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 &
Now, the legal status of NDIC in relation to a failed or failing bank is that of a statutory liquidator.
The Nigeria Deposit Insurance Corporation Act 2006 (“NDIC Act”) provides in S. 40(1) thereof that: “Whenever the licence of an insured institution is revoked by CBN, the corporation shall act as liquidator of such failed insured institution with powers conferred on a liquidator under the Companies and Allied Matters Act and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for purposes of that Act.” What this implies is that NDIC is deemed by operation of law to have been automatically appointed as “provisional liquidator” by the Federal High Court upon the revocation of the licence of an insured institution, such as the defunct Metropolitan Bank Limited.
The averments in the amended statement of claim (as contained in the records) reveal that Qualitem’s cause/right of action against the defunct bank stemmed from the pre-existing banker-customer relationship between them, which accrued long before the Bank’s licence was revoked and NDIC assumed the role of a provisional liquidator. Thus, there is no direct cause of action against NDIC whose role in the scheme of liquidation of an insured institution is not at large but falls within well-defined parameters.
It is hardly necessary to state that “[a] statutory body or corporation created by or under a statute can only act within the four walls of the statute creating it or other enabling laws. It cannot do anything at all unless authorised expressly or impliedly by the statute or instrument defining its powers. It has no power or authority to act outside the statute. If it so acts, the act will be held to be ultra vires and declared null and void and of no legal effect”: OLANIYAN v UNIVERSITY OF LAGOS [1985] 2 NWLR (PT 9) 599 at 623.
Quite unlike a natural human person for whom all acts are permissible unless specifically prohibited, the converse is the case for a statutory body such as NDIC which is an artificial person or entity: all acts are prohibited unless specifically permitted. See MAJOR GENERAL KAYODE ONI & 4 ORS v GOVERNOR OF EKITI STATE & ANOR (2019) LPELR-46413(SC) 1 at 29 –per Augie, JSC. PER AFFEN, J.C.A.
Now, the legal status of NDIC in relation to a failed or failing bank is that of a statutory liquidator.
The Nigeria Deposit Insurance Corporation Act 2006 (“NDIC Act”) provides in S. 40(1) thereof that: “Whenever the licence of an insured institution is revoked by CBN, the corporation shall act as liquidator of such failed insured institution with powers conferred on a liquidator under the Companies and Allied Matters Act and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for purposes of that Act.” What this implies is that NDIC is deemed by operation of law to have been automatically appointed as “provisional liquidator” by the Federal High Court upon the revocation of the licence of an insured institution, such as the defunct Metropolitan Bank Limited.
The averments in the amended statement of claim (as contained in the records) reveal that Qualitem’s cause/right of action against the defunct bank stemmed from the pre-existing banker-customer relationship between them, which accrued long before the Bank’s licence was revoked and NDIC assumed the role of a provisional liquidator. Thus, there is no direct cause of action against NDIC whose role in the scheme of liquidation of an insured institution is not at large but falls within well-defined parameters.
It is hardly necessary to state that “[a] statutory body or corporation created by or under a statute can only act within the four walls of the statute creating it or other enabling laws. It cannot do anything at all unless authorised expressly or impliedly by the statute or instrument defining its powers. It has no power or authority to act outside the statute. If it so acts, the act will be held to be ultra vires and declared null and void and of no legal effect”: OLANIYAN v UNIVERSITY OF LAGOS [1985] 2 NWLR (PT 9) 599 at 623.
Quite unlike a natural human person for whom all acts are permissible unless specifically prohibited, the converse is the case for a statutory body such as NDIC which is an artificial person or entity: all acts are prohibited unless specifically permitted. See MAJOR GENERAL KAYODE ONI & 4 ORS v GOVERNOR OF EKITI STATE & ANOR (2019) LPELR-46413(SC) 1 at 29 –per Augie, JSC. PER AFFEN, J.C.A.