Bank Of The North Limited Vs Central Bank Of Nigeria (1972)

LawGlobal-Hub Lead Judgment Report

I. LEWIS, JSC. 

In Suit No. LD/634/68 the plaintiffs’ amended particulars of claim reads:- “The plaintiff’s claim against the defendants is for £88,800 with interest thereon at 4% per annum from the 2nd day of February, 1968 to Judgment or alternatively for a declaration that the defendant is not entitled to debit the plaintiff’s account with the said sum of £88,800 which is due and owing to the plaintiff.”, and paragraphs 3 – 7 of the Statement of Claim read:-

“3. By a confidential directive to the plaintiff dated the 23rd day of December, 1967, the defendant notified the plaintiff that all currency notes issued by the defendant for the years 1959 and 1965 received by the plaintiff before the 23rd day of January, 1968 and paid into the defendant before the 30th day of January 1968 would be treated as legal tender for the purpose of crediting the plaintiff’s account with the defendant or exchange of new notes to the plaintiff by the defendant.

4. Paragraph 7 of the defendant’s said letter stated:- ‘The legal status of the 1959 and 1965 issues of notes will be withdrawn with effect from the close of banking business on the 22nd January, 1968 and deposits or exchange of the old notes will cease. However, the Central Bank will continue to accept deposits and undertake exchanges of the old notes for Banks up to the closeof business on the 29th January, 1968. These deposits and exchange will be limited to notes received by the Banks on or before the 22nd January, 1968. No deposits/exchanges of notes will be accepted from or undertaken for Banks by the Central Bank or its agents after the close of business on the 29th January, 1968.’

5. At all material times the plaintiff maintained a current banking account with the defendants and between the 23rd day of January and the 26th day of January, 1968 the plaintiff paid into its account with the defendant currency notes issued in 1959 and 1965 to the value of £88,800 in accordance with the said letter.

6. All the said currency notes had been received by the plaintiff before the close of banking business on the 22nd day of January, 1968.

7. The defendant duly credited the said plaintiff’s banking account with said payments, but on the 2nd day of February, 1968 without the plaintiff’s authority debited the plaintiff’s said account with the sum of £89,049: 5s: =d. of which £88,800 had been received by the plaintiff as aforesaid.”,

and paragraphs 11 – 14 of the Statement of Defence read:-

“11. As regards paragraph 5 of the Statement of Claim the defendant Central Bank agrees that plaintiff-bank maintained a current banking account with the defendant Central Bank and that between 23rd day of January, 1968 and the 26th day of January, 1968 the plaintiff-bank paid into its account with the defendant Central Bank currency notes issued in 1959 and 1965 to the value of £88,800, but denies that the said payments were made in accordance with the directive of the special circular letter aforementioned in paragraph 6 herein which letter contained the directive from the defendant Central Bank to banks in the Federation to make such payment or payments and on the basis of which the issuance was to be made.

12. In particular the defendant Central Bank denies that the said currency notes now in dispute between the parties were received by the plaintiff-bank after the aforementioned date and not on or before the said date.

13. The defendant Central Bank originally credited the plaintiff-bank’s account with the said payments, but says that such credit was made under a mistake of fact which mistake of fact was induced and made by the plaintiff- bank of the true and actual dates of receipt by it of the said old currency notes now in dispute between the parties. And the defendant Central Bank states further thereon that in accordance with banking practice the banker does not have or need to seek the customer’s authority before debiting the latter’s account with any money mistakenly credited in the relevant customer’s account.

14. The plaintiff-bank did not submit any return or returns in respect of the said sum of £88,800 now in dispute in the manner contained in a directive to all banks in the Federation made and issued on 23rd December, 1967 by the defendant Central Bank with respect to exchanges or deposits of £550 and over and in particular with respect to signing and completing particulars of such transactions and returning the forms each day.”

On the 10th October, 1969, Sowemimo, J., after a very full and careful review of the evidence, found that the plaintiffs had not established either of their claims and accordingly dismissed the action with 75 guineas costs to the defendants. The plaintiffs have now appealed to this court and Mr. Impey on their behalf first argued together grounds of appeal that read:-

“(1). The learned trial Judge erred in failing to consider, deal with or answer the plaintiffs contention that in any event the defendants were under the obligation to redeem all the old currency notes forming the subject matter of the plaintiffs’ claim upon demand and that by reason of Sections 21 and 23 of the Central Bank of Nigeria Act Cap. 30 the plaintiffs must be entitled to the relief claimed.

(2) The learned trial Judge erred in failing to consider the effect of the admissions by the defendant witnesses that none of the said old currency notes were lost, stolen, mutilated or imperfect.”

Mr. Impey started by referring us to Sections 21 and 23 of the Central Bank of Nigeria Act (Cap.30 of the Laws of the Federation of Nigeria & Lagos, 1958) which read:-

“21.(1) Notes issued by the Bank shall be legal tender in Nigeria at their face value for the payment of any amount.

(2) Coins issued by the bank shall, if such coins have not been tampered with, be legal tender in Nigeria at their face value up to an amount not exceeding ten pounds in the case of coins of denominations of not less than six pence and up to an amount not exceeding one shilling in the case of coins of a lower denomination.

(3) Notwithstanding the provisions of subsections (1) and (2) the Bank shall have power, on giving not less than three months notice in the Gazette, to call in any of its notes and coins on payment of the face value thereof and any such notes or coins with respect to which a notice has been given under this clause shall, on the expiration of the notice, cease to be legal tender, but, subject to the provisions of Section 23, shall be redeemed by the Bank upon demand. 23 No person shall be entitled to recover from the Bank the value of any lost, stolen, mutilated or imperfect note or coin. The circumstance in which and the conditions and limitations subject to which the value of lost, stolen, mutilated or imperfect notes or coins may be refunded as of grace shall be within the absolute discretion of the Bank.” He then submitted that reliance was never placed on Section 23 in the pleadings by the defendants and that anyway not only was it not proved that the notes which the plaintiffs paid into their account with the defendants were “stolen, mutilated or imperfect notes” but there were in fact clear admissions to the contrary. He therefore relied in particular on the provisions of Section 21 (3) that even if notice was given calling in notes so that they ceased to be legal tender, they would still be redeemable 25 by the Central Bank.

He further submitted that the position was not altered by the Central Bank (Currency Conversion) Decree 1967 (Decree No. 51 of 1967) Section 1 of which reads:-

“1. (1) Where any existing currency is altered by the Central Bank, the Commissioner for Finance shall cause to be published in the Gazette and in such other manner as he may direct or require, notice fixing a date (in this Decree hereafter referred to as “the conversion date”) after which all currency then issued and mentioned in the notice shall cease to be legal tender in Nigeria; but currency which is of the class or classes mentioned in the notice and is issued, held or in circulation in Nigeria immediately before the conversion date shall be replaced by the new currency to the equivalent value pursuant to this Decree – (a) if presented to the Central Bank by any person not more than 19 days after the conversion date, or (b) if thereafter within a further period of 14 days (but no further) the Governor of that Bank approves an application for conversion as a special case.

(2) In the application of subsection (1) any provision of the Central Bank of Nigeria Act inconsistent therewith shall be read subject to this subsection.

(3) Currency, not in accordance with the altered shape and design which is held outside Nigeria by any person shall, on and after the conversion date, be accepted for exchange with new currency under this Decree only with the approval of the Governor of the Central Bank of Nigeria given generally, or subject to such terms as he may think fit to impose, after consultation with the Commissioner for Finance.”

Moreover, Section 1 (2) according to him showed that it was only provisions inconsistent with the Central Bank of Nigeria Act that must be read subject to the Decree and, in his submission, none were here, as

Other Citation: (1972) LCN/1444(SC)