Legalpedia Citation: (2024-06) Legalpedia 12250 (CA)

In the Supreme Court of Nigeria

Fri Jun 21, 2024

Suit Number: SC.958/2015

CORAM

Uwani Musa Abba Aji Justice of the Supreme Court of Nigeria

Helen Moronkeji Ogunwumiju Justice of the Supreme Court of Nigeria

Chidi Nwaoma Uwa Justice of the Supreme Court of Nigeria

Stephen Jonah Adah Justice of the Supreme Court of Nigeria

Abubakar Sadiq Umar Justice of the Supreme Court of Nigeria

PARTIES

HAJIA UMMA MUKTAR AHMED MOHAMMED

APPELLANTS

NIGERIA DEPOSIT INSURANCE CORPORATION

RESPONDENTS

AREA(S) OF LAW

BANKING LAW, FINANCIAL INSTITUTIONS, CIVIL PROCEDURE, EVIDENCE LAW, CONTRACTS, COMMERCIAL LAW, COMPANY LAW, DEBT RECOVERY, GUARANTEES

SUMMARY OF FACTS

The case arose from a loan facility granted by Commercial Trust Bank Limited to Credit and Finance Limited. The respondent (NDIC) as liquidator of the defunct Commercial Trust Bank discovered indebtedness of N14,795,399.71k owed by Credit and Finance Limited. The loan was approved due to the involvement of Alhaji Muktar Ahmed Mohammed, who was both Chairman of the failed bank and Credit and Finance Limited.

The respondent initiated legal action seeking recovery of the outstanding sum plus interest. The trial court found in favor of the respondent and granted all reliefs sought. The Court of Appeal affirmed the decision but reduced the interest rate from 21% to 18% per annum. The appellant (wife of the deceased chairman and administrator of his estate) appealed to the Supreme Court.

HELD

1. The appeal was dismissed as lacking merit.
2. The concurrent findings of the lower courts were affirmed.
3. The interest rate of 18% per annum was upheld.
4. Costs of N500,000 were awarded in favor of the respondent.

ISSUES

1. Whether the Court of Appeal was right in dismissing the appellant’s contention regarding violation of Section 97 of the Sheriff and Civil Process Act.
2. Whether the NDIC Act and Failed Banks Act had retroactive effect to empower the respondent with locus standi.
3. Whether the Supreme Court could uphold concurrent findings that the appellant’s husband guaranteed the loan.
4. Whether there was a valid and enforceable agreement between the parties.
5. Whether the Court of Appeal was right in awarding interest on the debt.

RATIONES DECIDENDI

FEDERAL HIGH COURT – TERRITORIAL JURISDICTION

“The territorial jurisdiction of the Federal High Court is nationwide and not limited to one State. The processes emanating from the Federal High Court apply as the processes of a single Court issued within jurisdiction.” – Per ABUBAKAR SADIQ UMAR, J.S.C.

PROOF OF BANK CUSTOMER RELATIONSHIP

“Since the Appellant’s husband did not dispute, controvert, or challenge the Respondent’s averments on the relationship between the failed bank and the company, the Court is entitled to act on and rely on same.” – Per ABUBAKAR SADIQ UMAR, J.S.C.

CONSISTENCY IN PLEADINGS

“Parties as litigants are not permitted to approbate and reprobate in the conduct of their case. A party should not be allowed to make up a different case on appeal from what he pleaded before the trial Court.” – Per ABUBAKAR SADIQ UMAR, J.S.C.

COURT’S USE OF RECORDS

“A Court is entitled to look into any document in its records and make use of it in order to arrive at a just decision.” – Per ABUBAKAR SADIQ UMAR, J.S.C.

LIABILITY OF GUARANTOR

“A Guarantor is technically a debtor because where the principal debtor fails to pay his debt, the Guarantor will be called upon to pay the money owed.” – Per ABUBAKAR SADIQ UMAR, J.S.C.

CONCURRENT FINDINGS

“This Court is usually very hesitant and wary to interfere with the concurrent findings of the two lower Courts. Where there are concurrent findings of two lower Courts, the Supreme Court will only interfere with such findings if they are perverse.” – Per ABUBAKAR SADIQ UMAR, J.S.C.

BANK’S RIGHT TO INTEREST

“It is common knowledge that bank facilities or loans do not come free, while it is part of the business of a bank to grant credit facilities to a customer, the customer is also bound to pay interest to the Bank.” – Per CHIDI NWAOMA UWA, J.S.C.

SANCTITY OF CONTRACT

“The law is trite that parties to a contract are bound by the terms of the contract, and in determining the rights and obligations under the contract, the Court must observe and respect its sanctity.” – Per CHIDI NWAOMA UWA, J.S.C.

SECTION 97 SHERIFF AND CIVIL PROCESS ACT – APPLICABILITY

“Section 97 of the Sheriff and Civil Process Act is an adjunct to Federalism. The law is to give regard to the federal system of government where the federating units are meant to be semi-autonomous territorially and in governance.” – Per STEPHEN JONAH ADAH, J.S.C.

DIRECTOR’S LIABILITY

“The Appellant used his position as Chairman of both the Commercial Trust Bank Limited and Credit and Finance Limited to ensure that loans were given to his Company from the money deposited in Commercial Trust Bank Limited by the customers.” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

UNCONTROVERTED FACTS

“It is trite that uncontroverted facts need no further proof as such uncontested facts are regarded as admissions.” – Per ABUBAKAR SADIQ UMAR, J.S.C.

INTEREST ON LOANS

“Banks not being charitable organizations have the power or are entitled to charge interests on loans or other advances or facilities granted or made available to a customer even where there was no express agreement on the rate of interest to be charged.” – Per CHIDI NWAOMA UWA, J.S.C.

FRESH ISSUES ON APPEAL

“Generally, an appeal is regarded as a continuation of the original suit and not the inception of a new action. Parties in an appeal are therefore confined to their case as presented in the Court of first instance and are not allowed to raise fresh issues on appeal.” – Per ABUBAKAR SADIQ UMAR, J.S.C.

CASES CITED

STATUTES REFERRED TO

1. Sheriff and Civil Process Act
2. Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 1994
3. Nigerian Deposit Insurance Corporation Act
4. Evidence Act 2011
5. Constitution of the Federal Republic of Nigeria, 1999 (as amended)
   

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