Hajia Umma Muktar Ahmed Mohammed vs Nigeria Deposit Insurance Corporation, Judgment Delivered by Uwani Musa Abba Aji, JSC, In SC/958/2015

SC/958/2015

JUDGMENT DELIVERED BY UWANI MUSA ABBA AJI, JSC

I have read in advance the judgment of my learned brother, Abubakar Sadiq Umar, JSC, just delivered. I agree with the reasoning and conclusion that the appeal lacks merit.

The Appellant was the Chairman of the Board of Directors of Commercial Trust Bank Limited, a body established under NDIC Act CAP 301 LFN 1990 and that of the First Defendant, Credit and Finance Limited, a limited liability company whose office is situated at 11B Ahmadu Bello Way, Kaduna (First Respondent/Debtor). The Credit and Finance Limited (now called the First Defendant before the trial court) maintained a current account No. 114000010 with the Commercial Trust Bank, Kaduna, and applied for a loan facility of 2.5 million Naira from the bank for the purpose of facilitating financing commodity trade business which loan was approved and granted on 21st December 1988 upon the direct intervention approval of the Appellant. A further facility of 200,000 Naira was also upon another application granted to it, making the total facility to be 2.7 million Naira, which the defendant refused to pay until the Commercial Trust Bank was closed down. In the course of managing the assets and liabilities of the Commercial Trust Bank, the Respondent discovered the indebtedness of the Appellant as at the 31st January 1990. The Respondent wrote demand letters to the Appellant demanding immediate payment of the debt but same was not settled. This led the Respondent as Plaintiff before the Lower Court to commence the action by claiming against the Defendants jointly and severally the sum of N14,795,399.91 being the balance outstanding on the overdraft facilities granted to the first Defendant, Interest and other Bank charges due from the First Defendant to the Commercial Trust Bank Ltd at closure on the 16th January 1998 and interest at the rate of 21% per annum from 17th January 1998 to judgement and final liquidation of the debt.

The first Defendant before the Lower Court did not participate in the trial but the Appellant as second defendant filed a statement of defense denying liability though did not testify at the trial. At the conclusion of the hearing, the Court gave its judgment of 2nd May, 2006, in favor of the Respondent and that the second Defendant cannot escape from liability and he is accordingly, jointly, and severally found liable to the amount claimed against them. Therefore judgment was entered against both first and second Defendants jointly and severally in terms of the reliefs set out in the statement of claim.

On appeal by the Appellant, the Lower Court entered judgment in favor of the Respondent against the first Defendant and the Appellant 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, and the 21% interest payable from 17th January 1998 till judgment and final liquidation of the debt. It is against this judgment of the lower court that the Appellant has further appealed to this Honorable Court.

There was evidence, especially on Exhibit G, that the Appellant personally and unconditionally guaranteed the loan facility, including the interest thereof. Where a borrower, that is the third party, fails to pay an outstanding debt, the guarantor or shorty becomes liable for the said debt. See Per Onnoghen, JSC, in Chami v. UBA PLC (2010) LPELR 841 (SC) (Pp. 32 PARAS. B).

Accordingly, the appeal fails and is hereby dismissed.

UWANI MUSA ABBA AJI

JUSTICE, SUPREME COURT

APPEARANCES:

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

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