Can a Customer Sue Any Bank Branch Over a Frozen Account?

CASE TITLE: FBN PLC v. ABDULLAHI & ANOR (2024) LPELR-61925(CA)

JUDGMENT DATE: 14TH MARCH, 2024

JUSTICES: MISITURA OMODERE BOLAJI-YUSUFF, JCA
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, JCA
ABDUL-AZEEZ WAZIRI, JCA

DIVISION: ASABA

PRACTICE AREA: JURISDICTION

FACTS:

This case is an appeal against the judgment of the Delta State High Court in Suit No. W/268/FHR/2012, delivered on June 30, 2022.

The 1st respondent, a registered money agent operating a point-of-sale (POS) business in Effurun, Delta State, claimed that on April 22, 2021, a woman requested his employee for an account number to receive a transfer of N200,000. The employee provided account number 2014183559, held with the appellant bank. A transfer of N200,000 was made from account number 2032867358, belonging to one Obamwonyi Nosa O. The woman identified the sender, and the amount was paid to her in cash.

Later, the 1st respondent found out that the appellant bank had placed a lien on his account, and a no-debit order had been imposed by the 2nd respondent. On September 30 and October 5, 2021, a police officer, Inspector June, called and asked him to visit the police station in Benin. On October 7, 2021, he went to the appellant’s office and was informed that his account was frozen due to the N200,000 transfer. He was instructed to return the N200,000 to Obamwonyi Nosa’s account, which he did. However, by November 15, 2021, when he initiated legal proceedings, his account was still frozen, hindering his business operations and causing financial losses.

The 1st respondent filed a motion on notice to enforce his fundamental human rights. In response, the appellant filed a counter-affidavit and argued that the account was not frozen on October 7, 2021, as claimed, and that the 1st respondent operated his account until October 31, 2021. A debit restriction was later placed on the account following a court order issued on October 18, 2021, and served on October 29, 2021, by the Nigeria Police Force. The order had no time limit.

The trial Court ruled in favor of the 1st respondent. Dissatisfied with this decision, the appellant filed an appeal with the Court of Appeal.

ISSUES FOR DETERMINATION:

The appeal was determined based on the following issues thus;

1. Whether the lower Court had the jurisdiction to entertain the 1st respondent’s claim?

2. Whether the Court having refused relief 4 on the ground that the appellant was going about its lawful business when it received an order of Court to freeze the 1st respondent’s account, which they did after the verification of the order, was right to have awarded damages against the appellant and 2nd respondents jointly and severally?

COUNSEL SUBMISSIONS:

The appellant’s counsel argued that the trial Court lacked the necessary territorial jurisdiction to hear the 1st respondent’s case, as the alleged breach of fundamental rights took place in Edo State. He relied on cases such as Tukur v. Government of Gongola State [1989] 4 NWLR (Pt. 117) 517 at 546 (F–G), and Military Administrator, Benue State v. Abayilo [2001] 5 NWLR (Pt. 705) 19 at 34 (A–D), which emphasized that jurisdiction should be based on where the alleged violation occurred. Counsel claimed that only the High Court of Edo State or the Benin Judicial Division of the Federal High Court had the appropriate jurisdiction to hear the matter. Furthermore, he argued that the 1st respondent’s action, initiated by a motion on notice, was not validly commenced, as a motion on notice is not recognized as an originating process under the law. He cited Section 46(1) of the Constitution of the Federal Republic of Nigeria, 1999, and Order II Rule 2 of the Fundamental Rights (Enforcement Procedure) Rules, 2009, to support his point. He also referenced cases like CCB (Nig.) Plc v. Ozobu [1998] 3 NWLR (Pt. 541) 290 at 312 (F–H) to emphasize that defects in the initiation of a fundamental rights action are fundamental, not merely procedural irregularities. Additionally, the counsel contended that since the Court order, police directive, and its implementation all occurred in Benin City, only the High Court of Edo State had the jurisdiction to hear the case.

In response, the respondent’s counsel referred to paragraphs 3 to 14 of the affidavit in support of the application, asserting that the High Court of Delta State had territorial jurisdiction, as the breach occurred in Warri, Delta State. He argued that the 1st respondent was not aware of the order of the High Court of Edo State when initiating the action. Moreover, he contended that even if the 1st respondent had been aware of the order, both the High Courts of Edo State and Delta State would have had concurrent jurisdiction. Citing Uzoukwu v. Ezeonu II [1991] 6 NWLR (Pt. 200) 708, he argued that where the infringement of fundamental rights spans multiple states, the High Court in any of those states has the jurisdiction to entertain the complaint.

DECISION/HELD:

In the final analysis, the appeal was allowed.

RATIO:

JURISDICTION – JURISDICTION OF THE STATE HIGH COURT: Whether a State High Court has jurisdiction to try a matter that involves a bank and its customer

“By the affidavits of both parties, they are adamant that the crux of the 1st respondent’s complaint was that his account, which he was operating in Warri, was frozen without a Court order. By Section 124(1)(a) of the Evidence Act, proof shall not be required of a fact the knowledge of which is not reasonably open to question and which is common knowledge in the locality in which proceedings are being held or generally. It is common knowledge that with the advancement in technology, especially the internet, a bank account domiciled in one state can be operated in any of the bank’s branches in another state within Nigeria. In NICON INSURANCE PLC V. NASARA & ORS (2019) LPELR-47614(CA) AT 14-24 (D), this Court Per EKANEM, JCA, relying on SOKOTO STATE GOVERNMENT V. KAMDAX (NIG) LTD. (2004) 9 NWLR (Pt. 878) 345, 379, MUDIAGA-ODJE V. YOUNES POWER SYSTEM NIGERIA LTD. (2014) 5 NWLR (PT. 1400) 412, 433 AND FEDERAL REPUBLIC OF NIGERIA V FANI – KAYODE (2010) ALL FWLR (PT. 534) 181 held that if a customer can obtain payment of his money in any branch of his bank, he can also sue in the state where such a branch is situate if payment is wrongly refused. Though the order to freeze the account was made by the High Court of Edo State, the reality is that an order placing a no debit on a bank account or freezing the account of a customer effectively binds the bank in any of its branches anywhere in Nigeria. The result in my view is that a customer whose account is frozen is entitled to commence an action against the bank in any state where the bank has a branch and where he is refused access to his account. Apart from the refusal of access to his money which occurred in Warri, it was in Warri that he was made to transfer a sum of N200, 000:00 from his account to another account as a condition to defreeze his account. In my view, the alleged infringement of the appellant’s fundamental right occurred in Warri. In any case, the order of the High Court of Edo State was not the basis of the 1st respondent’s action. The existence of the order was raised as a defence to the action. The law is trite that the jurisdiction of a Court is determined by the claimant’s claim not the defence of the defendant. See JULIUS BERGER (NIG) PLC V. ANIZZEAL ENG. PROJECTS LTD (2013) LPELR-20694(CA) AT 34-35 (B-B), AKPAMGBO-OKADIGBO & ORS V. CHIDI & ORS (2) (2015) LPELR-24565(SC) AT54 (B-B), OLUGBEMI V. LAWRENCE & ORS (2017) LPELR-42361(SC) AT 34-35 (E-A). The argument of the appellant that the alleged infringement of the 1st respondent’s right occurred in Edo State is misconceived.” Per BOLAJI-YUSUFF, J.C.A.

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