction. e (ii) That the exhibit ‘D’ was on the application of New Nigeria Bank Limited and it was not appealed against neither was it set aside and that it is still subsisting. (iii) That the parties in LD/1264/79 are the same as parties f in this Application by Nigeria Deposit Insurance Cor- poration. (iv) That the subject matter in LD/1264/79 is the same as that of the present application by the Nigeria Deposit g Insurance Corporation. (v) That the New Nigeria Bank Limited did not make any attempt to execute the judgment referred to as exhibit ‘D’. h (vi) That there is nothing in the Nigeria Deposit Insurance Corporation Application dated 24th July, 1996 that shows any connivance of the respondents/applicants who were mere nominal Directors in seeking and ob- i taining the overdraft the subject matter of this Appli- cation. (vii) That none of the respondents/applicants did execute any bond, signed any cheque or signed any deed of Guarantee in respect of the overdraft the subject ma- j ter of this Application. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 654 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(viii) That none of the respondents/applicants was involved a in the day to day management of Frank and Frank Construction Company Limited. (ix) That the Application dated 24th of July, 1996 dis- b closes no cause of action whatsoever against the respondents/applicants. (x) That it is now more than 16 years since the judgment exhibit ‘D’ was delivered and the Nigeria Deposit In- surance Corporation is not entitled to bring any action c based on exhibit ‘D’ as it is statute barred.” Learned Counsel, Anyanfulu, further submitted that the Tri- bunal lacks jurisdiction to entertain the action and that the plea of res judicata applies here. He also cited the case of d Yoye v. Olubode (1974) 10 S.C. 209 on res judicata. REPLY: There was no counter-affidavit filed by the applicant to the e main action. However, Mr Okeaya-Inneh (SAN) for the applicant in the main action addressed on points of law. He submitted thus:– That the Tribunal has jurisdiction under sections 3(1)(a), 9, f 11(1) and 17 of the Failed Banks Decree etc to recover debt due to Failed Banks notwithstanding anything in any law to the contrary. That the unpaid judgment debt with interest as claimed in the Application is a debt recoverable under the g Decree. That by the combined effect of sections 1, 3(1)(a), 9 and 11 of the Decree, jurisdiction is vested in the Tribunal. By section 9 of the Decree the powers of the Tribunal to recover debts due to Failed Banks can be exercised. “Notwith- h standing anything to the contrary in any law . . .” Therefore, submitted learned Counsel, the Tribunal can hear this Application notwithstanding that execution of the judgment of the High Court of Lagos was not levied under i the prevailing “Sheriff and Civil Process Law, judgment En- forcement Rules” governing same. Reference was made to the Sheriffs and Civil Process Law Cap 151 of 1976 of Bendel State Law, which the Learned j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Dep Insur Corp v. Frank and Frank Construction Co Ltd 655 a Senior Advocate said was “in pari materia with the applicable Lagos State Laws”. He said the limitation period caught up with the enforcement of the judgment in question. He re- b ferred to the Statute of Limitation Cap 89 the Laws of Bendel State, 1976 which stipulates Limitation period of between six and twelve years within which to levy execution of judgment. c It is further submitted that, “The action before the Tribunal is a debt owed to the Bank. Judgment debt, as in this case, is a debt for all intents and purposes and recoverable by this Tribunal, subject of course, to any defence, such as in this d case that judgment has already been obtained in the High Court”. Case cited on judgment debts and interest is Ek- wunife v. Wayne (W/A) Ltd (1989) 5 N.W.L.R. (Part 122) page 422 at 430, ratio 28 and 29. e He submitted that the plea of res judicata raised by the respondent’s Counsel does not apply in that the present action is not the same as the case decided by the Lagos High Court. He pointed out that:– f 1. The parties in the 1980 case are New Nigeria Bank Plc v. Frank and Frank Const. Co Ltd whereas in the present case, the applicant is NDIC (Liquidator of NNB Plc) and Frank and Frank Const. Co Ltd and g Others). 2. The subject matter is not the same in that the applicant’s claim herein is for the sum of N6,491,279.71 outstanding as at 1996 whereas in the High Court ac- h tion, the claim was for the N374,612.16 adjudged due as at 4/2/80 and interest there after. TRIBUNAL: i There are two main issues raised in this motion namely:– 1. Whether a judgment debt is recoverable by the Tribu- nal under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of j 1994. [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 656 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

2. Whether the plea of res judicata avails the respon- a dents in relation to the amount and interest claimed in the Application before this Tribunal. The first issue relating to judgment debt calls to mind the b description of the term as given by Nnaemeka-Agu, JSC in the cited case of Ekwunife v. Wayne (W/A) Ltd (1989) 5 N.W.L.R. (Part 122) 422 at 446:– “judgment debt is described as a debt or damage or other monetary c award which has been pronounced upon by a Court of competent jurisdiction. It begins when the Court has pronounced its judgment in favour of the plaintiff.” The judgment of the Lagos High Court upon which the argu- d ments in this motion were focussed is undisputably given by a Court of competent jurisdiction. The amount of N374,612.16 (Three Hundred and Seventy Four Thousand, Six Hundred and Twelve Naira and Sixteen Kobo) awarded with 5% inter- e est up to the date of the judgment constituted a judgment debt. It was effective from the date of the judgment which was 4th February, 1980. That judgment has not been executed and is still subsisting. The judgment creditor – the f New Nigeria Bank Plc failed to levy execution for its recovery although efforts were said to be made by the Bank to recover the judgment debt through negotiations and exchange of letters up to 1991 as pleaded in paragraph 7 of the main g Application. Submission made by the Learned Senior Advocate was to the effect that: This action for the recovery of the judgment debt with interest charges up till 1996 was brought before h this Tribunal because the period within which to enforce the judgment had elapsed. To this end, he made reference inter alia to section 4(4) of the Limitation Law Cap 69 Laws of Bendel State, 1959 applicable in Edo State. The section pro- i vides that:– An action shall not be brought upon any judgment after the expiration of twelve years from the date in which the judgment became enforceable . . . He submitted that the judgment of 1980 would be unenforceable in 1996 under the Laws of Lagos or Edo States. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Dep Insur Corp v. Frank and Frank Construction Co Ltd 657 a That enforcement of such debt by the Tribunal is permissible and that the Tribunal’s jurisdiction is not affected by any limitation law. Learned Counsel did not cite the relevant enforcement Rules of the Lagos State High Court relied upon. However, the Learned b Senior Advocate said that the appropriate provisions of Lagos State Rules are same as those of Edo State.

TRIBUNAL: c The Failed Banks Decree has done away with any law or statute of limitation in relation to the recovery of debts owed to Failed Banks. To this end, section 17 of the Decree stipulates:– d “The provisions of the Limitation Law of a State or the Limitation Act of the Federal Capital Territory, Abuja shall not apply to matters brought before the Tribunal under this part of the Decree.” The “part” referred to is Part II captioned Recovery of Debts e owed to Failed Banks and covers sections 9 and 18. This Application which is brought under the provisions of section 11 of the Decree is therefore unimpaired by any limitation period in the exercise of its power and jurisdiction under the f Decree. In considering whether it is permissible for a judgment debt to be recovered under the Decree, it is pertinent to refer briefly to the powers of the Tribunal and definition of g “DEBT” under the Decree. Under section 29 of the Decree, debt is defined as meaning:– “any loan, advance, credit accommodation, guarantee or any other credit facility together with interest thereon which remain out- h standing and unpaid against a customer of a bank in favour of the bank.” The above definition which is generic in term does not cate- gorise debt into judgment or simple or other debts. Judgment i debt is the surest or highest of all debts for recovery purpose. If the judgment is based or founded on any of the above elements falling within the definition of debt and is in favour of a failed bank, then it seems to me that it is recoverable either j under the Failed Banks Decree by the Tribunal or by levying [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 658 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. execution under the provisions of the judgment Enforcement a Rules applicable. Since the latter option was not pursued since 1980 and the judgment debt has become unenforceable under the recovery law Rules of the High Court due to ef- b fluxion of time, the Tribunal can appropriately invoke the powers conferred on the Tribunal by section 9 of the Decree to recover the debt. The section provides:– “Notwithstanding anything to the contrary in any law, deed, c agreement or memorandum of understanding, the Tribunal shall have exclusive jurisdiction to hear and determine all matters brought before it concerning the recovery from any person of any debt owed to a failed bank which remains outstanding as at the date of closure of the business of the failed bank.” d The various expression “any debt” used in that section is far reaching and extensive enough to accommodate the recovery of all types of unpaid debts including judgment debts. I am inclined therefore to sustain the submission made by the e learned Senior Advocate in this regard that judgment debts are recoverable by the Tribunal. At the same time I should sound a note of caution that the Tribunal is not intended to be saddled with the primary duty f of enforcing judgment of the regular Courts. That duty remains first and foremost with the trial Court to enforce its judgment upon an application by the judgment creditor under the applicable judgment Enforcement Rules. Judgment g creditors have to be alert and diligent in taking the necessary step towards recovering the judgment debt by levying execution without undue delay. Before turning to the Tribunal for the recovery of judgment debt, the judgment creditor h ought to have exhausted all efforts in that regard and failed to realise the judgment debt. If the recovery of the judgment debt becomes impossible and in the meantime, as in this case, the limitation period catches on and renders unenforce- i able the judgment debt by the trial Court, the Tribunal may then assist in the recovery of the judgment debt. The above statements are intended to serve as guidelines but subject to the overall power of the Tribunal to recover “any debt owing to the Failed Banks”. j [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Nigeria Dep Insur Corp v. Frank and Frank Construction Co Ltd 659 a My ruling on the first arm of objection is that the debt of 4/2/80 adjudged payable by the Lagos High Court is cognisable and enforceable by the Tribunal under and by virtue of b section 3(1)(a) and particularly section 9 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994. ISSUE OF RES JUDICATA: c The respondents second objection to the Application for recovery of the judgment debt is that the High Court having determined the first respondent’s indebtedness, the present ac- d tion is incompetent. The plea of res judicata if successful robs the Tribunal of its jurisdiction to hear and determine the Application. The case of Yoye v. Olubode (1974) 10 S.C. 209 dealt exhaustively with the requirements and effect of the plea. The Supreme Court held at page 221 of the report that:– e “The plea of res judicata prohibits the Court from enquiring into a matter already adjudicated upon. Before it can operate, it must be shown that the parties, issues and subject matter were the same in the previous case as those in action in which the plea of res judi- f cata is raised. It is also well settled that once the plea is made out by the party seeking to rely upon it, the claim filed by the other party would be dismissed on the grounds that the Court lacks jurisdiction to allow parties to relitigate the same issue again.” g RE: MATTER ADJUDICATED UPON BY THE HIGH COURT: The Application for the recovery of N6,491,279.17 due is inclusive of adjudged sum and interest charged after the h judgment until 1996. Exhibit O to the Affidavit is the En- rolled Order of the judgment of the Lagos High Court and it shows that judgment was given for the plaintiff against the defendant “in the sum of N374,612.16 with N250 costs.” The i judgment is based on 2 of the 3 reliefs sought. The arm of the claims not covered by the judgment was the claim for “interest at a current rate of 4% from the date of payment until judgment debt is repaid”. In the writ of summons filed in the j High Court, (exhibit A to the Affidavit in this motion) the [1994 – 1996] 6 N.B.L.R. (PART II) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 660 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. said amount of N374,612.16 was claimed “with interest up a to judgment at the rate of 10.9% and interest until payment”. For the rule of estoppel per res judicata to apply to bar a subsequent litigation, the parties to both proceedings must b be the same and the issues and/or the subject matter must be the same. It is apparent from the facts in the motion vis-à-vis the main Application that the parties are relying on the same judgment for their respective claims. The applicant is relying c on it for the recovery of the judgment debt awarded in favour of the Bank as at 4/2/80 and also as the basis for claiming interest beyond the judgment date till payment. The respondents on the other hand are relying on the judgment as proof d of the only amount due to the applicant from the first respondent. The plea of res judicata appears inappropriate in this action. The issue that seems likely to be decided by this Tri- bunal is whether the applicants are entitled to interest on the e judgment debt beyond 4/2/80 – the judgment date. That is an issue that was not covered by the judgment order. Neither party is questioning the judgment itself and indeed cannot be heard to challenge or reopen the issues decided upon as the f judgment constitutes a conclusive proof of the facts or claims actually adjudged upon. The plea of res judicata cannot operate against the claim for interest accruing after judgment which, though included in the High Court action, was not ad- g judicated upon. While the judgment debt is recoverable as debt due to a failed bank, the said judgment of the High Court does not operate as an estoppel against the hearing and determination of the claim for interest and other related sums h allegedly accruing after the date (4/2/80) of the judgment. The action before me is proper.

ORDERS: i The objections raised are dismissed. respondents to file a Reply by 31/12/96. Hearing date 16/1/97. j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA)

E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 661 a E.D. Tsokwa and Sons Company Limited v. Union Bank of Nigeria Limited b SUPREME COURT OF NIGERIA WALI, OGUNDARE, OGWUEGBU, MOHAMMED, IGUH JJSC Date of Judgment: 20 DECEMBER 1996 Suit No.: S.C./60/1989 c Bills of Exchange – Requirement of presentation of bill of exchange – When may be dispensed with Bill of Exchange – Section 48 Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 – Whether applica- d ble where cheque was never presented

Facts The appellant was a customer of the respondent Bank at its e Gboko branch in Gboko Benue State. The appellant lodged three different cheques at different times and on each occa- sion withdrew the whole amount before the cheques were cleared. Not having received value for the amounts of these f cheques, the respondent on diverse dates debited the appellant’s account in the various sums of these cheques. In fact the appellant’s cheques were sent for clearing but were never seen again as they got lost in transit. g The appellant instituted this action alleging wrongful debit of his account by the respondent. At the end of the trial in the High Court, the learned trial h Judge found for the appellant, the respondent being dissatisfied appealed to the Court of Appeal which allowed the respondent’s appeal in part against the decision of the High Court. The appellant being dissatisfied then appealed to the Supreme Court. The respondent also cross appealed against i the part of the judgment which was not in its favour. Held – 1. Section 48 of the Bills of Exchange Act Cap 35 Laws of j the Federation of Nigeria, 1990 would apply only to [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

662 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

cases where a bill has been dishonoured by non- a acceptance or non-payment, unlike the evidence in the present case where the cheques in issue were never presented for payment so that no question of non- b acceptance or non- payment did arise there from. 2. When a person issues a cheque in his own favour and drawn on a bank, that person is a drawer and payee (or specific person) in respect of the cheque but the bank on c which the cheque is drawn is the drawee of the cheque. 3. In order to recover from a customer or to make him liable for the fees charged by a Solicitor for the preparation of a mortgage deed, a bank has to lead credible and d satisfactory evidence to show that it granted a loan to the customer and that one of the conditions, subject to which the loan was granted and to which the customer agreed, was that the customer would execute a deed of mort- e gage, prepared at the customer’s expense, on his property as security for the loan. In the absence of such an agreement, there will be no legal basis for making the customer liable for the Solicitor’s fees charged for the f preparation for a mortgage deed. In the present case, there was no evidence before the learned trial Judge that the respondents ever agreed to bear the expenses of preparing the deeds of mortgage. g 4. Per curiam “The defendant led no evidence of the grant of facilities to the plaintiff requiring the latter to execute a deed of legal mortgage to secure the facilities. On the contrary DW3 said that plaintiff h overdrew on his account in an irregular manner. The position taken by the defendant in this case was that E.D. Tsokwa and Sons was not a legal person. Yet exhibit ‘N’ shows it was the mortgagor, and not the plaintiff. Indeed, the Deed was not executed by the plaintiff. In the absence of clear evidence that the i plaintiff agreed to bear the cost of the legal mortgage executed by E.D. Tsokwa and Sons, I cannot see how it could be made liable for the cost. In the circumstances, I uphold the decision of the two courts below disentitling the defendant to claim from the plaintiff the legal bill of N20,701.09.” j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA)

E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 663 a Appeal dismissed, Cross appeal allowed in part. b Cases referred to in the judgment Nigerian A.C.B Ltd v. A.G. Northern Nigeria (1967) N.M.L.R. 231 c Adegoke v. Adibi (1992) 5 N.W.L.R. (Part 242) 410 Adenuga v. LTC (1950) 13 W.A.C.A. 125 Aderemi v. Adedire (1966) N.M.L.R. 398 d Akinfosile v. Ijose (1960) S.C.N.L.R. 447 Anyanwu v. Mbara (1992) 5 N.W.L.R. (Part 242) 386 Egbunike v. A.C.B Ltd (1995) 2 N.W.L.R. (Part 375) 34 e Ehimare v. Emhonyon (1985) 1 N.W.L.R. (Part 2) 177 Idahose v. Oronsaye (1959) S.C.N.L.R. 407 Ike v. Ugboaja (1993) 6 N.W.L.R. (Part 301) 539 f Nasr v. Berini (1968) 1 ALL N.L.R. 274 Nigerian Maritime Services Ltd v. Afolabi (1978) 2 S.C. 79 Nigerian Ports Authority v. Construzioni Generalie Farsura g Cogefar SPA and another (1974) 12 S.C. 81 Okuarume v. Obabokor (1965) 1 ALL N.L.R. 360 Okubule v. Oyagbola (1990) 4 N.W.L.R. (Part 147) 723 h Foreign Read v. Brown (1889) 22 Q.B.D. 128 Re: Vandervell’s Trust (No. 2), White v. Vandervell Trustees i Ltd (1974) 3 All E.R. 205

Nigerian statutes referred to in the judgment Bills of Exchange Act Cap 35 Laws of the Federation of Ni- j geria, 1990, sections 46, 48 [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

664 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Evidence Act Cap 112 Laws of the Federation of Nigeria, a 1990, sections 135, 140, 149(d)

Counsel b For the appellant: T.E. Williams, Esq. For the respondent: G.O. K. Ajayi, SAN (with him S.A. Sowemimo, Esq.) c Judgment WALI JSC: (Delivering the lead judgment) The claims of the appellant as set out in his Amended Statement of Claim d are as follows:– “(1) A Declaration of the court that the plaintiff is not indebted to the first defendant to the sum of N736,812.29 as at 31st March, 1983. e (2) A Declaration that the defendants were in error when they charged/debited the plaintiff’s account with interest of N117,939.91 calculated on disputed sum/debt from 5/6/81 to 3/3/83. (3) A Declaration of the court of the actual financial position of f the plaintiff at the defendants’ Branch Gboko. (4) An Order of the court compelling the defendants to rectify their books of accounts to reflect the actual indebtedness of the plaintiff as at 31st March, 1983.” g The respondent in answer to the Amended Statement of Claim filed an Amended Statement of Defence in which the crucial averments in the said Amended Statement of Claim were denied. h After pleadings were settled, the case went to trial in which each side called witnesses to prove the averments in his pleadings. Learned Counsel for both the appellant and the respondent addressed the court to buttress the cases they i presented and thereafter the learned trial Judge adjourned the case for judgment. In his reserved judgment delivered on 20th March, 1986, the learned trial Judge found in favour of the appellant as follows:– j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA) Wali JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 665 a “In the light of the above I hold that the plaintiff have proved quite substantial part of their claim on a balance of probability. They are entitled to judgment. I therefore grant a declaration that the plaintiffs are not indebted to the defendants in the sum of N736,812.29 b as at 31st March, 1983. I found as a fact that the plaintiffs are indebted to the defendants in the sum of N116,717. How I arrived at this figure are carefully set out above. 2. I further declare that the defendants can only calculate in- c terest on the debt of N116,717 3. The defendants are hereby ordered to rectify their books of account to reflect the findings of the court.” d Dissatisfied with the judgment of the trial court the respondent (then as appellant) appealed against it to the Court of Appeal. At the end of the exercise before it the Court of Ap- peal unanimously allowed the appeal in part. Adio, JCA (as e he then was) delivered the judgment of the court in which he concluded:– “In the circumstance, this Court affirms the declaration granted by the trial court to the respondents that they were not indebted to the f appellants in the sum of N736,812.29k as at 31st March, 1983, and the order made by the trial court requiring the appellants to rectify their books of account to reflect the findings of the court. The finding of the trial court that the respondents were indebted to the appellant in the sum of N116,717 and its declaration that the appel- g lants could only calculate interest on the debt of N116,717 are hereby substituted with a declaration that the respondents are indebted to the appellants in the sum of N456,717 as at 31st March, 1983 and a further declaration that the appellants are entitled to calculate interest on only the aforesaid debt of N456,717 respec- h tively. The declarations and the order of the trial court, as modified or varied in the manner mentioned above, are or should be as follows:– 1. The plaintiffs/respondents are granted a declaration that i they were indebted to the defendants/appellants in the sum of N736,812.29k as at 31st March, 1983. 2. The plaintiffs/respondents are granted a declaration that they were indebted to the defendants/appellants in the sum j of N456,717 as at 31st March, 1983. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Wali JSC 666 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

3. The plaintiffs/respondents are granted a declaration that the a defendants/appellants are entitled to calculate interest on only the aforesaid debt of N456,717. 4. The defendants/appellants are hereby ordered to rectify b their books of account to reflect the judgment.” Aggrieved by the Court of Appeal decision, the plaintiff as appellant and the defendant as respondent filed an appeal and cross appeal respectively to this Court. c I deem it pertinent at this stage to state in brief, the facts involved in this case which are as follows:– The appellants were bankers while the respondents were their customers at the Gboko Branch of the appellants in which they had d current accounts. The appellants were operating the current accounts for the purpose of and in connection with their business. In the process, the appellants paid several cheques into the accounts and also withdrew large sums of money, with the connivance of the respondent’s manager to the equivalent of the sums to which e the cheques were related in most cases. Some of the aforesaid cheques paid into these accounts and against which the appellants withdrew money were lost and, therefore, not presented to the banks on which they were drawn. The loss of these cheques was not brought to the appellant’s notice. As a result, he sought for f declaration stated in paragraphs 18(1), (2), (3) and (4) of the Amended Statement of Claim (supra). Learned Senior Advocate filed and exchanged briefs which were orally elaborated upon on the day the appeal was g heard. In the brief filed on behalf of the appellants, the following two issues were raised for consideration and determined by this Court:– h “(i) Whether, in the circumstances of this case, the plaintiffs are discharged as drawers of the relevant cheques by reason of the provisions of section 48 of the Bills of Exchange Act. (ii) Whether the court below was correct in reversing the deci- i sion of the High Court regarding the sum of N44,820.” In the brief filed by the respondent, no new issues were formulated as regards the main appeal, but however raised the following two issues in the cross appeal j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA) Wali JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 667 a “(i) On whom did the onus of proof of the value of the three cheques drawn by the plaintiff/respondent lie? (ii) Was the plaintiff obliged to pay the cost of preparing the b mortgage deeds”? In the brief of the respondent, Learned Senior Advocate raised a preliminary objection as regards the competence of the second issue in the appellant’s brief contending that it c involves a question of mixed law and fact for which no prior leave was sought for and obtained. He therefore urged this Court to disregard all arguments advanced in support of that issue. d On page 154 of the record, Learned Senior Advocate for the appellant, in an application dated 12th September, 1988 sought leave of the Court of Appeal “to appeal (in so far as the appeal concerns questions other than questions of law e alone) to the Supreme Court from the decision of the Court of Appeal herein delivered on 1st day of July, 1988.” This application was granted on 21st September, 1988 as per the Court of Appeal order contained on page 156 of the f record which reads:– “It is hereby ordered:– (1) That the application for leave to appeal to Supreme Court is g granted.” The application was made and granted within the statutory period of three months from the date of delivery of judgment and therefore in order. The preliminary objection must be as h a result of over sight and is accordingly overruled. Learned Senior Advocate for the appellant took the two questions he raised in his brief together. He quoted in ex tenso the findings of the learned trial Judge relating to the i three cheques drawn by the appellants on their First Bank, Yola account and paid into their account with the defendant’s Branch in Gboko on different dates to wit:– (a) On 9th June, 1980 a cheque for N150,000 drawn on First j Bank, Yola. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Wali JSC 668 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(b) On 3rd October, 1980 a cheque for N90,000 drawn on a First Bank, Yola. (c) On 1st September, 1981 a cheque for N100,00 drawn on First Bank, Yola. b The respondents complained that their manager, against established banking practice, credited the appellants’ account with the three sums (supra) and allowed them to immediately withdraw the said amounts without first clearing the c cheques with the First Bank, Yola. The appellants also complained that the respondents did not notify them that the cheque in question were lost in transit until after one year, seven months and six months respectively and submitted d that, that was a breach of section 48 of the Bills of Exchange Act and that the respondents were vicariously liable for the ensuing loss sustained by the appellants resulting from the reckless acts of their servants, particularly their Branch Manager, who the appellants claimed was dismissed in order e to cover up the fraud perpetrated on the appellants. Learned Senior Advocate therefore submitted that the Court of Ap- peal was wrong in its conclusion on this issue that the loss of the cheques (supra), the value of which the appellants had f already withdrawn from their accounts with the respondent without corresponding evidence that the appellant’s account with the First Bank, Yola was debited with the value of the cheques aforesaid, did not cause any loss to the appellant. g On question II which is the second issue raised in the appellant’s brief. Learned Senior Advocate adopted his same style of arguments on issue I by quoting in extenso the findings and conclusion of the trial court as well as that of the h Court of Appeal relating to the said issue. It was the contention of the Learned Senior Advocate that since DW3 who was the Manager of the defendant on the date he testified admitted accepting lodgement of Union i Bank of Nigeria, Gboko Cheque No. 362037/055594 for N44,820, the Court of Appeal ought to have disturbed the findings of the learned trial Judge that the defendants were vicariously liable to the appellants in the said sum. He j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA) Wali JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 669 a submitted that since the enactment of the Bills of Exchange (Amendment) Act, 1964, cheques presented for payment through a bank to a customer’s account do not require any b endorsement, even if the customer’s name as payee is not on the cheque. He therefore urged that the appeal be allowed. In reply to the issue 1 relating to the three cheques drawn by the appellants on First Bank of Nigeria, Yola the total c sum of which is N340,000, it was the contention of Chief Ajayi Learned Senior Advocate appearing for the respondents that the pleading of the appellants did not disclose sufficient materials in relation to the said cheques to enable any d one to reasonably infer that the appellants would be relying on section 48 of the Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990. He submitted that the decision of the Court of Appeal that the appellants could not e shift position to rely on section 48 which was not pleaded could not be faulted. Learned Senior Advocate also said there was no appeal against this finding of the Court of Ap- peal and therefore appellants could not rely on section 48 of f the Act. He cited Odiase v. Agho (1972) 1 ALL N.L.R. 175 in support. He went on to submit that the Court of Appeal rightly found that section 48 of the Bills of Exchange Act was not applicable to the facts of this case in that:– g (i) The section only applies to cases where a Bill has been dishonoured by non-acceptance or by non- payment. (ii) That the cheques drawn on the First Bank, Yola were h never presented to the said Bank for payment for the reason that they got lost. The comment by Adio, JCA. (as he then was) as regards the applicability of section 50(2)(c)(i) of the Bills of Exchange i Act, was obiter and not the basis of the Court’s decision. Chief Ajayi, SAN further submitted that the Court of Appeal reviewed the undisputed facts in this case surrounding the three cheques and came to the correct conclusion that the j appellants lost nothing since their account with the First [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Wali JSC 670 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Bank of Nigeria, Yola was not debited with the same. He a again contended that the appellants did not appeal against this finding. On issue II relating to the cheque of N44,830 drawn on b Union Bank of Nigeria, Gboko and paid into the respondents by the appellants, learned Senior Advocate submitted that the appellants did not advance arguments in support of the proposition that a bank which received a cheque for payment c that had no account with it and did not credit same to the person the payer of the cheque could claim the value of the same from the bank. He therefore urged this Court to dismiss the appeal. d Reading the pleadings as a whole to wit the Amended Statement of Claim and the Amended Statement of Defence, it could be discerned there from that the appellants intended to rely on the provision of section 48 of the Bill of Exchange e Act. But that not withstanding. Section 48 of the Act comes into play when only a cheque is dishonoured and not lost. The respondents in their evidence in support of their pleading went on to show that they could not return the three f cheques to the appellants because they were lost. The appellants claimed that the respondents dismissed its Manager to defraud the appellants. The respondents on their part denied the allegation and averred that the Manager connived with g PW3 the Managing Director of the appellants to destroy the cheques. The appellants alleged fraud against the respondents and it was their duty to prove the allegation in conformity with the standard of proof in criminal cases. See Nige- rian Ports Authority v. Construzioni Generalie Farsura Co- h gefar Spa and another (1974) 12 S.C. 81 and Okuarume v. Obabokor (1965) 1 ALL N.L.R. 360. This evidence was lacking, the respondents had no duty to prove the appellants case for them. In civil cases it is the duty of the plaintiff to i prove his case to the standard required but not to rely on the weakness of the defendant’s case. Returning to the value of the three cheques which the appellants claimed, I have already said that section 48 of the j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA) Wali JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 671 a Bills of Exchange Act is not available to the appellants since the said cheques were lost but not dishonoured. It was common ground that the three cheques were issued by the appel- b lants in favour of themselves on their account at the First Bank of Nigeria, Yola and paid into their account with respondents. The evidence proved that the appellants were allowed to withdraw the amount in dispute by the respondents before the three cheques were cleared which consequently c got lost. It was in evidence by PW1 that E.D. Tsokwa (PW3) is the sole signatory of the appellant’s two accounts with the respondent. PW2, the Accountant employed by the appellants to audit their Accounts with respondent and in relation d to the three cheques testified as follows:– “The unauthorised debits are made up to eleven items, four cheques and seven transfers. The first cheque is for N150,000. It was lodged in by the plaintiffs/defendants credited it, and reversed e over a year later. The plaintiffs had treated the cheque as cleared but it was reversed after the statutory period. The defendants had no power to do so. It forms part of over-all debit balance. The second cheque was for N90,000 which was reversed after two months of lodgement. The third one was for N100,000, this was f reversed after six months. It was lodged on 9th February, 1981 and reversed on the 1st September, 1981. It forms part of over-all debit balance.” Under cross-examination the witness admitted that at the g time he audited the appellant’s account with the respondents he was a pupil accountant, it was he that prepared exhibit J the appellants’ statement of account based on the documents given to him by the appellants. h On exhibit D which was the purported Statement of Ac- count sent to them by respondents, DW3 testified on it thus under cross-examination:– “We used certain stamps in our office . . . exhibit D was not i signed. The figures cannot be taken to be correct. Exhibit D is not authentic even though it emanates from our office. This is because it was not signed.” The evidence led by the respondents that the three cheques j were lost was neither challenged nor contradicted. There [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Wali JSC 672 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. was no evidence that the amounts equivalent to the ones on a exhibits A, B and C respectively and drawn by the appellants on their account with First Bank of Nigeria, Yola was debited, despite the fact that the same were paid into appel- b lant’s Account I with the respondents and their value withdrawn by them with the active connivance of the respondent’s Manager who was dismissed by the respondents for other such similar malpractices. Both the drawer and the c payee in the instant case are the same person. The appellants cannot escape liability when the cogent and undisputed evidence by the respondents was that non-presentment of exhibits A, B and C was due to circumstances beyond their d control and not attributable to negligence on their part. Sec- tion 46(2)(a) of the Bills of Exchange Act provides as follows:– “46(1) . . . e (2) Presentment for payment is dispensed with (a) Where, after the exercise of reasonable diligence, presentment, as required by this Act cannot be effected.” See (1) A.I. Egbunike f (2) Maria Gold Obiageli Egbunike (Trading as Metropolitan Paints and Chemi- cals Co.) v. g African Continental Bank Ltd (1995) 2 N.W.L.R. (Part 375) 34 at 48. Where Adio, JSC in the lead judgment of the court said on a similar issue:– h “In the circumstance, the presentment, of the cheques for payment could not reasonably be expected having regard to the dishonour- able conduct of the then Manager of the respondent who happened to be a brother of the first appellant. Consequently, section 41(3) i of the Bills of Exchange Act becomes applicable. Paragraph (b) section 41(3) of the Act excuses presentment of a bill of exchange for acceptance and such bill may be treated as dishonoured by non-acceptance where, after the exercise of reasonable diligence, such presentment cannot be effected. Presentment for payment is j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA) Wali JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 673 a also dispensed with under section 46(2)(a) of the Act where, after the exercise of reasonable diligence, presentment for payment cannot be effected.” b Accordingly the learned Justices’ conclusion on exhibits A, B and C that the appellants (then as respondents) are liable for the total sum of N340,000 cannot be faulted. I therefore answer Issue I in the negative. c The controversy in Issue II involves exhibit E with which a cheque to the value of N44,820 drawn on the Union Bank of Nigeria, Gboko by a customer in favour of E.D. Tsokwa and Sons. Exhibit E is the Bank Teller with which the said d cheque was paid by the appellants to the respondents the value of which the latter had failed to credit the former with. This allegation was denied by the respondents in paragraph 13(b)(iii) of the Further Amended Statement of Defence to e the effect that “they deny receiving same and shall at the hearing require the strict proof thereof.” In an attempt to prove the claim, the appellants adduced evidence as follows:– f PW1 “One of the tellers borne (sic) the value of N44,820. This is the teller. Tendered. No objection. Marked as exhibit ‘E’ and read. This amount was not credited to the plaintiff’s ac- g count.” PW2 “The third was Union Bank Gboko drawn in favour of the plaintiffs by another customer of the Union Bank. It is for h N44,820 this cheque was paid in by the plaintiffs and was not credited to the plaintiffs. I saw the teller.” In rebuttal of the evidence above, DW3 testifying for the respondents said:– i “A cheque for N44,820 was lodged into plaintiff’s account. The plaintiffs operate account in the name of the E.D. Tsokwa and Sons Co Ltd exhibit ‘E’ shows that lodgement of N44,820 was made to E.D. Tsokwa and Sons. The defendants did not accept that lodgement because the stamp on it does not belong to the defen- j dants and we have no account for E.D. Tsokwa and Sons.” [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Wali JSC 674 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Under cross-examination the witness further testified thus:– a “The sum of N44,820 was not credited to the Account of plaintiff on 24th February, 1981. Exhibit ‘E’ shows that E.D. Tsokwa and Sons paid into his Account Cheque of N44,820. From the records I b inherited the only account we have in Union Bank (Nig.) Ltd Gboko is for E.D. Tsokwa and Sons Co Ltd. Although the defendants accepted the lodgement of N44,820, I cannot say where that money went to. The stamp used in receiving the amount is not meant for that purpose it has no date.” c PW2 said under cross-examination:– “For any document of Account to be acceptable, it must contain the signature and the stamp of the relevant Bank.” Looking at the excerpts of the evidence above, could it be d said that the appellants had strictly proved the liquidated amount being claimed? I answer the question posed in the negative for the following reasons:– 1. The cheque for N44,820 paid in by the appellants was e drawn in favour of E.D. Tsokwa and Sons which is not the same person as the appellants. 2. The appellants did not satisfactorily prove lodgement of the said cheque since the respondents denied receiving it by f leading evidence to show that the stamp used on the teller exhibit E was neither signed nor dated, and was not the type being used for such purpose. 3. There was no proof by the appellants that they lost anything by showing that the cheque lodged into the respondents was g cleared. 4. Even if to say the cheque was cleared (which is not the case here) the appellants not being the payee are not entitled to be credited with the proceeds. The best the respondents h could do is to pay the proceeds into their suspense Accounts pending same being claimed by the payee. The findings and conclusions by Adio, JCA. (as he then was) that:– i “. . . ‘official stamp’ on the teller (exhibit “E”) was not the type of official stamp being used to stamp tellers used for making payments into customers’ accounts and that the stamp did not contain any date. Further, there was no evidence that the mark or initial of the person, who stamped and signed the teller, was that of any j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA) Wali JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 675 a official of the appellants’ branch at Gboko. A customer of a bank who fills a bank teller and gives the teller and the money to which it relates to just any of the bank’s employees for payment into his account does so at his own risk. If it turns out that the bank em- b ployee in question is not an official duly authorised to accept or receive such payment for and on behalf of the bank, the bank will not be vicariously liable if the employee fraudulently converts the money to his own use. See Salawu v. Union Bank (1986) 4 c N.W.L.R. (Part 38) 701. Failure to prove that the initial on the teller, exhibit “E”, was that of an employee of the appellants is fatal to the respondents’ case.” are on firm grounds and cannot be faulted, I therefore answer Issue II in affirmative. d The main appeal fails in toto. The Cross Appeal: The respondents after obtaining leave of this Court filed e their cross appeal, and along with the amended respondents brief of arguments, filed the brief in support of the cross appeal. Three grounds of appeal were filed by the respondents/cross appellants from which the following two issues f were formulated in the supporting brief:– (i) On whom did the onus of proof of the value of the three cheques drawn by the plaintiffs/respondents lie? (ii) Was the plaintiff obliged to pay the cost of preparing g the mortgage deeds? On Issue (i) the Learned Senior Advocate submitted that the Court of Appeal as well as the trial court were wrong in putting the onus of proof as regards the discrepancies relating to h the facts pleaded in paragraph 9C of the Amended Statement of Claim on the respondents/cross appellants. He said the onus was on the appellants to prove what they had alleged and it was only when they had made out a prima facie case i that the respondents/cross appellants would be required to produce rebutting evidence. He contended that the appellants/respondents had to initially prove:– (i) That it had drawn the particular cheques for the spe- j cific mount pleaded. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Wali JSC 676 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(ii) That Mobil (Nigeria) Ltd had only received those spe- a cific amounts; and (iii) That the defendants had nonetheless debited the plaintiff’s account with a larger amount than that for which b the cheque had been drawn and which had been paid to Mobil (Nigeria) Ltd.

Learned Senior Advocate referred to and analysed the evi- c dence adduced by the appellants/respondents, particularly that of PW1 and PW2 and submitted that the fact that the respondents/cross appellants pleaded in paragraph 13(c) of the further Amended Statement of Defence that “the defen- d dants hereby gave notice that at the hearing of this suit they will rely on all the wasted cheques referred to in the paragraph” (to wit paragraph 9C of the Amended Statement of Claim) would not change the position to shift the onus of proof on the respondents/cross appellants. He further sub- e mitted that section 148(d) of the Evidence Act was wrongly applied by the lower court and the court below.

On Issue (ii) in the cross appeal, Learned Senior Advocate f submitted that both the trial court and the Court of Appeal erred in making a different case for the appellants/ respondents from that which they had pleaded. He referred to the portion of the trial court’s judgment where the learned g trial Judge after reviewing the evidence concluded as follows:– “The Mortgagor was Emmanuel Danjuma Tsokwa and Sons. The Mortgagee was the defendants and the plaintiffs were the cus- h tomer. The plaintiffs never signed the exhibit ‘N’. According to the defendants, the party to pay the legal fee of 20,701.09 was the mortgagor. The Mortgagor in exhibit “N” was Emmanuel Dan- juma Tsokwa and Sons and not the plaintiffs who were named as customer. It was wrong therefore for the defendants to debit the i accounts of the plaintiffs.” and that of the Court of Appeal where he said it went off to raise a completely different issue for the appellants/respondents as follows:– j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA) Wali JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 677 a “Even if loans were granted by the appellants to the respondents, it is not every time that a bank grants a loan to a customer that the customer is required to execute a deed of mortgage, prepared at the customer’s expense, on his property in favour of the bank as b security for the loan. Therefore, in order to recover from a customer or to make him liable for the fees charged by a Solicitor for the preparation of a mortgage deed, a bank has to lead credible and satisfactory evidence to show that it granted a loan to the customer c and that one of the conditions, subject to which the loan was granted and to which customer agreed, was that the customer would execute a deed of mortgage, prepared at the customer’s expenses, on his property as security for the loan. In the absence of such an agreement, there will be no legal basis for making the cus- d tomer liable for the solicitor’s fees charged for the preparation of a mortgage deed. In the present case, there was no evidence before the learned trial Judge that the respondents ever agreed to bear the expenses of preparing the deeds of mortgage.” He contended that the questions raised in the pleadings and e for which the Court of Appeal was required to provide solutions were:– “(i) Whether the learned trial Judge was justified in rejecting one of the mortgage Deeds in evidence; and f (ii) Whether the plaintiff was bound to pay for the work which evidently had been done.” and then submitted that had the Court of Appeal dealt with the issues raised before it first, it would not have concluded g in the way and manner it did in the excerpts of its judgment quoted (supra). He therefore urged the court to allow the cross appeal for the reasons which he finally summarised and produced as follows:– h “(iv) Because the plaintiff is not entitled to sue for the value of a cheque paid to the defendant as banker for collection and payment to a third party who has no account with the Bank. (v) Because the learned trial Judge and the Court of Appeal i wrongly relied on the cheque counterfoils to show the amount for which the corresponding cheques had been drawn when the plaintiff’s own witnesses had said that the counterfoils did not tally with the cheque leaves; (vi) Because the defendant was not obliged to answer a case j which had been abandoned, or not made out. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Wali JSC 678 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

(vii) Because the plaintiff failed to lead any evidence to show the a amount for which it wrote the three cheques in respect of which its account was debited. (viii) Because the plaintiff failed to show that the drawee of the b cheques, Mobil (Nigeria) Limited, had not received the amount for which the plaintiff’s account had been debited. (ix) Because it was never the plaintiff’s case that it had not agreed to pay for the preparation of mortgage deeds, but that it had never applied for any Mortgage at all. c (x) Because the mortgage deeds produced by the defendant showed that the plaintiff had in fact applied for Mortgage; (xi) Because the Court of Appeal failed to consider the defendant’s complaint about the wrongful rejection of the mort- d gage deed and instead made out for the plaintiff a case which it had not made out for itself. (xii) Because the requirement that the cost of preparing the security documents is borne by the borrower is a matter of which the court ought to have taken judicial notice.” e The appellants’/respondents’ Counsel did not file respondent’s brief to the cross appeal, nor did he ask for the leave of this Court to make oral submissions, in answer to the cross appeal’s brief and oral submissions made in elabora- f tion thereof. In paragraph 9C of the Amended Statement of Claim the appellants averred thus:– g “C. Discrepancies in bank statement over cheques issued by the company: Date Cheque No Value Amount Debited Discrepancy 30/4/79 362037/000102 364.20N38,107.32 N37,743.12 h 26/9/79 126 15,418.70N27,413.56 N11,994.86 5/l/81 444 137.71N13,753.71 N13,616.00 N63,353.98 The plaintiff shall at the hearing rely on the above mentioned i cheques and the corresponding stamps and the defendant is hereby given notice to produce the originals of same. During trial the plaintiff will urge the Honourable Court to strike out all items of discrepancies in bank statement over cheques issued by the company totalling N63,353.96 which forms part of the j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA) Wali JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 679 a said total debit balance of N736,812.29 in the plaintiff’s account with the defendant. The plaintiff further states that the said cheques and sums hereto referred to in this paragraph were payment made to Mobil (Nigeria) Limited, Bukuru, Jos, and the plain- b tiff shall at the hearing found and rely on relevant records of the transaction kept by Mobil (Nigeria) Limited Bukuru in their normal course of duty.” In answer to paragraph 9(c) of the Amended Statement of c Claim (supra) the respondents in paragraph 13(c) of the Fur- ther Amended Statement of Defence pleaded as follows:– (c) In answer to the discrepancies alleged in paragraph 9C of the statement of claim, the defendants aver as follows:– d (i) The plaintiffs’ cheque Number 000102 of 30/4/79 was drawn for the sum of N38,107.32 and not for N364.20 only. (ii) Their cheque No. 000126 of 26/9/79 was drawn for e N27,413.56 and not for N15,418.70. (iii) Their cheque No. 000444 debit against the plaintiffs was drawn for N13,753.71 on 9/l/81 and not for N137.71. The defendants hereby give notice that at the hearing of this f suit, they will rely on all the wasted cheques referred to in this paragraph.” As urged by the Learned Senior Advocate the onus is on him who asserts. See Okubule v. Oyagbola (1990) 4 N.W.L.R. g (Part 147) 723 and Ike v. Ugboaja (1993) 6 N.W.L.R. (Part 301) 539. It is only when a claimant has produced credible evidence that prima facie established his claim, the onus would then shift on the person asserting the opposite to ad- h duce evidence in rebuttal. See Nigerian Maritime Services Ltd v. Afolabi (1978) 2 S.C. 79 and Adegoke v. Adibi (1992) 5 N.W.L.R. (Part 242) 410. The claim by the appellants/respondents was in respect of i cheques Nos. 362037/000102 of 30/4/79 for N364.20. 000126 of 26/9/71 for N15,418.70 and 000444 of 5/1/81 for N137.71 in favour of Mobil (Nigeria) Ltd Bukuru, Jos by the appellants/respondents and which they alleged j were inflated by N37,743,12, N11,944.86 and N13,616 [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Wali JSC 680 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. respectively, by the respondents and wrongly debiting their a account with total excess of N63,353,98 instead of N15,920.61. The evidence called by the appellants/respondents in proof b of this averment was given by PW1 who said that there were discrepancies between cheque stubs and cheque leaflets. He did not indicate from the cheque stubs the counterfoils of the cheques and the amount in each and the corresponding dis- c crepancies. All he did was to tender the two cheque stubs which were admitted as exhibits F1 and F2. PW3 the Man- aging Director of the appellants and the only signatory of their cheques, said nothing on exhibits Fl and F2 containing d the counter foils of the alleged inflated cheques. There was no attempt by the appellants to call anybody from Mobil (Nigeria) Ltd, Bukuru, Jos, the payee of the cheques to put in evidence the relevant records of transac- e tion kept by Mobil (Nigeria) Ltd, Bukuru, Jos as pleaded in paragraph 9(c) of the Amended Statement of Claim. In civil cases, the onus of proving particular facts as averred in the pleadings is on the person that pleads them, and in the case f in hand, the appellants/respondents. It is only after this burden had been discharged that the respondents/appellants would be required to call evidence in rebuttal. See Ike v. Ugboaja (supra). g The complaint by the respondents/cross appellants is well founded that both the trial court and the Court of Appeal were wrong in shifting the initial burden of proof on them rather than on the appellants/respondents. See Egbunike v. h A.C.B. Ltd (1995) 2 N.W.L.R. (Part 375) 34 at page 53. On Issue (II), which is related to N21,000 with which the appellants/respondents accounts was debited as fees for the two legal mortgages executed, the appellants/respondents i averred as follows in paragraph 15 of the Amended State- ment of Claim:– “Furthermore, the plaintiff states that the said debit balance of N736,812.29 also includes a debit of the sum of N20,701.09 being j [1994 – 1996] 6 N.B.L.R. (PART II) (PART II) (SUPREME COURT OF NIGERIA) Wali JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 681 a payment made in favour of Izundu and Co (Solicitors) for perfecting a legal Mortgage of Certificate of Occupancy No. 95/344 for facilities in the tune of N90,000 and N650,000 from the defendants. The plaintiff denies ever applying for the said facilities as b alleged by the defendants in the said debit notes dated 27/7/82. The plaintiff shall at the hearing found on the defendants debit notes dated 27/7/82 and Zanda Izundu and Co’s bills dated 14/6/81 and 14/6/82. The plaintiff shall further at the hearing urge the c court to expunge the said sum of N20,701.09 from its accounts as debt owed to the defendants.” In answer to paragraph 15 of the Amended Statement of Claim (supra) the respondents/cross appellants pleaded thus d in paragraph 15 of the Further Amended Statement of De- fence:– “15. In answer to paragraph 15 of the statement of claim, the defendants aver that the sum of N20,701.90 paid to Messrs e Zanda Izundu and Co as fees for perfecting two legal mortgages were fees due and payable by the mortgagor under the Legal Practitioners Remuneration for Professional Ser- vices and the plaintiffs are therefore estopped from denying liability for the charges.” f It was the appellants’/respondents’ case that they never applied for credit facilities from the respondents/cross appellants in the sums of N90,000 and N650,000 respectively and g therefore the Legal Mortgages prepared by Zanda Izundu and Co were done without their authority. They denied being parties to their execution. In the present situation it was the respondents/cross h appellants who were asserting that the facts as pleaded by them exist and so the onus of proving the same fell on them and not on the appellants/respondents. What was the evidence presented by the respondents/cross appellants on this i issue? It was given by DW3 the Manager of the respondents/cross appellants and all he said was that the appellants/respondents have securities for loans in their company by way of two legal mortgages on Certificates of Occupancy j deposited with the respondents/cross appellants. There was [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Wali JSC 682 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. no evidence proving the grant of credit facilities, nor was a there any evidence that the appellants/respondents authorised the execution of the two legal Mortgages to wit, exhibit 1 and exhibit 2 tendered and rejected. Even if exhibit 2 ten- b dered and rejected were to be admitted, (which is not conceded) it would not have made the respondents/cross appellants’ case any better as no evidence of probative value was adduced. I therefore endorse the conclusion of the Court c of Appeal on the issue that:– “Even if loans were granted by the appellants to the respondents, it is not every time that a bank grants a loan to a customer that the customer is required to execute a deed of mortgage, prepared at the customer’s expense, on his property in favour of the bank as d security for the loan. Therefore, in order to recover from a customer or to make him liable for the fees charged by a Solicitor for the preparation of a mortgage deed, a bank has to lead credible and satisfactory evidence to show that it granted a loan to the customer e and that one of the conditions, subject to which the loan was granted and to which the customer agreed, was that the customer would execute a deed of mortgage, prepared at the customer’s expense, on his property as security for the loan. In the absence of such an agreement, there will be no legal basis for making the cus- f tomer liable for the Solicitor’s fees charged for the preparation of a mortgage deed. In the present case, there was no evidence before the learned trial Judge that the respondents ever agreed to bear the expenses of preparing the deeds of mortgage.” g The question of taking judicial notice that a mortgagor is debited with the fees for the preparation and execution of a deed of legal mortgage to secure loan facilities by the respondent/cross appellants does not arise since the facts as h alleged by the respondents/cross appellants were not proved. Issue II is answered in the negative. In the final result the main appeal fails and it is dismissed while the cross appeal succeeds in part and it is allowed to i that extent. The final order shall now read as follows:– 1. The appellants/respondents are granted a declaration that they are not indebted to respondents/cross appellants in the sum of N736,812.29 but in the sum of N520,070.98k. j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Wali JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 683 a 2. The appellants/respondents are granted declaration that the respondents/Cross-appellants are entitled to calculate interest on the sum of N520,070.98k only. b The respondents/appellants are granted N1,000 for the main appeal and the cross appeal against the appellants/ respondents. OGUNDARE JSC: I have had the privilege of reading, in c draft, the judgment of my learned brother Wali, JSC just delivered. I agree for the most part with him but wish to say a few words of my own. The plaintiff company herein was at all times material to d this case a customer of the first defendant bank. The plaintiff had sued the defendant and one Stanley Bassey Akpoke claiming:– “1. A Declaration of the court that the plaintiff is not indebted e to the first defendant to the sum of N736,812.29 as at 31st March, 1983. 2. A Declaration of the court that the plaintiff is indebted to the first defendant to the sum of N5,681.40 or any other f sum less than N736,812.29 as at 31st March, 1983. 3. A Declaration that the defendants were in error when they charged/debited the plaintiff’s account with interest of N117,939.91 calculated on a disputed sum/debt from 5/6/81 to 3/3/83. g 4. An Order of the court compelling the defendants to rectify their books of accounts to reflect the actual indebtedness of the plaintiff as at 31st March, 1983.” At an early stage in the proceedings on the application of the h plaintiff, the name of Stanley Bassey Akpoke was struck out and the action proceeded against the defendant bank. Plead- ings were ordered, filed and exchanged and, by leave of court amended. The case proceeded to trial on the plaintiff’s i amended Statement of Claim and the defendant’s further amended Statement of Defence. At the conclusion of trial, and after addresses by learned Counsel appearing for the parties, the learned trial Judge, in a reserved judgment, j found for the plaintiff and adjudged as follows:– [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 684 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

“In the light of the above I hold that the plaintiffs have proved a quite substantial part of their claim on a balance of probability. They are entitled to judgment. I therefore grant a declaration that the plaintiffs are not indebted to the defendants in the sum of N736,812.29 as at 31st March, 1983. I found as a fact that the b plaintiffs are indebted to the defendants in the sum of N116,717. How I arrived at this figure is carefully set out above. I further declare that the defendants can only calculate interest on the debt of N116,717. c The defendants are hereby ordered to rectify their books of account to reflect the findings of the court.” Being dissatisfied with the judgment of the trial court the defendant bank appealed to the Court of Appeal. The latter d court allowed the appeal, set aside the judgment of the court below and, in its stead, adjudged as hereunder:– “1. The plaintiffs/respondents are granted a declaration that they were not indebted to the defendants/respondents in the e sum of N736,812.29k as at 31st March, 1983. 2. The plaintiffs/respondents are granted a declaration that they were indebted to the defendants/appellants in the sum of N456,717 as at 31st March, 1983. f 3. The plaintiffs/respondents are granted a declaration that the defendants/appellants are entitled to calculate interest on only the aforesaid debt of N456,717 4. The defendants/appellants are hereby ordered to rectify their books of account to reflect the judgment.” g It is against the judgment of the Court of Appeal that the plaintiff company has now appealed to this Court on three grounds of appeal. The defendant also cross appealed against that part of the judgment of the court below where h the court had held that the defendant was not entitled to debit the plaintiff’s account with N63,353.96 in respect of three cheques drawn by the plaintiff in favour of Mobil (Ni- geria) Ltd, and that part where the plaintiff was held not li- i able to pay the sum of N20,701.09 being the cost of preparing mortgage deeds. Two questions are set down in the plaintiff’s briefs as calling for determination in respect of its appeal, that is to say: j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 685 a (i) Whether, in the circumstances of this case, the plaintiffs are discharged as drawers of the relevant cheques by reason of the provisions of section 48 of the Bills b of Exchange Act; and (ii) Whether the court below was correct in reversing the decision of the High Court regarding the sum of N44,820. c The defendant, with leave of this Court, filed an amended respondent’s brief in which it proferred arguments in support of its position as regards the plaintiff’s appeal and also arguments in support of its cross appeal. The plaintiff has d not filed a brief either in response to defendant’s objection to question (ii) or in response to defendant’s arguments on the cross appeal. At the hearing of the appeals however Mr T.E. Williams learned Counsel for the appellant proferred e oral arguments only in respect of question (i) Chief GOK Ajayi, SAN learned leading Counsel for the defendant, proferred oral arguments in respect of the two appeals. Before proceeding to determine the questions placed before us, I f need to briefly state the facts. The plaintiff was a customer of the defendant bank at its Gboko Branch in Benue State. The plaintiff lodged into its account a cheque for N150,000 on 19/6/80. The said cheque g was drawn by the plaintiff on its account with the First Bank of Nigeria Ltd, Yola branch and although the cheque was sent for clearance it was never seen again as it got lost in transit. The plaintiff however, drew out the money in full h before the cheque was cleared. The same fate befell two other cheques drawn by the plaintiff on its account with the First Bank of Nigeria, Yola Branch. The first cheque was for the sum of N90,000 and this amount was drawn in full on 3/10/80. The second cheque was for N100,000 lodged by the i plaintiff on 1/9/81 who thereafter withdrew the whole amount before it, too was cleared. Not having received value for the amounts of these cheques, the defendant on diverse dates debited the plaintiff’s account in the various sums of j these cheques. The amounts of the three cheques totalled [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 686 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

N340,000. The plaintiff also claimed to have made some a lodgements into his account totalling N63,353.96 but for which the account was not credited. The plaintiff also claimed that he delivered a cheque for N44,820 to the de- b fendant with instructions to pay the same into the account of E.D. Tsokwa and Sons but which was never done. The final complaint of the plaintiff was that its account was debited with a sum of N20,701.90 being payment in favour of c Izundu and Co Solicitors for perfecting a legal mortgage of its Certificate of Occupancy in respect of the facilities said to have been applied for by the plaintiff. The plaintiff denied ever applying for such facilities. The immediate cause of plaintiff’s action was a statement sent by the defendant to d the plaintiff which read that the plaintiff was, as at 31st March, 1983, owing the defendant the sum of N736,812.29.

Question (i): e The learned trial Judge had found as follows: “From the pleading and evidence the following facts emerged. That the plaintiffs on 9/6/80 lodged a cheque for N150,000 drawn on First Bank, Yola and meant for collection. That the defendants f instead of debiting plaintiffs account credited it and at the same time allowed the plaintiffs to start to withdraw the money, against all banking practices. The plaintiffs did not hear anything about this cheque until 5/8/81 when their account was debited with this amount. This was more than one year. The defendants did not no- g tify the plaintiffs that the cheque was not cleared. All that the third witness for the defendants told the court was that the cheque was presumed lost. The same thing happened to another cheque for N90,000. This cheque was paid into defendant’s bank on 3/10/80 h for collection. Against the long standing practice of the bank, the defendants credited the account of the plaintiffs instead of debiting it. plaintiffs were allowed to draw on the account. Defendants did not notify the plaintiffs that the cheque was not cleared as required by the Bills of Exchange Act. Then on 5/8/81 (pretty seven months i after) the account of the plaintiffs was debited. On enquiry by the plaintiffs, they were told that their cheque was presumed lost in transit. The plaintiffs lodged another cheque for N100,000 into their accounts with the defendants on 1st September, 1981. Their account was quickly credited without waiting for the cheque to be j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 687 a cleared. For more than 6½ months the plaintiffs did not hear anything about this cheque until when their account was debited and a debit note saying cheque presumed lost in transit forwarded to the plaintiffs”. . . b “The defendants agreed that the life of a cheque is six months. That if a cheque was paid in for collection, it is deemed cleared if it was not dishonoured or lost in transit. According to the evidence if it is dishonoured for any reason whatsoever, it must be returned c to the customer. If it is lost in transit, the customer will be notified. In the above three cheques for N150,000, N90,000 and N100,000, none was returned to the plaintiffs. The plaintiffs were not notified that the cheques were lost in transit until one year, 7 months and 6½ months respectively. In the circumstance the plaintiffs were d justified in believing that their cheques were cleared. Since the defendants did not give the plaintiffs notice of the alleged missing cheques within a reasonable time, they are grossly negligent and they must bear the consequences of their negligent act. Apart from e being negligent in giving notice the defendants violated the banking practice of allowing the plaintiffs to draw against uncleared cheques considering the magnitude of the amounts involved. By violating the banking practice and placing the various amounts in the plaintiffs’ credit, were the plaintiffs not justified in drawing f upon them? Of course they were. For Lord Lindley in Capital and Counties Bank Ltd v. Gordon (1903) A.C. 240 said:– ‘It must never be forgotten that the moment a bank places money to its customer’s credit, the customer is entitled to g draw upon it, unless something occurs to deprive him of that right’ If there was any fraud perpetrated, the defendants through their servants encouraged and aided it and they cannot be allowed to h benefit from their reckless acts. For if the defendants had adhered strictly to the banking practice of debiting the plaintiffs’ account and not paying on the uncleared cheques, this ugly situation would have not arisen. The defendants are vicariously liable for the reckless acts of its servants, since they acted within their actual, usual i or ostensible authority. By section 73 of Bills of Exchange Act Cap 35, a cheque is a bill of exchange drawn on a banker payable on demand. And by section 48 of the Act, where a bill is dishonoured by non-acceptance or by non-payment notice must be given to the drawer. And where such notice is not given any drawer or j endorser is discharged from liability. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 688 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

In the present case, the three cheques were not presented for pay- a ment. The plaintiffs were not given notice of non-payment within a reasonable time. In their evidence the defendants did not give evidence to the effect that cheques were forwarded to the paying bank and they got lost in transit. The evidence was that the b cheques were presumed lost. The defendants did not in respect of the three cheques observe the normal banking practice. In paragraph 6(a) of the Amended Statement of Defence, the defendants pleaded that they would produce evidence to the effect that the c plaintiffs had no money in their account with the First Bank, Yola. DW4 gave evidence and the defendants did not prove through him that the plaintiffs’ accounts with the First Bank, Yola was in the red. In the light of the above, I can see no justification for the defen- d dants to debit the Account of plaintiffs in the sum of N150,000, N90,000 and N100,000.” The Court of Appeal, per Adio, JCA. (as he then was) commenting on the application of section 48 of the Bills of Ex- e change Act observed:– “With reference to the question whether the respondents could rely on section 48 of the Bills of Exchange Act or any banking practice, the real position is that, in so far as this aspect of this case is f concerned, it was quite clear that the respondents did not specifically plead section 48 of the Bills of Exchange Act or any banking practice relating to dishonour or loss of a cheque and they did not place sufficient materials before the court in relation to the cheques to which exhibits ‘A’, ‘B’ and ‘C’ related to enable any- g one to reasonably infer that they were relying on section 48 of the Bills of Exchange Act or on any similar or relevant banking practice. The third PW was the Managing Director of the respondents and apart from the averment: The plaintiffs denied the transactions in paragraph 4 of the Amended Statement of Claim in relation to h the cheques to which the debit notes, exhibits ‘A’, ‘B’ and ‘C’ related, the following was the evidence of the third PW on the point:– ‘I know the defendants. They are bankers to the plaintiffs. i In 1981 the plaintiffs received debit notes from the defendants. On examination we found that we have nothing to do with those notes’. The position, being as stated above, the respondents could not properly or legally shift their position and rely on the provision of j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 689 a section 48 of the Bills of Exchange Act Cap 35 or on any banking practice having the same effect. Parties are bound by their pleadings and they will not be allowed to deviate from them. They will not be allowed to set up in court a case which is at variance with b their pleadings. See: Ehimare v. Emhonyon (1985) 1 N.W.L.R. (Part 2) 177 and Abaye v. Ofili (1986) 1 N.W.L.R. (Part 15) 134.” The learned Justice of Appeal further observed:– c “An official of the First Bank, Yola testified as the 4th DW and his evidence is at page 83 of the record of proceedings. He told the court the respondents had an account in the First Bank, Yola, and that cheques numbers 597857, 597884 and 144520 were in the series of cheques supplied by the bank to the respondents. He con- d cluded by saying that cheques number 597857 for N150,000, 597884 for N90,000 and 144520 for N100,000 were not presented to the First Bank, Yola, for payment. The aforesaid three cheques were the cheques drawn by the respondents on their account at the First Bank, Yola, and which they paid into their account in the ap- e pellants’ branch and from which account they immediately withdrew N340,000 before the appellants discovered that the cheques were lost and did not get to the First Bank, Yola, for necessary action. f The aforegoing showed certain features pertaining to the three cheques which make their case separate and distinct from the other cheques in question in this case. One feature is that the possibility of the respondents losing any sum of money or thing because of the loss of the cheques is nil. Another feature is that the respon- g dents were the drawers and the drawees of the cheques. The third feature is that the three cheques were lost; they were not dishonoured. If the respondents did not lose any sum of money or thing and were not likely to lose any sum of money or thing by the loss h of the three cheques, the question then is whether it was just, fair and equitable for the learned trial Judge to hold that they were not liable for the sum of N340,000 for which they were issued bearing in mind the fact that the whole sum of N340,000 had been withdrawn by the respondents from their account in the appellants’ i branch into which they paid the three cheques and the fact that until today the three cheques had not been presented to the First Bank, Yola, for payment out of the funds in the respondents’ account in that bank upon which the cheques were drawn. The obvious and reasonable answer is in the negative. Further, assuming j for the purposes of argument, that the three cheques were [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 690 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

dishonoured and not lost. It has been shown that the drawers and a the drawees of the three cheques were the respondents. The provision of section 50(2)(c)(i) of the Bills of Exchange Act Cap 35, is that notice of dishonour is dispensed with as regards the drawer, where the drawer and the drawee are the same person. The result is b that even if the three cheques had been dishonoured, the trial court should have applied the provision of section 50(2)(c)(i) of the Act and should have held the respondents liable for the said sum of N340,000 instead of discharging them for liability under section c 48 of the Act. Finally, on this point, it is clear from the provisions of the Bills of Exchange Act that it is not intended that if a bill is lost before it is overdue, the holder should have no remedy. The provision of section 69(1) of the Act is that where a bill has been lost before it is overdue, the person who was the holder may apply d to the drawer to give him another bill of the same tenor, giving security to the drawer if required to indemnify him against all persons whatever in case the bill alleged to have been lost is found again. Under the provision of section 70 of the Act, in any action or proceeding upon a bill, the Court may order that the loss of the e instrument shall not be set up, provided that an indemnity be given to the satisfaction of the court against the claims of any other person upon the instrument in question. Having regard to the reasons given above, the trial court erred in f law in holding that it could see no justification for the appellants to debit the account of the respondents in the sum of N150,000, N90,000, and N100,000.” It is contended in this appeal by the plaintiff that the Court g below was in error in holding that the plaintiff was a “drawee” of each of the three cheques under consideration. It is submitted that the drawee in each case, was the First Bank, Yola. plaintiff then contends that the Court below in h the circumstance was wrong in holding that section 50(2)(c)(i) of the Bills of Exchange Act applied. plaintiff further contends that section 48 of the Act applied. Mr Wil- liams in his oral address submits that the obiter dictum of this Court, per Adio JCA., in Egbunike and another v. Afri- i can Continental Bank S.C. 253/89, a judgment delivered by this Court on 31/2/95 (now reported in (1995) 2 N.W.L.R. (Part 375) 34) was given per incuriam. He submits that the drawer of a cheque is the person who writes the cheque and j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 691 a the drawee is the paying bank, while the person in whose favour the cheque is drawn is a specified person. He submits that the Court of Appeal was wrong in saying that the plain- b tiff was the drawer and drawee of the cheques when it could have said that the drawer and the specified person were the same. Learned Counsel contends that section 50(2)(c)(i) of the Bills of Exchange Act does not apply in this case but c section 45 of the Act applied and that by that section, the plaintiff is discharged. Chief GOK Ajayi, SAN for the defendant concedes it that the plaintiff was not a drawee of the cheques totalling d N340,000 because those cheques were drawn on First Bank, Yola, who was being requested to pay the amount of those cheques. He submits that First Bank of Nigeria, Yola was the drawee of those cheques while the plaintiff was both the e drawer and payee of the cheques. Learned Senior Advocate further submits that the concession he has made does not improve the position of the plaintiff in this appeal as that ground was not the only ground upon which the court below f gave judgment. He contends that the main ground upon which the court gave judgment had not been challenged in this appeal. Adio, JCA. had in Egbunike v. A.C.B. (supra) referred to g the drawer of a cheque drawn in the drawer’s favour on a bank as “drawer” and “drawee” of the cheque. It is contended in this case, and conceded to by Counsel for the defendant, that this is erroneous. I have no hesitation in agree- h ing with learned Counsel that when a person issues a cheque in his own favour and drawn on a bank, that person is a drawer and payee (or specified person) in respect of the cheque but the bank on which the cheque is drawn is the i drawee of the cheque. The statement in Egbunike v. A.C.B. to the contrary must be taken as made per incuriam. As Chief Ajayi has rightly pointed out, however, the Court below did not base its decision on this error alone. As can be j gleaned from the passage in the judgment of Adio, JCA. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 692 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. earlier quoted by me, there are other reasons given for al- a lowing the defendant’s appeal before the court below on this point. That Court found that the plaintiff did not lose any money or thing because of the loss of the cheques here con- b cerned. It also found that the three cheques were lost and not dishonoured. It, therefore, concluded that it would not be just, fair and equitable for the plaintiff who had withdrawn from his account with the defendant bank a total sum of c N340,000 covered by those cheques to be allowed to make away with that sum of money. These findings have not been challenged in this appeal. I have no reason whatsoever to interfere with the other reasons given by the court below for allowing the defendant’s appeal on the point under consid- d eration. Section 69 of the Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 provides for the right of a holder of a bill that is lost (such as the defendant is, in this case). Section 45 would not, on the evidence in e this case, apply in that, not only are the drawer and the payee one and the same person, it is in evidence that the cheques were never presented as they were lost. For the reasons given by the court below in the lead judgment of Adio, f JCA I too agree that section 48 could not be called in aid by the plaintiff in this case as it was never the basis of plaintiff’s case. Furthermore, the relevant cheques were never dishonoured, an essential requirement to make for the appli- g cation of section 48; they got lost. As the error made by the court below in referring to the plaintiff as the drawer and drawee of the relevant cheques has not occasioned a miscarriage of justice, I answer ques- h tion (i) in the negative. Question (ii):– As stated earlier in this judgment, an objection was taken by the defendant in his brief to question (ii). Question (ii) i would appear to be predicated on ground (2) in the plaintiff’s Notice of Appeal. The ground reads “(ii) The court below erred in law in reversing the decision of the High Court regarding the sum of N44,820. j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 693 a Particulars of Error (a) There was evidence which the High court accepted that although the defendants cannot say where the money b went to they did in fact accepted (sic) the lodgement with or payment to them by cheque in the sum of N44,820. (b) Since a cheque is a negotiable instrument, the mere fact that the original payee of the cheque was a person or per- c sons other than the plaintiff herein is immaterial in law. (c) There is no evidence that a notice of dishonour was ever given and so the drawer of the cheque is not discharged from any liability to the plaintiff.” d It is the contention of the defendant that the real substance in that ground involves a question of mixed law and fact. That being so, contends the defendant, the plaintiff ought to have sought and obtained leave of either the Court of Appeal or of e this Court to appeal on that ground. Subsection (3) of section 213 of the Constitution gives right of appeal from the Court of Appeal to the Supreme Court on question of fact or mixed law and fact only with the leave of the Court of Appeal or f the Supreme Court. It is on record that the plaintiff sought and obtained leave of the court below to appeal to this Court on questions other than questions of law alone. (See page 156 of the record of appeal). For that reason, therefore, the g objection is misconceived and is accordingly struck out. Question (ii) relates to the cheque for N44,820. The learned trial Judge found:– “The plaintiffs, paid into their A/C at Union Bank of Nigeria, h Gboko Cheque No.362037/055593 for N44,820. The cheque was paid in on the 24th February, 1981. The paying in slip bears Union Bank of Nigeria Ltd , Gboko. Although this paying in slip exhibits ‘E’ stated that the A/C to be credited was E.D. Tsokwa and Sons. i There was no such account with the defendants branch at Gboko. Did the defendants receive the lodgement? The defendants in paragraph 13(6)(iii) of the amended statement of claim pleaded thus:– “(iii) As regards the lodgement of the sum of N44,820 by Union j Bank, Gboko cheque allegedly lodged on 24/2/81, the [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 694 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

defendants deny receiving same and shall at the hearing re- a quire the strictest proof thereof.” In his evidence-in-chief DW3 stated as follows:– “The sum of N44,820 was not credited to the A/C of plain- b tiffs on 24/2/81. Exhibit ‘E’ shows that E.D. Tsokwa and Sons paid into this A/C cheque of N44,820. From the records I inherited, the only account we have in Union Bank Nigeria Ltd Gboko is for E.D. Tsokwa and Sons Co Ltd. Although the defendants accepted the lodgement of c N44,820, I cannot say where the money went to. The stamp used in receiving the cheque is not meant for that purpose. It had no date. It is not in dispute that the plaintiffs have two accounts in d the defendants Gboko Branch. All in the name of E.D. Tsokwa and Sons Co Ltd. If the plaintiffs perhaps inadver- tently wrote in exhibit ‘E’ Credit E.D. Tsokwa and Sons it is no justification for the defendants who accepted the lodgement to have not credited the account of the plaintiffs, e knowing fully well that E.D. Tsokwa and Sons have no account with them. DW3 admitted that the defendants accepted the lodgement. It is defendants Gboko cheque. Im- mediate clearance was no problem. DW3 admitted that the accounts of the plaintiffs was not credited. I see no legal or f equitable justification for not crediting the account of the plaintiffs. The argument that an official stamp not meant for receiving lodgement was used appears to me to be porous. Whatever stamp that was used, the truth was that the g lodgement was received by the defendants branch at Gboko. The account of the plaintiffs must be credited with this sum of N44,820 since the defendants did not contest that the cheque was dishonoured and returned to the plaintiffs.” On appeal to the Court of Appeal, that court, per Adio, JCA. h observed:– “If there is any dispute or controversy on the question whether a customer paid a sum of money into his account in a bank, the customer may prove the payment by the oral evidence of the person i who paid the money into the bank for and on behalf of the customer. Alternatively, he may prove it by producing the bank teller duly stamped with the bank’s official stamp, bearing the initials of an official of the bank and showing that the aforesaid sum was paid into the bank in favour of the customer. See Aeroflot v. j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 695 a United Bank for Africa (1986) 3 N.W.L.R. (Part 27) 188. In this case, there was evidence before the trial court that the ‘official stamp’ on the teller (exhibit ‘E’) was not the type of official stamp being used to stamp tellers used for making payments into cus- b tomers’ accounts and that the stamp did not contain any date. Fur- ther, there was no evidence that the mark or initial of the person, who stamped and signed the teller, was that of any official of the appellants’ branch at Gboko. A customer of a bank who fills a c bank teller and gives the teller and the money to which it relates to just any of the bank’s employees for payment into this account does so at his own risk. If it turns out that the bank employee in question is not an official duly authorised to accept or receive such payment for and on behalf of the bank, the bank will not be vicari- d ously liable if the employee fraudulently converts the money to his own use. See Salawu v. Union Bank (1986) 4 N.W.L.R. (Part 38) 701. Failure to prove that the initial on the teller, exhibit ‘E’, was that of an employee of the appellants is fatal to the respondents’ case. Finally, on this point, the evidence of third DWs at page 77 e of the record, was inter alia, as follows:– ‘A cheque for N44,820 was not lodged into plaintiffs’ A/C. The plaintiffs operate A/C in the name of E.D. Tsokwa and Sons Company Ltd’. f The averment in paragraph 1 of the Amended Statement of Claim, at pages 33 to 39 of the record, was, inter-alia, that the plaintiff (respondents) was at all material times a Limited Liability Com- pany incorporated in Nigeria carrying on business at Gongola, Pla- teau and Benue States as the defendant (appellants) at all material g times well knew. The appellants (defendants) in paragraph 1 of their Amended Statement of Defence, at pages 64, 60, 67 of the record, admitted paragraph 1 of the Amended Statement of Claim. If the appellants knew very well at all material times that the re- h spondents, E.D. Tsokwa and Sons Co Ltd, their (‘appellants’) customers, were registered in Nigeria as a Limited Liability Com- pany, the appellants could not properly or legally have credited the respondents’ account with the sum of N44,820 paid into their branch at Gboko in favour of another body known as E.D. Tsokwa i and Sons in the same way as it could not properly or legally credit the account of E.D. Tsokwa and Sons, if one was in its Gboko branch, with money paid into the appellants’ branch in favour of the respondents. The situation is the same even if all the shares in E.D. Tsokwa and Sons Co Ltd , are held by E.D. Tsokwa and Sons j because an incorporated body is a separate and distinct legal [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 696 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

entity from its members. See Salomon v. Salomon and Co., (1897) a A.C. 22.” plaintiff in his brief contends as follows:– “Points (a) and (b) go to the question whether the defendant bank b in fact received the lodgement of the money whilst point (c) raises the further question whether, if they did, it was proper for them to credit the plaintiff’s account. Each of these question will now be considered. c 4.3. Was the Money in Fact Lodged? The learned trial Judge relied on the admission made by DW3 who after all was the Bank Manager on the date he was giving evidence and it must be presumed to have studied the records of the bank relating to the matter. The evidence is on page 77 lines 12– d 17 of the Record. The plaintiff submits that the Court of Appeal ought not to have disturbed the findings of the learned trial Judge on the facts. 4.4. Vicarious Liability of the Bank: It is submitted that the facts e of Salawu v. Union Bank (supra) are materially different from the facts of this case. That case cannot therefore apply and the Court of Appeal was, with respect, in error in applying it. f 4.5. Crediting plaintiff’s Account: It is submitted that since the enactment of the Bills of Exchange (Amendment) Act, 1964 cheque presented for payment by or through a bank to be applied after collection for the account of its customer (even cheque) do not require any endorsement. The bank asked to g collect may decline to do so if it fears that it may be liable to the payee what it cannot do is to agree to collect and then do nothing.” In reply the defendant contends as follows– h “The real issue for determination in connection with this sum of N44,820 is whether, where A pays a cheque to a Bank with instructions to pay it to the Account of B who has no account with the Bank and the Bank accepts it as such, can A subsequently sue i the Bank for the value of the cheque on his own account if the cheque is not credited to B’s non-existent account. The appellant has not advanced any arguments in support of the proposition that a Bank who receives a cheque for payment to the account of ‘A’ who has no account with it is liable to B the payer j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 697 a of the cheque for failing to pay the value of the cheque to A’s non- existent account. It is with the greatest respect, an absurd proposition to expect or to b affix liability to a Bank who receives a cheque which it is required to pay to A who has no Account with it, to collect the proceeds of the cheque and to pay the same to B merely because (B) happens to be the payer.” c In his oral submission before us Chief Ajayi, SAN submits that it was the payee of the cheque for N44,820, that is, E.D. Tsokwa and Sons that could claim in respect of the cheque and not the plaintiff, that is, E.D. Tsokwa and Sons Com- d pany Ltd. It is not in dispute that the cheque for N44,820 drawn in favour of E.D. Tsokwa and Sons was paid to the defendant bank to the credit of E.D. Tsokwa and Sons. The teller (ex- e hibit E) shows that the name of the account holder entered in it is “E.D. Tsokwa and Sons”. The defendant accepted the lodgement but did not credit plaintiff’s accounts with the said sum of N44,820. It has not been disclosed by the defen- f dant what happened to the money. Exhibit E shows that the sum of N44,820 was to be credited to the account of E.D. Tsokwa and Sons which had no account with the defendant bank. It has not been shown that E.D. Tsokwa and Sons was g one and the same person as E.D. Tsokwa and Sons Com- pany Ltd, an incorporated body. The plaintiff can, therefore, not complain that its account was not credited with the sum of N44,820, the said amount, by exhibit E, was not meant to be credited to its account. On the whole, I am not satisfied h that the plaintiff has successfully faulted the reasoning of the court below, per Adio, JCA. in refusing this item of plaintiff’s claim. i Consequently, I answer question (ii) in the affirmative. And with this conclusion I must hold, and I do so hold, that plaintiff’s appeal fails and it is accordingly dismissed. I now turn to the defendant’s cross appeal. This relates to j two issues, that is to say: the issue of three cheques drawn [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 698 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. by the plaintiff in favour of Mobil (Nigeria) Limited and (2) a the cost of preparing a mortgage deed. The Mobil Cheques: The plaintiff, in paragraph 9c of its amended statement of claim, pleaded thus:– b “9. The plaintiff at its expense engaged a firm of Chartered Ac- countants viz: Ojike, Okechukwu and Co 55, Western Ave- nue, Lagos, to investigate its account with the defendants Gboko Branch. The result of the investigation reveals that c the plaintiff’s indebtedness with the defendant has been grossly inflated and made up as follows: xxxxxxxxxx xxxxxxxxxxx xxxxxxxxx xxxxxxxxxx “C. Discrepancies in bank statement over cheques issued by the d company. Date Cheque No Value Amount Debited Discrepancy 30/4/79 362037/000102 364.20N38,107.32 N37,743.12 26/9/79 126 15,418.70N27,413.56 N11,994.86 e 5/l/81 444 137.71N13,753.71 N13,616.00 N63,353.98 The plaintiff shall at the hearing rely on the above-mentioned cheques and the corresponding stamps and the defendant is hereby f given notice to produce the originals of same. During trial the plaintiff will urge the Honourable Court to strike out all items of Discrepancies in bank statement over cheques issued by the company totalling N63,353.96 which forms part of the said total debit balance of N736,812.29 in the plaintiff’s account g with the defendant. The plaintiff further states that the said cheques and sums hereto referred to in this paragraph were payment made to Mobil (Nigeria) Limited, Bukuru, Jos, and the plaintiff shall at the hearing found and rely on relevant records of the h transaction kept by Mobil (Nigeria) Limited, Bukuru in their normal course of duty.” The defendant replied thus:– “13(c) In answer to the discrepancies alleged in paragraph 9C i of the statement of claim, the defendants aver as follows:– (i) The plaintiffs’ cheque Number 000102 of 30/4/79 was drawn for the sum of N38,107.32 and not for N364.20 only. j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 699 a (ii) Their cheque No. 000126 of 26/9/79 was drawn for N27,413,56 and not for N15,418.70. (iii) Their cheque No. 000444 debited against the plain- b tiffs, was drawn for N13,753.71 on 9/1/81 and not for N137.71. The defendants hereby give notice that at the hearing of this suit, they will rely on all the wasted cheques referred to in this paragraph.” c In respect of this item of claim the learned trial Judge found: “The plaintiffs in their paragraph 9(c) of the Amended statement of claim, contended that they issued a cheque No. 362037/000102 dated 2/4/79 for N364.20. The account of the plaintiffs, was deb- d ited with N38,107.32. They tendered exhibit F2 to support their case. exhibit F2 is the counterfoil of the original cheque. Although exhibit F2 contains so many counterfoils, the relevant counterfoil for this case is the first one.” e The defendants in paragraph 13(c)(i) pleaded as follows:– “(i) The plaintiffs cheque number 000102 of 30/4/79 was drawn for the sum of N38,107.32 only. The defendants hereby give notice that at the hearing of this suit, they will rely on all the wasted cheques referred to in this paragraph.” f The plaintiffs tendered exhibit F2 to prove that cheque No. 000102 of 2/4/79 was for N364.20. Defendants pleaded that the cheque was for N38,107.32. There was no evidence whatsoever to support defendants assertion. Surprisingly the original cheque which ought g to be in the possession of the defendants was not produced. In fact defendants gave no evidence to support their pleading. I have no choice but to accept the evidence of the plaintiffs, that their account was wrongly inflated by N37,743.12. The correct debit is N364.20 and not N38,107.12. The account of the plaintiffs should h be credited with N37,743.12. On exhibit F2 also, the plaintiff issued a cheque No. 000126 dated 6/6/79 for N15,418.70. plaintiffs account was debited with N27,413.56 instead of N15,418.70. The defendants in paragraph c i 13( )(ii) of the Amended Statement of Defence denied this in the following words:– “(ii) Their cheque No. 0001126 of 26/9/79 was drawn for N27,413.56 and not for N15,418.70.” The defendants stated that at the hearing they would rely on the j wasted cheques. [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 700 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

At the hearing the defendants did not produce the wasted cheque a to support the averment. In fact the defendants gave no evidence at all about this cheque. Exhibit F2 showed that the amount drawn on that cheque was N15,418.70. I have no other evidence to contradict this. I accept it as true. The plaintiffs account should be cred- b ited with N11,994.86. This is the difference between N27,413.56 and N15,418.70. Plaintiffs account was again debited with the amount of N13,753.71. Cheque No. 000444 of 9/1/81, exhibit F1, was for the c sum of N137.71. The defendants by their paragraph B, 13(c)(iii) pleaded as follows:– “(iii) Then cheque No. 000444 debited against the plaintiffs was drawn for N13,753.71 on 9/l/81 and not for N137.71.” d The defendants did not produce the wasted cheque to support their contention. Plaintiffs tendered exhibit F1 to support their claim. I have no reason to doubt the genuineness of exhibit F1, there being no other evidence to contradict it. The plaintiff’s account should be credited with the difference between N13,753,71 and N137.71 e i.e. N13,616.” Commenting on defendants attack on the findings of the learned trial Judge, the Court below, per Adio, JCA, said:– “The main or fundamental issue, in this connection, is whether the f appellants or the respondents had the burden of proving the amount for which each of the cheques in question was issued. The best evidence of the amount for which each cheque was issued was the (wasted) cheque itself which, from the normal course of things, g should ordinarily be in possession of the appellants who were the bankers that retained it when it was presented for payment. In fact, the appellants after stating in paragraph 13(c) of the Amended Statement of Defence what they contended was the correct amount for which each of the cheques in question was issued, averred h ‘The defendants hereby give notice that at the hearing of this suit, they will rely on all the wasted cheques referred to in this paragraph’ It is sufficient, in this connection, to say that the appellants who i were in possession of the wasted cheques relating to the alleged inflated sums having withheld the cheques, the presumption is that the wasted cheque, if produced, would have been adverse to the case of the appellants. See section 148(d) of the Evidence Act. There is, therefore, no valid legal basis for setting aside the j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 701 a judgment of the trial court on this aspect of the case whatever view one may take of the complaint of the appellants about what the trial Judge did with exhibit ‘F1’ and ‘F2’.” b This passage has now come under attack in the defendant’s cross appeal. The main contention of the defendant is that the Court below wrongly placed the burden of proof on the defendant. It c is argued thus:– “It is trite law that he who asserts must prove. Here, if no evidence were led on either side, the plaintiff would fail in its claim. Thus the initial burden clearly lay on the plaintiff to prove:– d (i) That it had drawn the particular cheques for the specific amount pleaded; (ii) That Mobil (Nigeria) Limited had only received those specific amounts; e (iii) That the defendant had nonetheless debited the plaintiff’s account with a large amount than that for which the cheque had been drawn and which had been paid to Mobil (Nigeria) Limited.” The necessary statutory provisions relating to burden of f proof in civil cases are to be found in sections 135–140 of the Evidence Act Cap 112 Laws of the Federation of Nige- ria, 1990. Generally, a party who makes allegations in a pleading should produce evidence to substantiate them as g part of his case, and it is not sufficient for him to rely upon the emergence of evidence from the opposite party for the purpose of proving allegations in his own pleading per Ab- bott, FJ in Akinfosile v. Ijose (1960) 5 F.S.C. 192, 198; h (1960) S.C.N.L.R. 447. The onus was on the plaintiff to prove the allegations made by it in paragraph 9C of its amended statement of claim; it was not for the defendant to disprove those allegations. The Court below was, in my re- i spectful view, in grave error to place the burden on the defendant to prove the amounts on the relevant cheques involved in paragraph 9C. What is the evidence led by the plaintiff in support of para- j graph 9C? PW1, Michael Opeseyi testified:– [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 702 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

“These are two cheque stuffs (sic) that were handed over to the ex- a ternal auditors . . . There were discrepancies between cheque stuff (sic) and cheque leaflets.” Cross-examined, he admitted:– b “The amount in one cheque leaf was altered from N500 to N1,500. I don’t know whether the alteration was reported to the police.” PW2 also gave evidence to the like effect. He testified thus:– “The plaintiffs give us all relevant materials to enable us to audit c the accounts. We investigated the accounts up to 31st March, 1983. We discovered some debits and the defendants could explain them. We found some lodgements not credited. We did not contact the defendants. We noticed some discrepancies in the cheques issued. The amounts on the leaflets were different from d the stuffs (sic).” PW1 made no attempt to identify the cheque stubs that related to the allegations in paragraph 9C. Nor did he explain why the relevant wasted cheques were not tendered in evi- e dence. Neither PW1 nor PW3 who was the sole signatory to the plaintiff’s two accounts, gave evidence in support of paragraph 9C. Having admitted that there were discrepancies between cheque stubs and cheque leaflets, the duty was f placed on the plaintiff to prove that that was not the case with the cheques issued in favour of Mobil (Nigeria) Ltd. This it failed to do. In such a situation it could not be said that plaintiff proved that part of its case. g The court below applied against the defendant the presumption in section 149(d) (formerly 148(d) of the Evidence Act, to the effect that:– “Evidence which could be and is not produced would, if produced, h be unfavourable to the person who withholds it.” There was no evidence that the defendant withheld from the plaintiff the wasted cheque leaves that would have resolved the issue. Where the defendant after being served with no- i tice to produce the wasted cheques failed to do so, the plaintiff ought to have led secondary evidence, such as evidence from Mobil (Nig.) Ltd as to the amounts they actually received, to prove the amounts on those cheques. It is for a j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 703 a plaintiff to prove his case and not for the defendant to disprove it. I do not share the view that section 149(d) applies where a defendant fails to tender in evidence documents b which the plaintiff has the primary duty of establishing before the court. After all, a defendant who is satisfied that the plaintiff has failed to discharge the onus placed on him (plaintiff) by section 137(1) of the Evidence Act is entitled c to rely on the evidence of the plaintiff without calling any evidence himself. See Nasr v. Berini (1968) 1 All N.L.R. 274. Section 137(1) provides:– “137(1) In civil cases the burden of first proving the existence or d 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 presumption that may arise on the pleading.” e Not having discharged the burden on it, the onus did not shift to the defendant as provided in subsection (2) of section 137. The two courts below, with respect, were in error to find against the defendant in respect of the allegations made by the plaintiff in paragraph 9C of its Amended f Statement of Claim. The sum of N63,353.96 is to be added to the amount credited to the defendant by the court below:– “The Cost of Preparing the Mortgage Deed:– g plaintiff pleaded thus:– Furthermore the plaintiff states that the said debit balance of N736,812.29 also includes a debit of the sum of N20,701.09 being payment made in favour of Izundu h and Co (Solicitors) for perfecting a legal mortgage of Certificate of Occupancy No. 95/344 for facilities in the tune of N90,000 and N650,000 from the defendants. The plaintiff denies ever applying for the said facilities as alleged by the defendants in the said debit notes dated i 27/7/82. The plaintiff shall at the hearing found on the defendants debit notes dated 27/7/82 and Zanda Izundu and Co’s bills dated 14/6/81 and 14/6/82. The plaintiff shall further at the hearing urge the court to expunge the said sum of N20,701.09 from its accounts as debt owed j to the defendants.” [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 704 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The defendant, in answer, pleaded:– a “In answer to paragraph 15 of the statement of claim the defendants aver that the sum of N20,701.09 paid to Messrs Zanda Izundu and Co as fees for perfecting two legal mortgages were b fees due and payable to the mortgagor under the Legal Practitio- ners Remuneration for professional services and the plaintiffs are therefore estopped from denying liability for the charges. The deed of Legal mortgage and the deed of third party mortgage both dated 20th May, 1982, for the sum of N90,000 and N650,000 c respectively shall be relied on at the hearing of this suit.” Testifying on the issue, PW1 deposed:– “The account of the plaintiffs was debited with N20,701.09 for an unauthorised job. We did not authorise one Izundu to do a job for d us, but the bank debited our Account. After the defendants had debited the plaintiff’s account, they sent bills from one Izundu to the plaintiffs. These are the bills to the plaintiffs by the defendants.” e PW3, Emmanuel Danjuma Tsokwa, the plaintiff’s Managing Director also testified and deposed:– “I do not know one lawyer Izundu. He has not appeared in the transactions I had with the defendants. I never took any credit fa- f cilities from the defendants to justify lawyer Izundu carrying out legal duties on my behalf. I never took out a mortgage with the defendants. The defendants had no power to deduct N20,000 from my account to pay for the preparation of mortgage agreement.” Later in his evidence, he said:– g “I observed that A/C No. I was debited with this N21,782.82. I did not authorise the defendants to sign deed of legal mortgage. My signature never appeared in any legal mortgage. If there was any signature it was forged. h I never took a loan of N90,000 from the defendants. Nor did I take a loan of N650,000 in 1982.” When cross examined, he testified:– “I never deposited Wukari Local Government Certificate of Occu- i pancy Nos. 571 and 572 with the defendants. I have not got such C of Os. I did not apply to Gongola State Government for consent to Mortgage these plots. I have a Gongola State Certificate of Occu- pancy No. 133. I did not apply to Gongola State Government to mortgage it I did not mortgage this C of 0 to the defendants for j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 705 a N650,000 I have a Certificate of Occupancy No. GS 544. I gave it to the defendants to enable them import Peugeot Pick Up Vans for me. I did not mortgage it for the sum N90,000. These Certificates of Occupancy were deposited as security to enable them to import b cars for me. I did not intend to import the cars. plaintiffs had enough money to import these cars. Our bankers guaranteed us in the Central Bank for the costs of the vehicles to be imported. This was why I handed the Certificate of Occupancy to the defendants. c plaintiffs have a Security. The Company Secretary had no authority to sign any letter.” To further questions, he testified:– “We requested for two loans totalling N750,000 from the defen- d dants. I do not know who signed for Director and Secretary of plaintiffs in a Mortgage Deed of N650,000. I deny knowing who signed for our company in a Mortgage Deed for N90,000 . . . I did not mortgage my two plots.” e Re-examined, PW3 explained:– “The Certificate of Occupancies (Sic) No. GS 133 and GS 544 were given to the ‘The plaintiffs, have securities for loans in our Company. They are legal mortgages. Two in number. The first legal mortgage is for N650,000 plaintiffs signed it. It was stamped f and registered.” After the document had, in a ruling, been admitted in evidence the witness continued:– g “There is another legal mortgage for N90,000. It is between the plaintiffs and the defendants. It was stamped and registered. It was signed by a representative of the plaintiffs.” Concluding his evidence in chief, the witness said:– h “exhibit ‘M’ was prepared by Zanda Izundu and Co Solicitors re- siding at Anugu. He was paid and the account of the plaintiffs debited.” Cross-examined, the witness deposed:– i “Legal mortgage is an agreement between the mortgagor and mortgagee. Both parties to the agreement must sign and they must put their seals on the agreement. E.D. Tsokwa and Sons did not sign as mortgagor. E.D. Tsokwa and Sons cannot enter into a binding legal agreement. exhibit ‘N’ has been in our custody since j 1982. There was an application for the loan of N650,000.” [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC 706 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

The learned trial Judge resolved the issue thus:– a “The defendants tendered exhibit ‘N’ as one of the alleged legal mortgages. It was headed third party legal mortgage. The Mortga- gor was Emmanuel Danjuma Tsokwa and Sons. The Mortgagees b were the defendants and the plaintiffs were the customer. The plaintiffs never signed the exhibit ‘N’. According to the defendants the party to pay the legal fees of N20,701.09 was the mortgagor. The Mortgagor in exhibit ‘N’ was Emmanuel Danjuma Tsokwa and Sons and not the plaintiffs who were named as cus- c tomer. It was wrong therefore, for the defendants to debit the accounts of the plaintiffs. The second legal mortgage for N650,000 was not properly executed. The purported deed of mortgage was not signed and sealed d by the defendants. It was rejected in evidence and marked exhibit ‘2’ rejected. There was no sound basis for debiting the account of the plaintiffs with the sum of N20,701.09.” On appeal to the Court below, that court, per Adio, JCA. ob- e served:– “. . . in order to recover from a customer or to make him liable for the fees charged by a Solicitor for the preparation of a mortgage deed, a bank has to lead credible and satisfactory evidence to show f that it granted a loan to the customer and that one of the conditions, subject to which the loan was granted and to which the customer agreed, was that the customer would execute a deed of mortgage, prepared at the customer’s expense, on his property as security for the loan. In the absence of such an agreement, there g will be no legal basis for making the customer liable for the Solici- tor’s fees charged for the preparation for a mortgage deed. In the present case, there was no evidence before the learned trial Judge that the respondents ever agreed to bear the expenses of preparing the deeds of mortgage.” h This passage has come under attack in the cross appeal. I have given careful consideration to the submissions of the defendant on this issue. I regret I am not persuaded to find in defendant’s favour. I agree entirely with the observations i above of the Court below. The defendant led no evidence of the grant of facilities to the plaintiff requiring the latter to execute a deed of legal mortgage to secure the facilities. On the contrary DW3 said that plaintiff overdrew on his account j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ogundare JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 707 a in an irregular manner. The position taken by the defendant in this case was that E.D. Tsokwa and Sons was not a legal person. Yet exhibit N shows it was the mortgagor, and not b the plaintiff. Indeed, the deed was not executed by the plaintiff. In the absence of clear evidence that the plaintiff agreed to bear the cost of the legal mortgage executed by E.D. Tsokwa and Sons, I cannot see how it could be made liable c for the cost. In the circumstances, I uphold the decision of the two courts below disentitling the defendant to claim from the plaintiff the legal bill of N20,701.09. In the net result, the cross appeal succeeds as regards the d issue of N63,353.96 on the cheques to Mobil (Nigeria) Lim- ited but fails on the issue of the legal bill of N20,701.09. Declarations (2) and (3) made by the Court below in favour of the plaintiff are varied by me to read “the sum of e N520,070.96” instead of “N456,717” Subject to this variation I affirm the judgment of the Court below and dismiss the plaintiff’s appeal. It is for the reasons I have given above that I agree with the f conclusion reached by my learned brother, Wali, JSC that the plaintiff’s appeal be dismissed and the defendant’s cross appeal allowed in part. I abide by the order for costs made by my brother, Wali, JSC. g OGWUEGBU JSC: I have had the advantage of reading in draft the judgment of my learned brother Wali, JSC just delivered. I agree with his reasoning and conclusion. I adopt them as mine. I abide by the consequential order of costs h contained in the lead judgment. MOHAMMED JSC: This appeal is without any merit and for the reasons given by my learned brother, Wali, JSC., in his judgment, with which I am in agreement, I will also dismiss i it. Against all banking practice, the Managing Director of the appellant, purported to have paid in money into his company’s account with the respondent, by using bogus cheques j drawn on an account which he maintained with the First [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC 708 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R.

Bank, Yola. At the time the Yola cheques were presented for a lodgement in appellant’s account with the respondent’s branch at Gboko, Mr E.D. Tsokwa had no funds in his account in First Bank, Yola. Nevertheless, the Manager of re- b spondent’s bank in Gboko, Mr Akpoke, who seems to be in connivance with the appellant to defraud the respondent’s branch at Gboko, permitted Mr Tsokwa to withdraw equivalent sums from his account. This permission was given c against all banking practice, because the Manager did not wait for the cheques to be cleared through the Clearing House. To make the case more complicated, the cheques drawn on d First Bank, Yola, were not credited to the appellant’s account in Gboko and the Manager of the respondent did not present them for payment at Yola. They all “mysteriously vanished” and could not be traced. e From the facts above, the appellant had lost nothing in the process but took out a lot through manipulation of bogus cheques. I also agree with my learned brother, Wali, JSC., that the f cross appeal should succeed in part. The main appeal is dismissed. I abide by all consequential orders made, including the assessment of costs. IGUH JSC: I have had the privilege of reading in draft the g leading judgment just delivered by my learned brother, Wali, JSC. and I agree with the reasoning and conclusions therein reached. h A close study of the pleadings and the record of proceedings in this case clearly reveals that section 48 of the Bills of Exchange Act was neither relied upon by the plaintiff in its statement of claim nor at the trial. Without doubt, it is clearly unnecessary to plead law, statutes or sections thereof i before reliance can be placed on them. But material facts which lead to the legal result sought to be relied upon must be fully pleaded. In other words, where the case of a party depends on some law, statute or sections thereof, all he is j [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC E.D. Tsokwa and Sons Company Ltd v. Union Bank of Nigeria Ltd 709 a required to do is to plead completely the material facts necessary to bring his case within that law or statute. See Read v. Brown (1989) 22 Q.B.D. 128. Once such material facts b have been sufficiently pleaded, the inference to be drawn from such pleaded facts and the particulars of the law to be relied upon for such an inference need not be pleaded. See Re:Vandervell’s Trust (No. 2), White v. Vandervell Trustees c Ltd (1974) 3 A.E. 205 at 213, Anyanwu v. Mbara (1992) 5 N.W.L.R. (Part 242) 386 at 398 etc. In the present case, it cannot be seriously contended that the plaintiff placed sufficient materials before the court in d relation to the various cheques in issue for any suggestion that section 48 of the Bills of Exchange Act would be relied upon. I think the court below was perfectly right when it held that the plaintiff not having pleaded facts in respect of e which the provisions of section 48 of the Bills of Exchange Act would lawfully apply could not properly shift ground and turn round to rely on the said Act. See J.O. Idahosa v. D.N. Oronsaye (1959) 4 F.S.C. 166; (1959) S.C.N.L.R. 407. A party is bound by his pleadings and shall not be permitted f to set up a different case. See Aderemi v. Adedire (1966) N.M.L.R. 398, A.C.B. Ltd v. A.G. Northern Nigeria (1967) N.M.L.R. 231 etc. It is not open to a party to depart from his pleadings and set up an entirely new case at the hearing. See g Adenuga v. L.T.C. (1950) 13 W.A.C.A. 125, Ehimare v. Emhonyon (1985) 1 N.W.L.R. (Part 2) 177 etc. At all events section 48 of the Bills of Exchange Act provides thus h “Subject to the provisions of this Act, when a bill has been dishonoured . . . by non-payment, notice of dishonour must be given to the drawer . . . and any drawer . . . to whom such notice is not given is discharged.” i It seems to me plain that section 48 of the Act cannot be applicable to the undisputed facts of this case. This is because that section of the law would appear to apply only to cases where a bill has been dishonoured by non-acceptance or j non-payment. This is unlike the evidence in the present case [1994 – 1996] 6 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC 710 Nigerian Banking Law Reports [1994 – 1996] 6 N.B.L.R. where the cheques in issue were never presented for pay- a ment so that no question of non-acceptance or non-payment did therefore arise. There is next the undisputed facts that the cheques in issue b were never in fact paid or debited to the plaintiff’s account, that they were lost and were never dishonoured and that the plaintiff did not therefore lose their value or any part thereof. In these circumstances, it is clear to me that the court below c was absolutely right to have refused to order the defendant to make a donation of the N340,000 in issue to the plaintiff. On the cross appeal, it is clear that the court below rightly identified the fundamental issue arising there from which is d whether it was the plaintiff or the defendant that had the burden of proving the amount for which each of the cheques in question were issued. In this regard, it must be noted that the defendant duly tendered the Bank statement of the plain- e tiff’s account. It is clear to me that the onus was on the plaintiff who was contending that the Bank statement did not correctly represent the true state of his account to establish what he alleged. This he failed to do. I entertain no doubt f that the finding of the Court of Appeal that the defendant failed to discharge the burden of proof placed on it in respect of the three cheques in issue was erroneous on point of law and totally unjustifiable. g It is for the above and the more detailed reasons contained in the leading judgment of my learned brother, Wali, JSC. with which I am in complete agreement, that the main appeal fails and is hereby dismissed. The cross appeal suc- h ceeds in part and it is allowed to that extent. I subscribe to the consequential orders together with those as to costs therein made. Appeal dismissed. i Cross appeal allowed in part.