CORAM

IDRIS LEGBO KUTIGI, JUSTICE, COURT OF APPEAL

IDRIS LEGBO KUTIGI, JUSTICE, COURT OF APPEAL

IDRIS LEGBO KUTIGI, JUSTICE, COURT OF APPEAL

IDRIS LEGBO KUTIGI, JUSTICE, COURT OF APPEAL

PARTIES

NIGERIA DEPOSIT INSURANCE CORPORATION(LIQUIDATOR OF CENTURY MERCHANT BANK LIMITED)  APPELLANTS

 (1)    RABO FARMS LIMITED

(2)    CHIEF IME SAMPSON UMANAH

RESPONDENTS 

AREA(S) OF LAW

SUMMARY OF FACTS

The Appellant, which was later taken over by Nigerian Deposit Insurance Corporation (Liquidator of Century Merchant Bank Limited), instituted an action at the Failed Bank Tribunal against the Respondents for the recovery of debt.  The Federal High Court later assumed jurisdiction but  following the listing of the Failed Banks (Recovery of Debt and Fraud Malpractices in Banks) Decree No. 18 of 1994 in the schedule of Decree No. 62 of 1999. The 1st Respondent, who was a current account holder and a customer of the Bank, obtained an approval to export credit facilities in the sum of N15, 000, 000. 00 (Fifteen Million Naira) from the Appellant but the sum of N12, 985,339.57. 00 was disbursed, even though the Appellant claimed it was N13, 477.153.78.00 and same was granted by the 2nd Respondent vide personal guarantee/indemnity dated 28th February, 1991 with an interest rate of 21 percent per annum above the Central Bank of Nigeria/ NEXIM rate. Upon the reconciliation of the 1st Respondent’s account the license of Century Merchant Bank was revoked by the Central Bank of Nigeria. At the end of the trial, the Court dismissed the claims of the Appellant. Aggrieved with the judgment of the lower court, the Appellant have lodged the instant appeal before this Court.

HELD

Appeal Allowed

ISSUES

?    Whether an admission that the 1st Respondent was owing the sum of N44,141,786.24 or any other lower sum to Century Merchant Bank Limited as at 28th February, 1994 could be reasonably inferred from Exhibit 9?    Whether the learned trial Judge was right when he failed to find the 2nd Respondent liable to the Appellant for the sum claimed, and to enter judgment against him accordingly.?    Was the learned trial Judge correct in not treating the evidence against the 2nd Respondent differently from that against the 1st Respondent, when Exhibit 5A received in evidence by the lower Court showed a distinct and separate contract between the bank and the 2nd Respondent??    Whether, after having found that the 1st Respondent enjoyed overdraft facilities from Century Merchant Bank Limited, the learned trial Judge was nonetheless correct not to have held the Respondents liable to the Appellant for the sum claimed, when the dispute was ifot about the nature of the transaction between the parties, but the quantum of the debt.?    Whether, having regard to the testimony of the 1st Plaintiffs Witness and Exhibits 3A, 3B, 3C, 4, 7A, 8 and 9, the learned trial Judge was correct to have held that there was no evidence of Century’s minimum lending rate (MLR) or Central Bank of Nigeria’s minimum rate for Rediscounting and Refinancing Facility (RRF).?    Was the learned trial Judge right in not enforcing the rates of interest charged on the 1st Respondent’s account by Century Merchant Bank Limited after having correctly held that the 1st Respondent “did not protest those rates or express discomfort.?    Whether, after having correctly identified one of the crucial issues in dispute between the parties as what the agreed rate of interest on the facilities was, the learned trial Judge was right to have resolved that issue on the basis of the legality of the rates charged, and not on the issue formulated by him.?    Was the learned trial Judge right in holding that the Appellant failed to prove that the rates it (the bank) has charged on the 1st Respondent’s account are legally chargeable, and to have presumed that the rates are illegal without having regard to the agreement of the parties in the documentary evidence before him and/or the admission by the 1st Respondent that interest was agreed at the rate of 18% per annum.?    Whether the learned trial Judge was right to have suo motu raised the question of illegality of the rates of interest charged by Century-Merchant Bank Limited in the 1st Respondent’s account when neither the fact making up the plea of illegality nor the plea itself was raised by the 1st Respondent.?    Whether, after having found that the 1st Respondent’s Recount with the bank was overdrawn in the sum of N18,725,981,24 as 21st April, 1992, the learned trial Judge was right to have dismissed the Appellant’s claim without first satisfying himself on the evidence before him that the amount found to have been overdrawn had been paid by the Respondents.?    Whether having regard to the admission in the defence of the Respondents that interest rate on the export credit facility obtained from the bank should have been fixed at 18% per annum, the learned trial Judge was nonetheless correct not to have acted on that admission and to have cast the burden of proof of interest rate on the Appellant.?    Whether by totally ignoring and failing to pronounce upon all the crucial questions raised by counsel on behalf of the Appellant for consideration by the lower court, the learned trial Judge had not thereby denied the Appellant of its right to a fair hearing, as preserved by section 36(1) of the Constitution of the Federal Republic of Nigeria 1999.?    Did the learned trial Judge not breach the right of the Appellant to a fair hearing by raising the question of illegality of the rates of interest charged on the 1st Respondent’s account by the bank and pronouncing on the same without affording the Appellant an opportunity whatsoever to be heard on the question raised by him.

RATIONES DECIDENDI

CASES CITED

STATUTES REFERRED TO

Banking Act Cap. 28 LFN 1990Companies and Allied Matters Act, cap C20, LFN, 2004Evidence Act, 2011Failed Banks (Recovery of Debt and Fraud Malpractices in Banks) Decree No. 18 of 1994Federal High Court (Civil Procedure) Rules 2009

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