It must be noted that there was no evidence that the parties had an agreement that the cheques should not be lodged for payment. The argument that the cheques were not meant to be presented for payment is therefore quite lame. Cheques are not issued for the fun of it, more so when drawer has existing financial obligations to the drawee. The Apex Court, per Oguntade, JSC, in Abeke v State (supra) at page 13 of the E-Report, described the inferences of the issuance of a cheque in these terms:
The issuance of a cheque has certain connotations in law. A cheque issued by a drawer and accepted by the drawee serves two purposes. One is that of documenting the particular transaction. The other is that, it is a medium of payment, the issuance of which has far reaching implications in law.
Contributing to the said decision of the Supreme Court, Tobi, JSC at page 22 of the E-Report, described a cheque thus:
A cheque is a written order to a bank to pay a certain sum of money from one's bank account to oneself or to another person. It is for all intents and purposes an instrument for payment. It metamorphoses into physical cash on due presentation at the bank and that makes it legal tender."
It must be noted that there was no evidence that the parties had an agreement that the cheques should not be lodged for payment. The argument that the cheques were not meant to be presented for payment is therefore quite lame. Cheques are not issued for the fun of it, more so when drawer has existing financial obligations to the drawee. The Apex Court, per Oguntade, JSC, in Abeke v State (supra) at page 13 of the E-Report, described the inferences of the issuance of a cheque in these terms:
The issuance of a cheque has certain connotations in law. A cheque issued by a drawer and accepted by the drawee serves two purposes. One is that of documenting the particular transaction. The other is that, it is a medium of payment, the issuance of which has far reaching implications in law.
Contributing to the said decision of the Supreme Court, Tobi, JSC at page 22 of the E-Report, described a cheque thus:
A cheque is a written order to a bank to pay a certain sum of money from one's bank account to oneself or to another person. It is for all intents and purposes an instrument for payment. It metamorphoses into physical cash on due presentation at the bank and that makes it legal tender."
As rightly submitted by the Respondent, the intendment of the Dishonoured Cheques (Offences) Act is given in the long title, which introduces the Act as follows:
An act to make it an offence for any person anywhere in Nigeria to induce the delivery of any property or to purport to settle a lawful obligation by means of a cheque which when presented within a reasonable time is dishonoured on the grounds that no funds or insufficient funds were standing to the credit of the drawer of the cheque, and for matters connected therewith.
(Emphasis mine)
Elements of the offence are:
(1) the person obtained credit for himself or any other person;
(2) the cheque was presented for payment within three months from the date of issue of the cheque; and
(3) Upon presentation of the cheque it was dishonoured on the ground that no funds or insufficient funds were standing to the credit of the drawer of the cheque in the bank on which the cheque was drawn.
Section 3(1) thereof provides the procedure for trial of offences under the Act as follows:
Offences under this Act shall be triable summarily by the High Court of the State where the offence was committed and the procedure applicable in the case of summary trial of offences before such Court shall apply to the same extent for the purposes of trials for offences under this Act.
Section 1(1) of the Dishonoured Cheques (Offences) Act defines the offence in relation to dishonoured cheques as follows:
(1) Any person who
(a) obtains or induces the delivery of anything capable of being stolen either to himself or to any other person; or
(b) obtains credit for himself or any other person, by means of a cheque that, when presented for payment not later than three months after the date of the cheque, is dishonoured on the ground that no funds or insufficient funds were standing to the credit of the drawer of the cheque in the bank on which the cheque was drawn, shall be guilty of an offence
Section 1(2) further provides:
For the purposes of Subsection (1) of this section
(c) a person who to draws a cheque which is dishonoured on the ground stated in the subsection and which was issued in settlement or purported settlement of any obligation under an enforceable contract entered into between the drawer of the cheque and the person to whom the cheque was issued, notwithstanding that at the time when the contract was entered into, the manner in which the obligation would be settled was not specified.
There can be nothing farther from the truth. Accepting a cheque which is not money is no evidence that the person who issued the cheque has money in his account. It is also not true that issuing of a teller to the depositor of the cheque is evidence that the issuer of the cheque has funds for the amount on the cheques issued in his account with the bank. It is only when the cheque is cleared that is puts funds in the customers account.
ABADA NIGERIA LIMITED v. UNITY BANK OF NIGERIA PLC &
A bank is obliged to pay cheques drawn on it by its customer provided that the customer has sufficient fund to satisfy the amount payable on the cheque and there are no legal bars to payment. A customer whose cheque has been wrongfully dishonoured is entitled to claim damages against the bank. The claim may be for breach of contract and/or for libel. See Allied Bank (Nig) Ltd V. Akubueze (1997) 6 NWLR (Pt. 509) 374 and F.A.T.B Ltd V. Partnership Inv. Co. Ltd (2003) 18 NWLR (Pt. 851) 35 SC.
ABADA NIGERIA LIMITED v. UNITY BANK OF NIGERIA PLC &
A cheque is not money until it is presented and paid. Where a cheque is cleared, it puts the account of the customer in funds. See G.S. & F.C Ltd V. Obiekezie (1997) 10 NWLR (Pt. 526) 577 and Union Bank of Nigeria Ltd V. Nwoye (1996) 3 NWLR (Pt. 435) 135.
ABADA NIGERIA LIMITED v. UNITY BANK OF NIGERIA PLC &