It began as a mutual business relationship that was profitable to two party. Their business collaboration later tuned sour when the banker (Zenith Bank Plc) started to demonstrate greedy trait which negatively affected once smooth business romance.
This is the synopsis of judgement delivered by a Lagos High Court, sitting in Ikeja, presiding over by Justice Abike-Fadipe against the leading commercial bank, Zenith Bank Nigeria Plc of Nigeria.
Justice Fadipe, in a suit No: LD/ ADR/186/2014, between Real Integrated and Hospitality Limited and Zenith Bank PLC, State Universal Basic Education (SUBEB) of Gombe State rebuked the bank for denying the customer access to its monies for 12 years.
To the court, the action of the bank for denying/dishonoring the instruction of the claimant is amount to breach of contract made against it.
Entering judgment against the Zenith Bank Plc, the court held: “The 1st defendant is in the breach of contract when on 7th October, 2011 it refused the claimant to draw from its account no. 1012465427 despite the fact that the said account was in enough credit to cover the withdrawal sought to be made on the said date.
“The 1st defendant by itself , its servants, officials and privies howsoever called are hearby restrained from disturbing or refusing the claimant from operating its account no.1012465427 in the 1st defendant’s bank or from honouring the claimant’s transfer or payment obligations to third parties from the said account as long as same in credit.
“Interest of 15% per annum on the sum of N872,780,552.84 (Eight Hundred and Seventy Million Seven Hundred and Eighty Thousand Five Hundred and Fifty Two Naira and Eighty Four kobo) from 7th October, 2011, when the 1st defendant denied the claimant access to the funds in its account which was in credit at that date till judgement.,” The court ruled.
The court avered that Zenith Bank PLC benefited from with holding the claimant applicant (Real Integrated and Hospitality Limited) fund of N872,780,552.84 (Eight Hundred and Seventy Million Seven Hundred and Eighty Thousand Five Hundred and Fifty Two Naira and Eighty Four kobo) without paying any interest thereon to the claimant applicant.
The court said: “The 1st Defendant (Zenith Bank) has been the beneficiary of the malevolent game of chess that plunged both claimant (Real Integrated and Hospitality Ltd) and 2nd Defendant (Subeb) into, holding the sum of N872,780,552.84 (Eight Hundred and Seventy Million Seven Hundred and Eighty Thousand Five Hundred and Fifty Two Naira and Eighty Four kobo) in its custody without paying interest thereon from 17th February 2011 until 2nd February 2016 when the Court ordered that the money be paid into an interest yielding account in the name of the claimant and the 2nd Defendant pending determination of the suit, which order was curiously varied, so the money remained in the 1st Defendant’s custody without interest.”
Demonstrating that Zenith Bank’s action has consciously eroded goodwill of the claimant credit facility with the bank, the court further held: “The act of Zenith Bank Plc was unconscionable and detrimental to the goodwill of the claimant and its trade with its customers. It was a deliberate and malicious act against the interest of the claimant and continues to enjoy the largesse in bad faith.”
“Exhibit C4 and C5 clearly state that the funds to be transferred were to offset part of the claimant’s indebtedness for the importation of dictionaries, but the 1st defendant (Zenith Bank Plc) was impervious to this need. I therefore find and hold that the claimant is entitled to substantial damages against the 1st defendant for the injury caused to it.”
Exposing sharp practices which are against the normal banking rules, Justice Fadipe said contrary to normal standard of keeping money for customers by banks at a cost of charges and other sundry fees, the bank must also give loan facilities to customers upon request for loan facilities.
“It is usual and customary that a bank keeps money for its customer at a cost of charges and other sundry fees, and in turn gives that money to customers who require loan facilities at the premium lending rate. That is what the business off banking entails and that is how the 1st defendant makes its profit. In this instance, the 1st defendant has robbed “Peter” (the claimant) to pay “Paul” (customers that borrow from it) and has thereby made profits to which it is not entitled and which it deprived the claimant of,” the court said.
Frowning at the way the bank denied the claimant access to its lawful funds for over a decade, the court ruled: “The 1st defendant (Zenith Bank Plc) involved in trading in the money market, has denied the claimant access to its monies for nearly 12 years depriving it of the use and enjoyment of the money.
“The claimant is therefore entitled to the pre-judgement interest of 15% claimed by the claimant on the sum of N872,780,552.84 (Eight Hundred and Seventy Million Seven Hundred and Eighty Thousand Five Hundred and Fifty Two Naira and Eighty Four kobo) from 7th October 2011, not Advance Payment Guarantee (APGs) sums, but rather as a damages for unwarranted and unlawful withholding of the money claiming a lien thereon when it had transferred the APGs sum from the claimant’s account since 17th February, 2011.
“It is not correct as contended by the defendants that the claimant cannot be entitled to this interest because there was no substantive claim for it because the claimant has proved that the money was rightfully in its account for its lawful business.
On the relevance of suit no: GM/20/2016 between the 1st defendant and the Attorney General of Gombe State as plaintiff and the 1st defendant as sole defendant dated 6th June, 2006, the court held that it was not relevant to the issue at hand because the issue challenged in that case was the obligation of the first defendant against the second defendant.