Hajia Umma Muktar Ahmed Mohammed vs Nigeria Deposit Insurance Corporation, Judgment Delivered by Helen Moronkeji Ogunwumiju, JSC, In SC/958/2015

SC/958/2015

JUDGMENT DELIVERED BY HELEN MORONKEJI OGUNWUMIJU, JSC

 I have read the judgement of my learned brother Abubakar Sadiq Umar, JSC and I agree with the reasoning and conclusion that this appeal is devoid of merit and should be dismissed.

This is an appeal against the judgment of the Court of Appeal, Kaduna Division Coram: Abdu Aboki, Hebeeb A.O. Abiru, and Aminu A. Wambai JJCA delivered on the 10th day of June 2015, wherein the Court below allowed the appeal in part by affirming the decision of the Federal High Court in the following terms:

2. a) The decision of the lower Court entering judgment in favor of the Respondent against the first Defendant and the Appellant is affirmed to the extent that the interest payable on the principal sum of 2.7 million Naira is 18% per annum from 5th January 1989 to 16th January 1998.

1. b) The 21% interest per annum from 17th January, 1998 till judgment and final liquidation of the debt, part of the reliefs granted by the lower Court is hereby set aside.

The facts that led to this appeal are as follows:

 By an amended Statement of Claim dated 19 September 2003, the Respondent who was the Plaintiff at the trial Court instituted an action at the Federal High Court, Kaduna for the claim of the sum of N14, 795,399.71 against the Defendants ( Credit and Finance Limited, a subsidiary of Commercial Trust Bank Limited as the 1st Defendant and Alhaji Muktar Ahmed Mohammed (now deceased) as the 2nd defendant) jointly and severally on the balance outstanding on the overdraft facilities granted to the first defendant, interest and other bank charges due to Commercial Trust Bank Limited at closure on 16th January 1998 and at the interest rate of 21% per annum from 17th January 1998 till judgement and final liquidation of the debt.

The Respondent claimed that in discharging its statutory duties as the liquidator of the defunct Commercial Trust Bank Limited, it discovered that a credit facility had been granted by the failed bank to the first defendant at trial and same had remained unpaid. The Respondent proved that the credit facility granted to the first defendant at trial was approved by Commercial Trust Bank Ltd. as a result of the involvement of the involvement of Alhaji Muktar Ahmed Muhammed who was also the Chairman of same.

At the end of trial, the trial court on 2 May 2006 delivered its judgment in favor of the Respondent and granted all the reliefs sought. Dissatisfied with the judgment of the trial Court, the Appellant’s husband appealed against the decision of the trial Court and the court below on 10 June 2015 affirmed the decision of the trial Court to the extent of reviewing the interest rate on the outstanding sum from 21% per annum as awarded by the trial court to 18% per annum.

The present Appellant is the widow of the original Defendant, and she is also the administrator of his estate.

 Dissatisfied with the judgment of the Court below, the Appellant vide an amended Notice of Appeal, wherein the Appellant was substituted in place of her husband, has appealed to this Court on eight (8) grounds of appeal, seeking the following reliefs:

1. a) That the appeal be allowed.
2. b) That the judgments of the Court of Appeal Kaduna Division delivered on 10th June, 2015 in Appeal No: CA/K/36/2008 and the Federal High Court’s delivered in Kaduna on 2nd May 2006 in Suit No: FHC/KD/CS/87/2000 be set aside.
3. c) That the Respondent’s claim against the Appellant in Suit No: FHC/KD)CS/87/2000 be dismissed.

The Appellant, in a brief of argument settled by Ibrahim Gamdeh Adamu, Esq., formulated five (5) issues for determination to wit:

1. a) Whether the learned justices of the Court of Appeal were right in dismissing the Appellant’s appeal and affirming the judgment of the trial Court holding that the participation of the Appellant at the trial amounted to a waiver of violation of a statutory and mandatory requirement of Section 97 of the Sheriff and Civil Process Act ( Distilled from ground 1 of the Notice of Appeal).

b) Whether Section 40 of the Nigerian Deposit Insurance Corporation Act 1990 and the Failed Bank (Recovery of Debts) and Financial Malpractice in Banks 1994 have retroactive effect so as to empower the Respondent with the locus standi to sue and recover debts from the transactions entered into in 1988. ( Distilled from grounds 2 and 3 of the Notice of Appeal).

1. c) Whether, in the circumstance of the case, the Supreme Court can uphold the concurrent findings of the fact that the Appellant guaranteed the loan given to the first defendant and therefore liable for its repayment. When there was no guarantee pleaded and founded upon at the trial (Distilled from grounds 5 and 8 of the Notice of Appeal).
2. d) Whether the learned justices of the Court of Appeal were right in holding that there was a valid and enforceable agreement between the first defendant and the Bank in respect of the sum of 2.5 million Naira given to the first defendant when no loan agreement was founded upon at the trial and as at the time of disbursement, the first defendant was not a customer of the bank. (Distilled from ground 4 of the Notice of Appeal)
3. e) Whether the Court of Appeal was right when it awarded interest on the money given to the first defendant after the Respondent had merely stated that it claims a rate of interest of 21% without specifically pleading the rate and proving same. (Distilled from ground 7 of the Notice of Appeal).

The Respondent in its brief of argument settled by Mustapha I. Abubakar, Esq., adopted the issues formulated by the Appellant for determination, except for issue 2, which the Respondent reformulates as follows:

Ii) Whether the lower Court was right in holding that the Respondent had the locus standi to institute the Suit for the recovery of the debt in issue in this Suit and in relying on the Failed Banks (Recovery of Debts) and Financial Malpractice s in Banks Act 1994 in finding the Appellant liable for the debt claimed. ( Distilled from grounds 2 and 3 of the Notice of Appeal).

The Appellant further filed a reply.

I will determine this appeal by adopting the issues formulated by the Appellant.

My Lords, on the first issue raised and from the arguments of both Counsel, it is general knowledge that the Federal High Court has won jurisdiction and the provision of Section 97 of the Sheriff and Civil Process Act in this appeal is inapplicable. The transfer of the case from the Federal High Court of Lagos to Kaduna has cured the defect in the filing of the original Writ in Lagos division. See Biem v. SDP (2019) 12 NWLR Pt. 1687 pg. 377 where this Court per Aka’ahs JSC held as follows:

“..Thus, to hold that an originating summons which was issued out of the registry of the Federal High Court, Warri  which was addressed for service at Abuja, outside Delta State where the originating summons was issued from, should be nullified because it did not comply with Section 97 of the Sheriffs and Civil Process Act as this Court did in Izeze v. INEC (2018) 11 NWLR (pt.1629) 110 at 132 did not take cognizance of Section 19 of the Act and Order 6 rule 31. I am of the considered view that the originating summons issued by the Federal High Court, Makurdi which is to be served in Abuja cannot be considered to be service outside jurisdiction and therefore does not require to be endorsed as a concurrent writ.”

Addressing Issue 2, it is noteworthy that the Failed Banks Act came into force on 9th November 1994 while Commercial Trust Bank Ltd had the First Defendant (Credit and Finance Ltd) as its subsidiary. The Appellant herein was both the Chairman of the Bank and the Financial Institution which took the loan from the Bank without any collateral. The said loan of 2.5 million Naira was approved and disbursed for use of the First Defendant on 7th February 1989 and was to be repaid on or before 31st May 1989. Also, an additional overdraft of 200,000 Naira on 20th February 1989, in which was disbursed that day and was to be repaid on or before that 31st May 1989. However, Commercial Trust Bank Limited closed its doors on 16th January 1998 and as at that time, the Failed Banks Act was still in force. Therefore, the Appellant in raising the issue of locus standi of the Respondent for the first time needs the leave of this court to do so. Even if he does not need leave, the Suit comes under the aegis of the Failed Banks Act, which was already in existence at that time. Thus, the Respondent in this case had the locus to sue.

fIt is obvious that 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 (Credit and Finance Limited) from the money deposited in Commercial Trust Bank Limited by the customers. Also, the Appellant’s argument that he was not a technical guarantor is criminal in nature and unconscionable.

Addressing issue 4, the factual basis of the issue is wrong since both parties initially agreed that the Company took loans from the Bank and the Appellant was Chairman of both institutions at the time.

Resolving the last issue, the law is trite that parties are bound by their agreements and since the parties in this appeal had agreed on the interest rate applicable on payments made in arrears, I see no reason to disagree with the findings of the Court below.

From the facts of this appeal and the argument of both Counsel, it is clear that all the loans were personally approved by the Appellant and that his estate is obliged to pay up their standard debts. This appeal is unmeritorious.

The decision of the Court below in CA/K/36/2008 delivered on the  10/06/2015 is hereby affirmed. I abide with the order as to costs in the lead judgement.

Appeal dismissed.

HELEN MORONKEJI OGUNWUMIJU, JSC

JUSTICE, SUPREME COURT.

APPEARANCES:

Ibrahim Gamdeh Adamu Esq, with him Fatima Zara Mohammed, Esq., for the Appellant.

Mustapha I. Abubakar, Esq., with him Isa D. Haruna Esq., for the Respondent.